Brent jumps toward $97 as Trump edits the Iran deal, factories accelerate, tariffs come off farm gear, UAW shuts a GM truck plant — and dishes still cost 15 percent more

By Perplexity

Five stories Tuesday morning underscore that the consumer economy is still being whipsawed by Washington and the Strait of Hormuz. President Donald Trump returned a third round of edits to the U.S.-Iran memorandum of understanding, pushing oil up sharply Monday — Brent closed at $94.98 in one read and traded near $97 in another — and keeping the war premium intact even as roughly 70 commercial ships finally squeezed through the strait in the past three weeks.

The Institute for Supply Management's manufacturing index hit 54, the highest reading since May 2022, a sign the factory sector is reaccelerating even as households retrench.

Trump signed a proclamation late Monday cutting tariffs on combines, harvesters and a slate of heavy industrial gear to 15 percent from 25 percent, the first sustained walk-back of the 2025 reciprocal tariffs.

Almost 1,000 UAW workers struck an American Axle plant in Three Rivers, Michigan, halting production of essential parts for the Chevy Silverado and GMC Sierra.

And a Bloomberg Opinion column built off April CPI data put a sharp number on what the tariff regime is still costing the household budget: dishes up 15.4 percent, jewelry up 16.1 percent, PC accessories up 13.9 percent and men's shirts up 7.7 percent from a year earlier.

Trump's third round of edits sends oil sharply higher

Trump made a third round of edits to the U.S.-Iran memorandum of understanding on Friday and returned it to Tehran via Pakistani mediators, CBS News reported. The changes were "somewhat significant" and dealt with "the Strait of Hormuz and the removal of highly enriched uranium," according to CBS News. The broad framework calls for "a 60-day cessation of violence" with clauses to reopen the strait and a framework for nuclear talks, and the deal could ultimately include "waivers or sanctions relief to Iran that could allow it to access billions in frozen assets depending on the progress of the diplomacy," CBS News reported.

Trump's tone Monday alternated between confident and combative. He said talks "are continuing, at a rapid pace," predicted "all shooting will stop" between Israel and Hezbollah, and said the administration plans to "just go silent. We'll keep the blockade. Blockade is a piece of steel," CBS News reported. On Friday Trump had said Iran "really wants to make a deal," and told a Lara Trump interview he was "in 'no hurry' to make a deal."

Markets did move. Brent crude jumped 4.2 percent to settle at $94.98 in one report and was described as climbing "almost 7 percent to $97.47" in another, CBS News reported, well above the roughly $70 level that prevailed before the war. Brent eased early Tuesday to about $94.70 a barrel, while U.S. benchmark crude slipped 39 cents to $91.77 in early Asian trade, according to The Associated Press. United Airlines fell 2.6 percent, Alaska Air 3.3 percent and Carnival 2.7 percent on the energy spike, CBS News reported.

The strait itself is once again moving cargo, slowly. About 70 commercial ships transited the Strait of Hormuz over the past three weeks with help from U.S. Central Command, an official told CBS News, with CENTCOM guiding vessels onto a U.S. Navy-cleared lane farther from the Iranian coast. Iran, meanwhile, said 15 vessels — four of them oil tankers — had transited "under its supervision" in the past 24 hours and warned that ships moving through in "cooperation with hostile extra-regional forces" would be treated as "an imminent security threat," CBS News reported.

Factory pulse quickens: ISM hits a four-year high

U.S. manufacturing activity expanded for a fifth straight month in May, and the Institute for Supply Management's purchasing managers' index climbed to 54, its highest reading since May 2022, according to The Wall Street Journal. Readings above 50 signal sector expansion, and the May print topped the 53.2 forecast by economists polled by The Wall Street Journal.

For households, a hotter factory survey is mixed news. Production momentum supports continued hiring and overtime in industrial-heavy states, but it also reinforces the case that the Federal Reserve will hold rates higher for longer. Bond markets, already leaning toward removing the central bank's easing bias at the June 17 and 18 meeting under Chairman Kevin Warsh, will read the print as one more reason to do so. JOLTS job openings data for April are due Tuesday, the next datapoint feeding into Friday's payrolls report and the new Fed framework debate over whether to anchor on trimmed mean inflation rather than the hotter core PCE figure.

