Authored by Philip Wegmann via RealClearPolitics,

As the Trump administration slashes and burns its way through Washington, D.C., in search of waste, fraud, and abuse to eliminate, one area of the federal budget remains conspicuously off limits for cuts: The Kennedy Center for the Performing Arts.

The White House is leaning on a Republican Congress to spend big to preserve and rebuild the marquee center for the arts favored by a beltway elite. The administration has lobbied lawmakers behind the scenes for over a quarter of a billion dollars in new funding.

And Congress seems set to deliver.

When the House Transportation and Infrastructure Committee approved a budget reconciliation proposal earlier this week, including $241,750,000 for repairs to the center itself and another nearly $15 million for operating and administrative expenses, the White House was thrilled. In fact, they were directly involved. A source with direct knowledge told RealClearPolitics that the administration “collaborated with members on Capitol Hill through every step of the process.”

Republicans aren’t the typical patrons of the arts, and conservatives argue that taxpayer dollars shouldn’t prop up liberal cultural expression. The Heritage Foundation, for instance, has long recommended that the public-private opera house be cut off. According to that Trump-friendly think tank, privatizing the Kennedy Center entirely would save hundreds of millions in public funds each year.

But Trump plans on building instead. Reviving the Kennedy Center, a White House official told RCP, remains “essential” to his “vision of restoring greatness to our nation’s capital.”

This may puzzle the cultural and political elites who balked when Trump named himself chairman, fired the old board, and installed loyalists as trustees earlier this year. Protests followed. Most notably this included a troupe of 34 dancers, who silently performed The Nelken Line on the steps of the center earlier this year and who earned widespread derision on conservative corners of the internet.

The White House sees at least two problems with the Kennedy Center. First, it has become “woke.” While the center hosts a variety of programming, last year it hosted a number of drag brunches on its rooftop and booked a performance of a “Drag Salute to Divas” on the Millenium Stage. A White House called ending that kind of “anti-American propaganda” as critical “to protecting children and fostering patriotism.” Second, it has become “broke.” Visiting the facilities earlier this spring, the president bemoaned how the theater had fallen into “tremendous disrepair.”

Hence the coming overhaul of the infrastructure and changes to the programming.

“President Trump recently toured the Kennedy Center and saw first-hand how waste, fraud and abuse has robbed America’s premier arts center. The back of the house and the front of the house have been left in an embarrassing state,” said Ambassador Richard Grenell, whom Trump appointed president of the center.

The White House was looking past “partisan politics” to restore excellence in the arts, Grenell told RCP, because Trump “believes we deserve to have a national arts center that all Americans can be proud of.”

This is too much for some thespians. The hit musical Hamilton canceled its run at the Kennedy Center earlier this year in protest to changes Trump made to the board. Jeffery Seller, the producer of that show, wrote on social media that the changes fly “in the face of everything this national center represents.” The president has never cared for that musical. He prefers other Broadway shows. During his March tour of the center, Trump was overheard by reporters discussing a number of other musicals, including “Phantom of the Opera,” “Camelot,” “Fiddler on the Roof,” “Cats,” and “Hello, Dolly!”

While Washington powerbrokers can often be found on the red carpets of the theater, Trump largely avoided it during his first term. When winners of the 2017 Kennedy Center Honors threatened a boycott, the president and first lady Melania Trump bowed out “to allow the honorees to celebrate without any political distraction.” Meanwhile, many Democrats, including former House Speaker Nancy Pelosi, an ex-officio member of the board, regularly attend.

Audiences are decidedly liberal – judging, at least, from the reception that Vice President J.D. Vance and second lady Usha Vance received when they stepped into the presidential box for a National Symphony Orchestra concert in March. The crowd booed. A heckler shouted, “You ruined this place!”

Less than two months later, the administration has green-lit hundreds of millions to renovate it.

