Editor
Wall Street is keeping a close eye this week, as major indices are striving for new record highs, all while a fresh wave of political and economic uncertainty looms over the market. Investors are wading through a complicated mix of trade policy changes, an important inflation report, and a crucial meeting between two world leaders, all while trying to figure out the best way forward.
On Monday, the market showed a bit of a mixed picture. The Dow Jones Industrial Average slipped a little, down 0.3%, but the S&P 500 and the tech-heavy Nasdaq Composite managed to inch into the green, rising by 0.2% and 0.3% respectively, as they set their sights on new all-time closing highs. This activity followed a strong finish last week, where the Nasdaq Composite achieved two consecutive records. Meanwhile, the S&P 500 just fell short of its own record close last Friday.
A Deal with a Catch: Nvidia, AMD, and China
The latest buzz in the tech world—and beyond—revolves around an unexpected deal for U.S. chipmakers. President Trump has just announced a new agreement with Nvidia and AMD, allowing them to keep selling a specific type of chip to China, but there’s a catch: they’ll need to fork over 15% of their sales revenue to the U.S. government.
These chips are said to be less advanced than the companies’ upcoming models. “This is an old chip that China already has,” President Trump explained, making it clear that the deal doesn’t include Nvidia’s new, more powerful Blackwell chips. The Financial Times was the first to break the news about this revenue-sharing arrangement on Sunday.
The announcement stirred things up, initially causing Nvidia and AMD shares to dip before they bounced back to close in the green. The market seems to be adopting a wait-and-see attitude towards this deal, which some view as a smart way to keep American companies competitive while still imposing a cost on trade with China.
“This is classic Trump—a non-traditional approach to trade policy,” remarked Mark Jensen, a senior analyst at Capital Market Advisors. “It’s a practical solution that recognizes the realities of global supply chains while still aiming for a protectionist goal. However, it also introduces a lot of operational uncertainty for these companies.”
Inflation, Tariffs, and a Looming Deadline
Trade policy is really taking center stage right now, and it’s creating some headwinds for the markets. The hefty tariffs on imports from a bunch of countries that kicked in last week have left investors feeling a bit jittery. Looking ahead, there are talks of possible sector-specific duties on semiconductors and pharmaceuticals, plus a looming Tuesday deadline to decide if the tariff pause with China will be extended.
This week, we’ll also get a fresh perspective on how these policies are impacting price pressures in the U.S. The Consumer Price Index (CPI) is set to be released on Tuesday, followed by the Producer Price Index (PPI) on Thursday, and then retail sales data on Friday. Inflation picked up again in June, and many economists are concerned that the new tariffs will only exacerbate the situation. The effects of rising import costs often trickle down to consumer prices weeks or even months later.
To add to the mix, gold futures took a hit after a U.S. government agency decided that certain gold bullion bars would also face tariffs, catching many in the market off guard and contributing to the overall sense of policy chaos.
The upcoming weeks are going to be crucial for Wall Street. While the market has shown resilience, it’s not completely shielded from policy disruptions. The big question now is whether the rally can keep going amid ongoing economic uncertainty. The real challenge will be maintaining this delicate balance between market optimism and political realism.
