Pressure Is On

Per the summation below, last night's tariff (proposal) announcement should be viewed as symbolic in that it says that the Administration is, as promised, not willing to relent to sentiment nor the Supreme Court on tariffs.

I suspect that's pressuring global equities at the margin this morning -- while the main culprit remains the middle east conflict.

Looking a bit further out, while one can argue that tariffs are, counterintuitively for most people, disinflationary -- as they steal spending capacity from non-tariffed goods/services -- in an economy that is showing little sign of overall slowing we can surmise that, on-net, they add inflationary pressure that the consumer/voter has ever-lessening stomach for, as I type.

Yes, the pressure is on to get the Strait of Hormuz open -- especially in the coming weeks as global oil inventories reach rock bottom... A feat that has proven to be far easier said than done thus far.

Here's your morning macro rundown*:

PWA Morning Note — Wednesday, June 3, 2026

Markets opened on the defensive this morning, weighed by two distinct but reinforcing pressures on the inflation outlook. Overnight, the U.S. Trade Representative proposed tariffs of at least ten percent on roughly sixty trading partners, including China, the European Union, and the United Kingdom, citing forced-labor concerns under trade law. The proposal is notable less for its size, which sits at the lower end of the range floated over the past year, than for its legal architecture: it represents an effort to rebuild the administration's tariff framework on firmer statutory ground after earlier measures were set aside by the courts. The tariffs remain subject to a comment period before taking effect, so this is a proposal rather than an immediate change, but the direction of travel is clear.

That development lands on top of an energy market that has been climbing since the start of the week, when reports of stalled diplomacy renewed concerns about supply transiting the Strait of Hormuz. Crude has pushed higher in consecutive sessions, and the energy sector has been one of the few areas of strength against an otherwise soft tape.

What ties these two stories together is that both push in the same direction on prices. A broad import tariff is a cost-push pressure on goods; a sustained move higher in oil is a cost-push pressure on energy and everything it touches. Arriving together, with no offsetting weakness in the underlying economy, they reinforce a picture we have described for some months now — an environment where inflation proves stickier than many hope, where the path to lower interest rates is slower than markets would prefer, and where growth remains intact rather than contracting. We would caution against reading either headline as a reason for alarm. Markets have absorbed a steady cadence of trade and geopolitical news through this cycle, and proposals at the comment stage have a way of evolving before they become policy.

For portfolios, this reinforces rather than alters how we have been positioned. We have deliberately maintained exposure to real assets and to areas of the market that tend to hold their footing when price pressures persist, while keeping meaningful flexibility for the range of outcomes still ahead. We continue to favor a globally diversified posture and remain attentive to how today's trade proposal is ultimately scoped, particularly with respect to international holdings. Periods like this one tend to reward patience and a clear framework over reaction to each morning's headlines.

We will continue to monitor developments and keep you informed.

*Prepared by Marty Mazorra, Chief Investment Officer, Private Wealth Advisors. Research synthesis and drafting assisted by AI tools under advisor review.