The US Treasury and the US Trade Rep office announced simultanousely, just after 6pm ET, that the US Treasury Secretary Scott Bessent and US Trade Representative Jamieson Greer will travel later this week to Switzerland to meet with a Chinese delegation led by Vice Premier He Lifeng, jump-starting negotiations between the two nations.

The travel was announced in statements Tuesday from the Chinese and US governments. It will be the first confirmed trade talks between the countries since President Donald Trump announced sweeping tariffs, led by punishing levies on China.

Secretary of the Treasury @SecScottBessent to Travel to Switzerland.

Release: https://t.co/HdFJH9AFjY

— Treasury Department (@USTreasury) May 6, 2025

“Economic security is national security, and President Donald J. Trump is leading the way both at home and abroad for a stronger, more prosperous America,” said Secretary Bessent. 

“I look forward to productive talks as we work towards rebalancing the international economic system towards better serving the interests of the United States.”

US equity futures spiked as much as 1% on the news.

The planned talks could encourage investors eager to see a reduction in tariffs that risk crippling trade between the world’s two largest economies. Trump placed duties as high as 145% on many Chinese imports, and Beijing retaliated with import taxes of 125% on American goods, escalations which rattled markets and threaten to drive up prices for manufacturing equipment as well as affordable goods that many Americans rely on, including clothing and toys.

Trump has said in recent days that he is willing to lower tariffs on China at some point, but also said this week that the US is “losing nothing” by not trading with Beijing. He claimed Chinese ships are “turning around in the Pacific Ocean.” The president has also said American consumers would be willing to accept higher prices and less selection in order to rebalance the trade relationship with China. 

Young girls don’t need “to have 30 dolls,” Trump said Sunday on NBC’s Meet the Press. “I think they can have three dolls or four dolls, because what we were doing with China was just unbelievable.”

China said on Friday it was assessing the possibility of trade talks with the US, the first sign that negotiations could begin between the two sides. 

Earlier Tuesday, Bessent said that while the US could announce trade deals with some partners as soon as this week, negotiations with China had not yet begun.

“China, we have not engaged in negotiations with as of yet,” he told lawmakers while testifying on Capitol Hill.

“You have Trump, who’s locked in on tariffs; you have the Fed, who’s locked in on not cutting rates,” said Jones, founder of macro hedge fund Tudor Investment Corp., speaking on CNBC. “That’s not good for the stock market.”

Bessent and Greer will also meet with Swiss President Karin Keller-Sutter, the Treasury Department and USTR said in a pair of statements.

Citing a need to “remove redundant force structure,” Secretary of Defense Pete Hegseth on Monday announced that he’s ordered a major reduction in the number of generals and admirals serving in the US military. Specifically, the DOD is charged with reducing active duty 4-star officers by at least 20% and National Guard generals by 20%, followed by a second round of reductions that will target another 10% of all generals and admirals — collectively called “flag officers.” Hegseth said he informally calls the policy, “Less Generals, More GI’s.” 

“Keeping with President Trump’s commitment to achieving peace through strength, we’re going to shift resources from bloated headquarters elements to our warfighters,” Hegseth said in a video posted to X. Putting the number of generals and admirals in historical perspective, he said that, in World War II, it only took 17 four- and five-star generals to lead 12 million troops. Today, America has 44 four-stars overseeing only 2.1 million service members. Overall, the ratio of generals to troops has gone from 1 to 6,000 in World War II to 1 to 1,400 today. 

