Bad news for the US economy: Iran walked out of nuclear talks and China just banned exports to two American rare earth companies, squeezing both oil prices and supply chains.

• Iran left the talks after Trump made military threats over the Strait of Hormuz, and the US quickly backed down by easing oil sanctions and freeing some Iranian assets.
• US government bond yields jumped on the threats, which pushes up mortgage, credit card, and auto loan rates and squeezes everyday spending.
• China blacklisted MP Materials and USA Rare Earths, cutting them off from a wide range of Chinese parts and materials — a direct hit to US plans to build its own rare earth supply.
• China can take an oil cutoff far better than before, having shifted to nuclear, solar, and stockpiles, so Washington's main economic weapon against Beijing is weaker.
• Costs are already rising: Apple is raising iPhone prices as memory chips get far more expensive, and deeper rare earth cuts would make nearly every electronic device pricier.

Outlook: Expect China to tighten rare earth controls further and the Iran standoff to drag on, keeping pressure on US prices and bond markets.