Investors, take note: Geopolitical risk is back in the middle of a pandemic

What's happening: The United States has pulled out of talks with European countries over a new global tax framework, French finance minister Bruno Le Maire confirmed Thursday. The discussions, led by the Organization for Economic Cooperation and Development, have centered on an overhaul of the current tax system that would most directly affect top US tech firms like Alphabet and Amazon.

The breakdown means that several European countries — already dealing with the economic fallout from coronavirus — will move ahead with their own digital taxes, as they've threatened to do if there's no global deal by the end of 2020, my CNN Business colleague Hadas Gold reports. The United States has threatened retaliatory tariffs in response.

The drama puts a messy trade fight between Europe and the United States back on the table at the worst possible moment.

The OECD has warned that the global economy is facing the most severe peacetime recession in a century. The Paris-based agency expects global output to contract 6% this year before rebounding in 2021.

The prospect of fresh tariffs could add strain and disrupt markets — especially as it's not the only geopolitical risk on the horizon.

China and India are scrambling to deescalate a conflict that erupted earlier this week following a violent clash along the countries' disputed border in the Himalayas, but the relationship between the two nuclear-armed neighbors has raised the temperature in the region.

And don't forget: North Korea just blew up a joint liaison office used for talks with South Korea, the latest sign that ties between the longtime adversaries are rapidly deteriorating.

"Worth keeping an eye on escalating tensions there," Deutsche Bank strategist Jim Reid told clients Thursday, referring to the situation on the Korean border.

US-China relations are also a big question mark as leadership in both countries trade blame over how the pandemic has been handled.

On Wednesday, President Donald Trump signed a bill that aims to punish China for alleged human rights abuses against Uyghur Muslims. China has condemned the act, saying the United States had "grossly interfered in China's internal affairs."

The pandemic remains the top catalyst for stocks, which have been mixed in recent trading sessions. Investors are keeping close watch on a cluster of new cases in Beijing and record infections in a number of US states. But Covid-19 isn't the only factor in play for markets as new conflicts pop up.

How a rising stock market feeds inequality

The gap between the world's rich and poor is expected to grow due to the pandemic, and a stock market high on government and central bank cash is one culprit.

See here: Research shows that stock ownership is highly concentrated among the rich, with the wealthiest 10% of US households owning 84% of all stocks in 2016, the most recent year for which the Federal Reserve has released data.

That means the S&P 500 index's massive gains over the past 12 weeks are likely to have disproportionately benefited the haves over the have-nots, exacerbating inequality as Main Street reels from a brutal economic shock that's triggered the worst unemployment crisis since World War II.

Remember: The index dropped sharply one week ago as investors reevaluated risks to the outlook, but it's still up 39% since its low on March 23.

"A rising stock market, especially at a time of high unemployment and stagnant labor incomes, will disproportionately benefit richer households," said Eswar Prasad, an economist at Cornell University.

When stocks collapsed earlier this year, the wealthy were pummeled. Some billionaires — including Warren Buffett and Stanley Druckenmiller — have missed the rally back up, which has been driven by retail investors in sectors like travel.

Even so, the Americans that have been hurt the most by the pandemic are unlikely to benefit directly from the recent snap back. That disconnect could feed social unrest, as socioeconomic and racial divides become even more pronounced.

Brands like Uncle Ben's step away from racist imagery

First, Quaker Oats announced it was retiring the 130-year-old Aunt Jemima brand and logo.

Then Mars said it would change the "brand identity" of Uncle Ben's rice, and Conagra, which makes Mrs. Butterworth's syrup, said it would conduct a complete brand and packaging review.

The moves are an acknowledgment of the brands' origins in racist stereotypes, a consideration brought to the forefront during a corporate reckoning on race and discrimination following the death of George Floyd in police custody, my CNN Business colleague Jordan Valinsky reports.

A global push: Two major UK companies have acknowledged their historic ties to the slave trade.

Lloyd's of London, the world's oldest insurance market, and pub chain Greene King said they would take steps to make their businesses more racially inclusive and provide financial support to black and minority ethnic groups.

"Lloyd's has a long and rich history dating back over 330 years, but there are some aspects of our history that we are not proud of," the company, which insured slave ships, said in a statement.

Up next

The Bank of England just announced it will expand its bond-buying program by £100 billion ($125 billion).

Also today: Americans are expected to have filed another 1.3 million initial unemployment claims last week. That would be the 11th straight week of declines.

Coming tomorrow: European leaders meet by video conference as debate continues over the bloc's coronavirus recovery plan.