“More generals and admirals does not mean more success,” said Hegseth. “This is not a slash-and-burn meant to punish high-ranking officers…this has been a deliberative process working with the joint chiefs of staff with one goal: maximizing strategic readiness and operational effectiveness.” No specific timeframe for the reductions has been announced, and it’s unclear to what extent the cuts may occur via attrition as opposed to forced retirements. Since they “serve at the pleasure of the president,” generals and admirals can be pushed out with relative ease. That’s even more true for the top brass, as retired Air Force Maj Gen Charles Dunlap explained in a 2016 essay at Lawfire:

The most senior generals — that is, the three and four star generals — only hold those grades during the period in which they occupy positions designated as being ones of “importance and responsibility.” Accordingly, if the President chooses to terminate that assignment, and the officer does not apply for voluntary retirement, then he or she will typically revert to their permanent grade, usually as a two-star major general. There are very significant financial implications to the reversion…  

Hegseth has been looking to cut some fat not only in the figurative sense, but the literal one as well. In April, he decried the American Security Project’s finding that nearly 68% of National Guard and Reserve troops are overweight or obese. “This is what happens when standards are IGNORED — and this is what we are changing. REAL fitness & weight standards are here,” he wrote on X. “We will be FIT, not FAT.” The previous month, Hegseth ordered “sex-neutral” physical fitness requirements for combat positions.  

Introducing the “Less Generals More GIs Policy.” pic.twitter.com/bQLRL2MqSC

— Secretary of Defense Pete Hegseth (@SecDef) May 5, 2025

In February, President Trump took the extraordinary step of firing the chairman of the Joint Chiefs of Staff and five more senior Pentagon officers. The next month brought the sudden ouster of the three-star general leading the Defense Health Agency, which comprises a vast medical system serving more than 9.5 million service members, retirees and family members around the world via more than 700 hospitals and clinics with a staff of more than 130,000 service members, civilian employees and contractors.  

Sadly, none of this overhauling will result in lower Pentagon spending. Far from it: Hegseth and Trump are poised to take most of the savings squeezed out by DOGE and throw it into the gaping maw of the military-industrial complex. Last month, Trump announced the Pentagon will have its first $1 trillion budget — up from $895 billion in the 2025 defense authorization bill. “Nobody’s seen anything like it. We have to build our military, and we’re very cost-conscious, but the military is something we have to build, and we have to be strong,” Trump said as he hosted Israeli prime minister and military-aid welfare-queen extraordinaire Benjamin Netanyahu. 

Via Middle East Eye

A climate scientist working as an adviser on Saudi Arabia’s Neom project has warned that the new city could change local environments and weather systems, including the path of wind and sand storms. 

The $500+ billion megacity – which organizers claim will be 33 times the size of New York City – is planned to include a 170km straight-line city, an eight-sided city that floats on water, and a ski resort with a folded vertical village, amongst other grandiose projects.

Donald Wuebbles, a researcher atmospheric physics and chemistry who advises Neom, told the Financial Times that he frequently raised concerns about how the project could impact the climate.

“Part of my concern was, what impact is The Line and those [projects] going to have on the local environment…  you start affecting the local weather and climate,” said Wuebbles. 

He added that the potential damage could include things that have “not been studied enough”, including changes to rain patterns and the amplification of wind and storms in desert areas. 

The megacity is being built in the Tabuk province of northwestern Saudi Arabia, much of which has a dry, desert climate. The Line is touted to include two mirrored buildings that are nearly 500 meters tall running along a portion of the straight-line city, according to designs uncovered in 2022.

Wuebbles said that other questions he raised included emissions from the use of cement and a slow transition away from combustion engine construction vehicles and machinery.

Neom budget cuts

Wuebbles, who is at the University of Illinois, said academics were commissioned by Neom to study his concerns, but that the findings were not shared with him. 

He said the sustainability advisory committee, which he sits on, was told during a recent meeting that the climate concerns were escalated to a “higher priority” since the abrupt departure of Nadhmi al-Nasr, the former chief of Neom. 

A second member of the advisory team, who wished to remain anonymous, affirmed to the FT the issues raised by Wuebbles. Neom said that it was a responsible development company and sustainability was one of its core priorities.

Last week, the CEO of Neom launched a “comprehensive review” of the project, in what appeared to be belt-tightening partly due to falling energy prices.

