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China Flexes Rare Earth Leverage. What That Could Mean for Trump-Xi Meet.

1. China expanded rare earth export restrictions, requiring foreign approval. 2. The restrictions resemble U.S. semiconductor export limits. 3. Analysts view China's move as a significant institutionalization of export control. 4. Tensions between U.S. and China may affect negotiations ahead of Trump-Xi meeting. 5. Potential complete lockdown on rare earth exports could cause widespread economic impacts.

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FAQ

Why Bearish?

Increased geopolitical tensions may lead to supply chain disruptions, influencing SPY negatively, similar to past tariff escalation impacts that caused market volatility.

How important is it?

Rising geopolitical tensions and restrictions on critical minerals could impact various sectors, affecting SPY’s performance given its diverse holdings.

Why Short Term?

The imminent Xi-Trump meeting increases the immediacy of potential market reactions to these developments, similar to past reactions during significant trade announcements.

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