It’s no surprise Costco keeps selling out of gold bars (and pet hoodies, but that’s a different story). The price of gold hit another record yesterday, breaking $3,500 an ounce before pulling back, and JPMorgan predicted the precious metal’s value could climb past $4,000 in the next year. The asset has risen more than 25% already this year.

At the same time, bitcoin recaptured the $90,000 mark yesterday, at its peak sitting 22% above its April low. Bitcoin ETFs added $381 million on Monday, their biggest single-day jump since January and their fifth straight day of gains.

The dual rally of gold and bitcoin backs up the idea that some investors treat bitcoin as digital gold, buying up the crypto with the belief that it’ll maintain its value through tough times.

Padding the Digital Wallet

While bitcoin and gold have both risen this month, the S&P 500 has lost 9% and the US Dollar Index has declined 5%, as of yesterday’s market close, as investors rearrange their portfolios to protect their net worth from increasingly uncomfortable times.

• The market is being driven by extreme fear, according to CNN’s Fear and Greed Index, as POTUS wages a global trade war. Adding to the uncertainty, the White House is said to be looking into how to fire Fed Chair Jerome Powell, a move critics say could spark an epic selloff.
• Meanwhile, the US dollar, which typically gets a boost in uncertain times as investors opt for the liquidity of cash, is instead experiencing a dramatic decline. Since the beginning of the year, the US Dollar Index has tumbled 9%, the worst decline for the period in the index’s four-decade history.

So instead of stashing cash under the mattress, investors seem to be looking to gold and bitcoin to shore up their portfolios. While gold has historically been considered a safe-haven asset, bitcoin’s classification as one is hotly debated, and earlier this month, bitcoin was tracking closer to tech stocks than to gold.

The dollar’s decline could be a key factor in bitcoin’s uptick. In his annual letter to shareholders earlier this month, BlackRock CEO Larry Fink pointed out that a weakening dollar might prompt investors to flock to the cryptocurrency.

On a Breakaway: Bitcoin’s not just showing early signs of decoupling from tech stocks but also from other cryptocurrencies, Bloomberg’s Joe Weisenthal pointed out. That would set bitcoin apart from the rest of crypto as an asset that’s perceived to be less risky. But while bitcoin and gold may be besties for now, a wide range of factors affect bitcoin’s value and analysts expect its continued rise to depend on major catalysts like trade deals and interest-rate adjustments.

War is usually a good thing for defense contractors. Trade wars not so much.

As three industry titans — Lockheed Martin, RTX, and Northrop Grumman — held earnings calls on Tuesday, one overarching theme became clear: The fresh crop of tariffs is probably going to be bad for their business. In other words: The defense industry is stuck playing defense.

On the Radar

It’s been a wild year for arms makers. A US foreign policy U-turn on the Russia-Ukraine war has had the industry in retreat, while Defense Secretary Pete Hegseth has announced plans to cut $580 million in “wasteful spending” at the Pentagon. (European defense players, on the other hand, are having a banner year; ditto US competitor SpaceX, which seems to have become a favored US government contractor.)

Still, not every industry player is feeling the heat equally. Lockheed Martin posted net earnings of $1.7 billion on revenue of $18 billion, both of which bested Wall Street’s expectations. Crucially, the company noted a backlog worth $173 billion — a cushion equivalent to more than two years of sales.

The company also affirmed its outlook for the year… though noted its forecast did not include “the evolving impacts of tariffs or related recoveries.” That was enough to spare it from market pain; its share price rose around 0.9% on Tuesday. Northrop and RTX, on the other hand, were under siege:

• RTX was much more blunt, providing a full breakdown of the impact it expects tariffs to have on its operating profit this year. The company expects a $250 million hit from levies on Canadian and Mexican imports, another $250 million hit due to tariffs on and from China, a $300 million hit from other global reciprocal tariffs, and a $50 million hit from tariffs on steel and aluminum alone.
• The company’s share price plummeted over 9%. That was more than matched by Northrop’s decline of over 12% after the company reported a roughly 47% year-over-year decline in quarterly profits, blamed in large part on the rising costs to manufacture its B-21 Raider stealth bomber.

Escape Velocity: In more big news for the defense and aerospace sector on Tuesday, Boeing announced that it would sell parts of its Digital Aviation Solutions business — which makes navigation software and other digital tools — to private equity firm Thoma Bravo in an all-cash deal worth $10.5 billion. Shares popped some 2% on the news, though analysts see the deal as a bit of a mixed bag. On the one hand, Boeing — which reported an $11.8 billion net loss last year — could use some spare cash. On the other hand, the software unit turned a steady profit. Suffice to say: The beleaguered aerospace giant could still use some reliable wind beneath its wings.

After ripping up trade norms, why not rip up some price tags?

A week after President Trump signed an executive order calling for lower drug prices, his administration is exploring the idea of linking the cost of US treatments to cheaper prices in other developed countries, two industry sources who were informed of the government’s plans told Reuters. It’s part of a host of ideas being considered by the administration that could send drug prices up or down.

Pricing Peril

The fact that Americans pay more for drug prescriptions and treatments than residents of other developed countries is no secret: Prescription drugs cost 2.8 times more in the US than in 33 other nations, a report by RAND Health Care found last year. Brand-name drugs were even pricier, costing 4.2 times more.

Trump has said he wants to remedy the situation but has yet to lay out full plans publicly. The different options his administration has teased, in the meantime, could help or hurt both consumers and Big Pharma.

For example, the Commerce Department launched a national security probe on the risks of importing drugs and pharmaceutical ingredients last week, which could set the stage for tariffs. Tariffs would raise the price of drugs for consumers: As ING analysts note, generic drugs accounted for 91% of US prescriptions in 2022 and roughly 70% of the active pharmaceutical ingredients for generic drugs originate in China. The bank also noted that generics are made at half the margins of brand-name drugs, meaning they will struggle to absorb tariff costs. Then there’s a change to Medicare drug price negotiation rules that Trump directed the Department of Health and Human Services to pursue with Congress:

• Currently, biologics such as vaccines are exempt from price negotiation for 13 years following regulatory approval, compared with only nine years for small-molecule drugs delivered in pill or tablet form. Drugmakers call this the “pill penalty” because it discourages them from developing small-molecule drugs, even though they’re cheaper and more widely used.
• Trump’s executive order last week called for an end to the “pill penalty” — health policy researchers at KFF said if the negotiation exemption for small-molecule drugs was broadened to 13 years, it “would come at a cost to Medicare and beneficiaries by giving drug companies four additional years of setting their own prices.”

Consumer Savings or “Existential Threat”: It isn’t clear how the cost of US drugs would be linked to foreign prices, but it is clear that the US pharma industry is sweating bullets about what all this would do to its bottom line. One of the industry sources who spoke to Reuters called linking US drug prices to those abroad an “existential threat to the industry and US biosciences innovation.”