Every building needs a roof – and ours spans 2.3Km. Trojena’s Ski Village takes design to extraordinary heights. The world’s largest skiable rooftop is a marvel of engineering and breathtaking architecture to provide a glimpse into the future of adventure. pic.twitter.com/VrJG94scoA

— TROJENA (@NEOMTROJENA) May 1, 2025

One person familiar with the review told the FT that the scope of several projects surrounding Neom was being reviewed due to “an environment of limited resources”. As part of the review, the sustainability advisory committee’s future is being reconsidered, according to Wuebbles. “The whole operation has been slowed down by six to 12 months,” he said. 

The Saudi government has been accused of forcibly displacing members of the Howeitat tribe, who have lived for centuries in Tabuk province, to make way for the $500bn city. At least 47 members of the tribe were arrested or detained for resisting eviction. 

In April 2020, activist Abdul-Rahim al-Howeiti was shot dead by security forces shortly after making videos protesting against his eviction to make way for the megacity.

Last year, Middle East Eye reported that Saudi security officers were ordered to use lethal force to kill people who resisted eviction from areas earmarked for the city, according to a former Saudi intelligence officer. Senior executives leading the project have also been accused of racism, misogyny and corruption.

OpenAI, the world’s most valuable artificial intelligence company, is likely being targeted by espionage from multiple nation-states, warns Josh Steinman, a former Trump National Security Council staffer and cybersecurity company founder.

.@JoshuaSteinman: “I would be willing to bet a large amount of information that OpenAI is completely penetrated by multiple intelligence agencies—and has been for a while.” pic.twitter.com/a8JCSeijFD

— Josh Caplan (@joshdcaplan) May 6, 2025

“I would be willing to bet a large amount of information that OpenAI is completely penetrated by multiple intelligence agencies—and has been for a while,” Steinman, co-founder and CEO of Galvanick, a cybersecurity company building tools to secure industrial infrastructure and AI systems, 

said in an interview with World of DaaS with Auren Hoffman.

When asked how companies can prevent espionage, Steinman conceded it’s challenging but emphasized that rigorous and selective hiring practices are key. “You just have to be very mindful of who you’re hiring and where you are putting them in your company,” Steinman told Hoffman. “You need to be realistic about who your employees are.”

Watch the full interview:

Steinman referenced a bombshell Wall Street Journal report that alleges Chinese officials, during a secret meeting in Geneva, Switzerland in December 2024, privately acknowledged their role in the Volt Typhoon cyberattacks targeting U.S. critical infrastructure. According to the Journal, the officials’ remarks were “indirect” and “somewhat ambiguous” but sufficient to tie Volt Typhoon and the Chinese government to the relentless cyber assaults on American systems.

The campaign, believed to have started no later than 2023, has unleashed chaos, breaching major U.S. phone carriers, electric utilities, IT firms, internet providers, and government agencies. Volt Typhoon and Salt Typhoon, two Chinese groups, have been repeatedly linked to these hacks.

In July 2024, OpenAI disclosed it was the victim of a security breach in 2023 that exposed internal AI technology secrets, sparking fresh concerns of espionage by foreign adversaries, particularly China. According to the New York Times, a hacker infiltrated OpenAI’s internal messaging systems, accessing employee discussions about AI designs.

As president-elect, Trump’s transition team signaled a more aggressive stance against Chinese cyberattacks. Brian Hughes, a spokesperson for the Trump-Vance transition, told News News that the administration was “committed to imposing costs on private and nation-state actors who continue to steal our data and attack our infrastructure.”

“The Trump Administration is committed to imposing costs on private and nation state actors who continue to steal our data and attack our infrastructure,” Hughes added at the time. 

Nuclear stocks jumped mid day Tuesday after Axios reported that The White House is poised to issue executive orders aimed at accelerating the deployment of nuclear reactors across the United States.

One of our favorite names in the space, Oklo, spiked to new highs heading into the closing 30 minutes of the cash session on strong volume:

The White House actions are expected to leverage the Departments of Defense and Energy to expedite reactor deployment, potentially circumventing delays from the Nuclear Regulatory Commission (NRC).