Trump trims tariffs — on combines and heavy industrial gear

In the first sustained pullback on the 2025 reciprocal tariff regime, Trump signed a proclamation late Monday cutting U.S. tariffs on agricultural equipment such as combines and harvesters to 15 percent from 25 percent, according to Bloomberg. Foreign producers can qualify for an even lower 10 percent duty if their capital equipment contains "at least 85 percent US steel or aluminum," according to a White House fact sheet cited by Bloomberg.

The list extends beyond agriculture. According to The Wall Street Journal, the president lowered duties on heating and cooling apparatus, bulldozers, forklifts and various types of mobile industrial machinery, in addition to agricultural tools, all dropping to 15 percent from a steel-, aluminum- and copper-driven 25 percent. The administration cast the move as relief for farmers and capital-intensive manufacturers facing surging input costs.

The signal matters as much as the savings. The administration has spent more than a year defending the broad tariff structure on national-security and reshoring grounds. The willingness to carve out exceptions for politically vulnerable rural and industrial constituencies hints at the political ceiling on broad consumer tariffs, especially with midterms five months out.

UAW walks out at a critical GM truck-parts plant

Almost 1,000 employees at American Axle & Manufacturing's plant in Three Rivers, Michigan, walked off the job, halting production of essential components for General Motors' midsize and full-size pickup trucks, according to The Wall Street Journal. Workers, the Journal reported, "assert that their wages have not rebounded since 2008," when they accepted "a 50 percent pay cut to maintain operations during challenging economic conditions." American Axle has reported "significant profits in recent years, largely attributed to robust sales of GM trucks," the Journal reported.

The consumer angle is fast-moving. Chevy Silverado and GMC Sierra are GM's two highest-volume nameplates and among the most profitable pickup lines in the industry. Even a short stoppage at a single-source axle plant can throttle Silverado and Sierra deliveries within days, lifting dealer transaction prices and squeezing trade-in offers for buyers still digesting elevated auto-loan rates. With used-car prices already softening, a supply hit on the biggest-selling pickups in America has the potential to reshape the second-quarter auto pricing curve.

Tariffs still costing consumers — by the category

The April CPI laid out a granular tariff bill for households. A Bloomberg Opinion column walked through the data: dishes were 15.4 percent more expensive in April than a year earlier, men's shirts were up 7.7 percent, jewelry up 16.1 percent and personal-computer accessories up 13.9 percent, all categories with high import exposure. Those are not statistical noise. A typical "stock the kitchen" run that cost $200 a year ago now lists at roughly $231 before applying any cashback or warehouse-club discount.

Monday's tariff carve-outs do not move that needle for households. Combines and forklifts are not in the consumer cart. The clearest read on whether the administration extends relief to apparel, electronics or housewares will come from the May CPI on June 11 and from the next batch of executive actions, which the White House has not yet detailed. In the meantime, retailers are reverting to the playbook of the past 12 months: targeted price cuts on bellwether items (Clorox, Kraft Heinz), expanded value packs, and quietly pulling back tariff surcharges in categories where elasticity is highest, including beauty, where e.l.f. Beauty's chief executive said last week the company would dial back some tariff-driven increases because "the consumer is suffering."

The bigger picture

Tuesday's themes describe a consumer economy with two engines pulling in different directions. Manufacturing is reaccelerating, but the strength gives the Fed political and analytical cover to keep rates higher. The Iran negotiations are inching closer to a paper deal but the path runs through Trump's editing pen and the strait still moves the pump price by the hour. The administration is willing to walk back tariffs for politically important constituencies but has not yet relieved the household categories doing the most damage to the consumer price index. A targeted UAW strike at a critical supplier plant threatens to lift truck transaction prices just as households are stretching credit-card balances to record levels. And the catalog of tariff-driven price increases — 16.1 percent on jewelry, 15.4 percent on dishes — is a reminder that the cost of the trade strategy is still being paid one shopping cart at a time.

For consumers, the practical playbook for the week is concrete: avoid big-ticket truck purchases until the American Axle situation is resolved, time apparel and housewares restocks against expected tariff carve-outs rather than current sticker prices, and watch JOLTS today and Friday's payrolls report as the next read on Fed direction. For policymakers, the data converges on the same uncomfortable conclusion: factories are stronger, households are weaker, and the foreign-policy backdrop can wipe out a month of good news in a single Truth Social post.