This initiative aligns with the administration’s strategy to meet the surging energy demands driven by sectors like artificial intelligence and advanced manufacturing.

Publicly traded companies positioned to benefit from this nuclear expansion include our favorite, Oklo, formerly backed by OpenAI CEO Sam Altman.

The company is among eight companies selected to provide microreactors for U.S. military bases, aiming to supply 100% of critical energy needs at these sites.

These developments are part of a broader trend toward revitalizing the U.S. nuclear energy sector.

The ADVANCE Act of 2024, signed into law in July, aims to streamline the licensing process for advanced nuclear technologies, reduce regulatory costs, and promote the development of next-generation reactors.

Additionally, in a rare show of bipartisan agreement, the Biden administration had formerly expressed intentions to triple the nation’s nuclear power capacity by 2050, recognizing nuclear energy’s role in achieving carbon-free electricity goals.

The anticipated executive actions reflect a concerted effort to modernize the U.S. energy infrastructure, with nuclear power playing a central role in ensuring energy security and meeting future demands.

As of early 2025, 411 nuclear reactors operated worldwide with a combined 371-gigawatt capacity. Amazon, investing over $1 billion in nuclear projects, is exploring small modular reactors, while Meta and Google are also considering the emerging technology.

We’ve been following the story since late 2023. We wrote back in early November that Mark Zuckerberg reportedly told Meta workers that plans to build an AI data center powered by nuclear energy were scrapped after rare bees were discovered on the proposed site.

But by December last year it looked like things could be back on track, according to reporting from Axios, who noted first that Meta is joining industry heavyweights like Amazon and Google in exploring nuclear energy as a zero-carbon solution.

And as we have continued to report, accelerating power demand growth from AI data centers has sparked a nuclear power revival in the US:

• Amazon To Invest More Than $500 Million In Small Modular Nuclear Reactors To Power AWS

• Nuclear Names Surge After Three Mile Island Planned Restart To Power Microsoft Data Centers

• Nuclear Is Back: US Closes On $1.5 Billion Loan To Resurrect Holtec’s Palisades Nuclear Plant

• Sam Altman-Backed Nuclear Startup Oklo Signs Agreement With Dept. Of Energy For Next Phase Of Siting In Idaho

For those who missed it, in our note “The Next AI Trade” from April 2024, more than one year ago, we outlined various investment opportunities for powering up America, most of which have dramatically outperformed the market since then.

While most global car companies – even Tesla – are suspending guidance, cursing tariffs for plunging demand and barely treading water at a time when Chinese dumping of its own cars has flooded the European market with ultra cheap alternatives while Democrats in the US have sworn to never again buy anything from Elon Musk, one car company stands above all others. Shares of Italian supercar maker Ferrari rose over 1.0%, and was trading not far below its all time high, after the Italian luxury carmaker reported Ebitda for the first quarter that met analyst estimates, with Bernstein saying the company stands out against rivals after it maintained its guidance.

Another reason why Ferrari’s stock is likely to take out record highs on short notice: demand for the company’s supercars in the US remains “hot” despite price increases to offset Donald Trump’s tariffs, the CEO said as the company maintained its guidance for profit growth this year.

The Italian company is exposed to Trump’s 25% tariffs on imports of foreign-made cars since it makes all of its cars in Italy, even though the US is its largest market and is where it sells about one in four cars. But, unlike virtually every other company, the luxury-car maker also has enough brand strength to pass on the tariff costs to consumers. In other words, if you can pay $300K for a car, you will be just as likely to pay $400K.

The company on Tuesday said it had not received cancellations in its order book — which already covers the whole of 2026 — even after it announced plans in March to raise prices for some of its models by up to 10 per cent.

“Today, we don’t see any weakening of the order book,” said chief executive Benedetto Vigna. “When it comes to the tariff, specifically, I think the order book and the portfolio we have allow us to navigate with better visibility.”

According to the FT, Ferrari reported a 23% YoY increase in Q1 operating profit to €542 million while revenue increased 13% to €1.79bn. Both metrics, which beat estimates, reflected continuing demand for personalisation, with buyers adding expensive features to their supercars.

While many other carmakers have withdrawn or sharply reduced their guidance over the past week, Ferrari broadly stuck with its previous forecast for an adjusted operating profit of at least €2bn and a profit margin of at least 29%.  Ferrari cautioned that the guidance faced a potential risk of a 50bps reduction on profitability percentage margins, but considering how its peers Ford and GM have been slashing guidance, 0.5% seems like a joke by comparison.

“Ferrari stands out, reporting consensus-beating first-quarter results and confidently reiterating its fiscal 2025 guidance,” Bernstein analysts wrote, describing the outcome as “rock steady”.

The company has managed to generate higher margins even as shipments only increased 1% from a year earlier to 3,593 vehicles. The group delivered five hybrid models in the first quarter, representing 49% of total shipments.

Meanwhile, what was once the company’s fastest growing market continues to shrink as shipments to China, Hong Kong and Taiwan fell 25% during the first three months of the year as luxury car brands continue to grapple with slowing demand in China.

But China represents a relatively small market for Ferrari because the carmaker sets a cap of 10 per cent on deliveries to the country.

Vigna said on Tuesday that the company was also on track to unveil its first electric vehicle in October, with sales due to start a year later in 2026.

Via The Libertarian Institute 

The Donald Trump administration is moving forward with a Joe Biden-era plan to move a retired Patriot missile system from Israel to Ukraine. Washington will upgrade the air defense platform before transferring control to Kiev.

The New York Times reported the move on Sunday, citing four current and former US officials who confirmed that Trump planned to go through with sending a Patriot system to Kiev, despite his stated objections to continuing what he calls “Biden’s war” in Ukraine.

The plan to transfer a Patriot battery would also see Germany or Greece send a second system, giving Kiev a total of 10, though one official said two of them are currently not functioning. A Ukrainian official admitted on Friday that his forces lacked adequate air defenses.

According to the NY Times report:

A former White House official said that the Biden administration had secured the agreement with Israel in September, before the election won by Mr. Trump. The Defense Department said in a statement that “it continues to provide equipment to Ukraine from previously authorized” packages, referring to weaponry pulled from existing inventories and new purchases.

…Under U.S. export rules for sensitive defense equipment, the United States must approve any transfers of the American-made Patriot missile systems to Ukraine, even if they were coming via other countries. The systems are scarce, and their deployment is often a shell game of world hot spots, figuring out which global crisis requires them most to defend U.S. troops, bases and allies.

The Patriot system set to be transferred from Israel is an older model that will be upgraded. The US recently deployed a Patriot and multiple THAAD air defense systems to the Middle East to defend Israel.

While Ukrainian President Volodymyr Zelensky has offered to buy more air defense platforms, Kiev is still largely dependent on aid transfers from Washington.

However, last week, a natural resources deal between Washington and Kiev was signed that could give Ukraine access to funds to buy more American weapons.

Trump met Zelensky at the Vatican during Pope Francis’s funeral. The Ukrainian left the meeting feeling he had successfully swayed his American counterpart to take a harder line on Russian President Vladimir Putin. Following the meeting, Trump criticized Putin for targeting Ukrainian cities in a missile attack.

Update(1455ET): The Houthis have confirmed there will be a ceasefire in the Red Sea with the United States. The deal was mediated by Oman, and this looks like a ‘mission accomplished’ moment for Trump where he’s ready to grasp onto a way out of the quagmire the US found itself in. Wisely, he is getting the US out, and Israel appears to be stepping up in terms of its own defense.

Mideast war correspondent Elijah Magnier observes, “The US intelligently stopped the bombing on Yemen due to the lack of objectives, the empty outcome and the high cost versus no gain.” Others have noted this is essentially a declare ‘mission accomplish’ and cut and run moment, amid no better alternatives. 

The full Yemeni statement…

#Statement | A Spokesman at the Foreign Ministry has said today that following recent discussions and contacts conducted by the Sultanate of Oman with the United States and the relevant authorities in Sana’a, in the Republic of Yemen, with the aim of de-escalation, pic.twitter.com/jJZTsW8Mwe

— وزارة الخارجية (@FMofOman) May 6, 2025

Surreal, close-up images are emerging showing the sheer and utter destruction and size of the Israeli attack on Sanaa International Airport earlier in the day…

Aftermath: Footage of Sanaa Airport after Israeli airstrikes earlier today. pic.twitter.com/XewG0A89GB

— Clash Report (@clashreport) May 6, 2025

It appears Washington is now content to hand things over the Israel. The Pentagon might have better use for its two aircraft carriers off Yemen, which were essentially large sitting ducks. 

* * *

Did the White House make some kind of diplomatic breakthrough with the Houthis of Yemen? There may be behind-the-scenes, unofficial and indirect diplomatic engagement going on, but in the Red Sea there’s a full-scale war scenario. But perhaps no longer.

This week Israel joined the US coalition’s bombardment of Yemen, following a ballistic missile launch on Ben Gurion International Airport, resulting in six injuries. President Trump on Tuesday has indicated the Houthis are ready to talk and no longer want to fight the US. The Houthis within an hour of the headlines denied this, calling the president’s words “inaccurate”. Fight still on?…

HOUTHI SPOKESMAN DENIES GROUP WILL STOP ATTACKING RED SEA SHIPS

He claimed Houthis have informed his administration that they no longer want to “fight” with the United States, and they are ready to halt attacks on Red Sea shipping lanes. He said this while hosting new Canadian Prime Minister Mark Carney at the White House.

Recent weeks have witnessed an uptick in Houthi drone attacks on US warships in regional waters, including against the USS Truman carrier, which reportedly resulted in a F-18 Hornet fighter jet going overboard.

“The Houthis have announced that they are not…that they don’t want to fight anymore,” Trump said in the fresh statement.

“They just don’t want to fight. And we will honor that, and we will, we will stop the bombings, and they have capitulated, but more importantly, they we will take their word they say they will not be blowing up ships anymore,” he added.

“We just found out about that. So I think that’s very, very positive… I will accept their word, and we are going to stop the bombing of the booties, effective immediately,” he said. He claimed the Iran-backed rebels have essentially admitted defeat:

“We will stop the bombings. They have capitulated… we will take their word that they will not be blowing up ships anymore, and that’s the purpose of what we were doing,” Trump said.

The fact that the US Commander-in-Chief just said US attacks will go into effect “immediately” is quite significant – as the fight has been on for over a year. The Houthis have long vowed to keep up the attacks on Red Sea shipping so long as Israel occupies Gaza, but have given China and Russia a pass.

However, Al Jazeera has written in an update that “The Houthis have not confirmed the pause. The US has been striking the Houthis on near daily basis.”

Tuesday saw huge Israeli airstrikes destroy Yemen’s main international airport in Sanaa. Fireballs and smoke plumes rose high over the entire capital city. The raids appear to have ceased for now. 

The Israelis have had support from US military assets in the region, and the Houthis have condemned what a statement called the “US-Israeli aggression”. The Pentagon has said US forces “have hit over 1,000 targets” in Yemen since mid-March, “killing Houthi fighters and leaders, including senior Houthi missile and UAV officials, and degrading their capabilities”

Trump’s words from the Oval Office on Tuesday:

BREAKING: President Trump just announced that the United States will stop the bombings of the Houthis in Yemen, effective IMMEDIATELY, after they called and conceded defeat.

“The Houthis have announced to us at least that they don’t want to fight anymore. They just don’t want to… pic.twitter.com/J2H5QchqMC

— George (@BehizyTweets) May 6, 2025

Meanwhile, Trump also said from the Oval that he has a “very, very big announcement” ahead of his upcoming trip to the Middle East. He’s set to depart Monday for Saudi Arabia, the United Arab Emirates and Qatar.

“We’re going to have a very, very big announcement to make, like as big as it gets,” Trump said. “And I won’t tell you on what … and it’s very positive.”

“It is really, really positive. And that announcement will be made either Thursday or Friday or Monday before we leave,” Trump said. “But it’ll be one of the most important announcements that have been made in many years about a certain subject, very important subject. So you’ll all be here.” 

At the start of the week, Goldman analysts Mark Delaney, Dan Duggan, and others told clients that Tesla’s market share in China has remained stable, and the world’s second-largest economy has recently overtaken the U.S. as Tesla’s largest market. The analysts also reviewed Tesla’s rollout of Full Self-Driving (FSD) software in China, noting that the autopilot market is in an “increasingly competitive landscape.” 

Delaney highlighted that China has become Tesla’s largest auto market in recent quarters, overtaking the U.S. auto market in late 2024.  

The analysts said Tesla’s appeal in China is primarily driven by the country’s higher battery electric vehicle (BEV) penetration rates compared to other markets. 

In Western markets, Tesla’s dominance has eroded from the U.S. to Europe. In the U.S., its market share plunged from 80% in 2021 to around 45% in Q1 2025. In Europe, the story is very similar, with share slipping to low double digits. However, Tesla’s market share in China has remained relatively stable, holding around the high single-digit range (even despite a trade war).

High-frequency data from Morning Consult shows that consumer sentiment around Tesla has shifted lower in recent months, yet it has held steadily in positive territory in China. The dismal sentiment in the West has mainly been caused by unhinged liberals, their rogue NGOs, and far-left corporate media outlets waging war against Tesla CEO Elon Musk for his involvement with DOGE. In return, Musk’s involvement with DOGE has hit the brand. 

Given China’s growing importance to Tesla, the analysts emphasized that the world’s largest auto market remains a highly competitive environment for FSD, with several domestic EV makers offering comparable driver-assistance features.

Here’s more color from the analysts about FSD in China:

On 2/25/25, media outlets reported that Tesla had pushed an update to some users who had previously purchased Tesla’s FSD software (which costs ¥64,000 or ~$8,750 USD) with several FSD-like features including automatic lane change, traffic light detection, and turning capabilities. Tesla commented on its 1Q25 earnings call that it was able to launch supervised FSD in China with minimal local specific data for the China market, as the company was able to leverage the more generalized software it had already developed. That said, Tesla’s FSD software has historically worked better in the U.S. per media reports, as Tesla has had more data and time to refine the product domestically. Tesla also spoke to the benefits of local training and parameters on its 1Q25 call. Per reviews (link & link), FSD in China has performed relatively well, especially given limits to Tesla’s data collection in China. However, some reviews cite a lack of understanding of local traffic rules (e.g. Tesla vehicles going into shoulder/bike lanes on turns) and the sporadic use of wrong lanes, which we believe could be due to the more limited data for the China market.

Tesla’s FSD offering is one of several ADAS options for consumers in China, with many local competitors offering this as a standard feature even on mainstream vehicles (Exhibit 6). The level of technology and cost improvement that Tesla can achieve with FSD, both absolute and relative to competitors, will be key for its longer-term economics related to autonomy in our opinion (both globally and in China).

The analysts remain “Neutral” rated on Tesla shares with a 12-month price target of $235. 

Shares are down 40% from the $479 peak established in Decemeber 2024. 

An emerging theme this year for Tesla is that China has become its largest market in terms of deliveries. However, key questions remain about whether Tesla’s FSD offering is competitive enough to outperform driver-assistance systems from local brands. Musk’s anticipated pivot away from DOGE may also help repair Tesla’s negative brand sentiment in Western markets in the second half.