With Billions at Risk, Nvidia CEO Buys His Way Out of the Trade Battle
Huang told President Trump that restrictions on U.S. chip sales to China would backfire by pushing Chinese technology champions to achieve self-reliance. He advised the president to keep China hooked on American tech. As a sweetener, Huang said the company would invest as much $500 billion in the U.S.
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NBC News
a few seconds ago
- NBC News
Trump's tariffs keep coming. Stock markets don't seem to care.
At least for now, the U.S. stock market is on board with President Donald Trump's increasingly aggressive use of executive power. On Tuesday, major stock indexes hit fresh all-time highs as investors digested an inflation report that was mostly tamer than feared. While the details of the report suggest an overall mixed picture for the economy, it suggested fears of large immediate price increases from Trump's tariffs may no longer be warranted. 'Many prices will end up rising in time due to tariffs, but we don't see inflation pressures persisting,' James Knightley, chief international economist at ING, said in a note to clients. 'We are in a very different situation to 2021/22 when inflation soared to 9%.' While the rate of inflation for some goods exposed to tariffs picked up in July, it was weaker for others, like appliances and apparel. Last month's heavier price increases were instead mainly found in service sectors like airfare and auto insurance rates. 'The strength was concentrated to a few specific components and not broad based,' analysts with Citi said in a note. Tariffs are costs added to imports in the form of taxes. Goldman Sachs analysts have estimated that consumers have been responsible for as much as 22% of the cost increases, with the percentage set to climb as the tariffs work their way more fully into supply chains — though Trump attacked Goldman's estimates Tuesday. Efforts by firms to stockpile goods ahead of the tariffs' impacts, as well as summer discounts and ongoing tariff deadline extensions by Trump, have insulated consumers from further effects. Tariffs continue to get negative reaction in surveys, with a mid-July Fox News poll showing Americans disapproved of Trump on tariffs by a 26-point margin. That was virtually unchanged from April, when Trump revealed shock new tariff levels in his Rose Garden 'Liberation Day' speech announcing soaring new import duty levels. Stocks, meanwhile, continue to shrug them off. After Tuesday's inflation report, traders increased the odds of a rate cut by the Federal Reserve at its next meeting in September. When markets expect the Federal Reserve to loosen financial conditions and make it easier for businesses to borrow money, stocks tend to rise because firms will have to pay less money in interest. Stocks' recent behavior is in stark contrast to their dramatic spring sell-off in the wake of April's 'Liberation Day' speech. Investor reaction was so intense that Trump instituted a 90-day pause to reconsider what was set to be a cornerstone of his second administration's economic policy. Today, Trump's focus on tariffs hasn't abated — but he has dialed back the more maximalist tariff levels he initially outlined. Combined with signs of a shakier labor market, investors are more convinced that the Fed will err on the side of supporting the economy by lowering interest rates to support overall business activity. The performance of the stock market itself isn't a full picture of the broader economy, however. Instead, the gains of the S&P 500 and the Nasdaq increasingly reflect the outsized returns of a handful of tech companies that investors believe will reap massive gains from their investments in artificial intelligence technology. The so-called Magnificent Seven tech stocks — Alphabet (Google's parent), Amazon, Apple, Meta, Microsoft, Nvidia and Tesla — now account for one-third of the weighted average of the S&P 500, the broadest index of stocks Reuters reported last month, citing data from LSEG Datastream consultancy. According to analysis from Morgan Stanley, at the end of July, just 9% of companies that make up the S&P 500 were at 52-week highs. The index's movements are thus now heavily correlated with changes to the outlook of a handful of companies. If just one of them underperforms, it can take the entire market down with it. 'When a handful of stocks dominate the market ... if you do have a period of disappointment from those stocks, you could see disproportionate impacts on your portfolio from just a handful of company-specific issues,' Michael Reynolds, vice president of investment strategy at Glenmede financial group, told Reuters. Small businesses remain especially vulnerable to the impact of tariffs, since they have less pricing power than larger firms. The National Federation of Independent Businesses, the country's largest small-business trade group, reported Tuesday that a shrinking share of respondents say they are profitable. 'Increased costs are affecting everyone. I believe things will improve, but it will take time — six to 12 months. I just hope small businesses can hold on that long,' the NFIB quoted an unnamed fabricated metal product manufacturing firm in Michigan as saying in a July report. The U.S. economy isn't out of the woods yet, said Kevin Gordon, director and senior investment strategist at Charles Schwab financial group. Wednesday, the Bureau of Labor Statistics will report a separate measure of inflation that tracks wholesale inflation, or what producers get for their products and which tends to be more closely watched by the Federal Reserve. If it shows more pronounced signs of inflation than what Tuesday's report suggested, stocks could quickly come down from their new highs. Barring that, conditions remain more benign than feared, he said, potentially setting the stage for further stock gains. 'Weaker growth is not a concern at the moment,' he said. 'Yes, there's been some pullback, but it doesn't mean we're in any kind of recessionary scenario.'
CBS News
a few seconds ago
- CBS News
Billy Joel closing Long Island motorcycle shop 20th Century Cycles
Billy Joel will be closing 20th Century Cycles, his popular motorcycle shop on Long Island. For the past 15 years, the Oyster Bay shop has showcased the singer's private collection of expensive and rare motorcycles, which he spent decades gathering. Shortly after its grand opening, Joel shared a video about why he wanted to give the community an inside look. "People don't get to see all these kinds of bikes all together in one place," he said. "I actually grew up not far from here, and I'd like to get a little interest going into the town." The closure comes as Joel, 76, is in the middle of selling his Oyster Bay estate and relocating to Florida after being diagnosed with a brain condition. Locals are disappointed the shop is closing down. "It's always cool to sometimes see him coming in or out," Oyster Bay resident Alice Balducci said. "This is one of the prime things to do in Oyster Bay, is to see the motorcycles," resident Stephen Sprachman said. Maalika Mehta remembers meeting Joel at the shop back in 2018 when she was 8 or 9 years old. "He was such a sweet person to talk to," she said. In 2023, a part of the road the shop sits on was named Billy Joel Way. Town Supervisor Joseph Saladino says that won't change even after the shop closes. "While we may be losing this motorcycle museum, we're not losing our love," he said. The shop will remain open on weekends only through the end of August as motorcycle parts are sold off. There's no word yet on when the store will be closing its doors for good, or what will be replacing it.
Bloomberg
a few seconds ago
- Bloomberg
Chinese Thermal Coal Hits 5-Month High on Heat and Disruptions
Power plant coal prices in China have risen to the highest level since March, as downpours in mining areas disrupt output and scorching heat in cities boosts cooling demand for the fuel. Spot prices in Qinhuangdao, the country's benchmark, rose to 678 yuan ($94) a ton this week, the highest since March 17, according to China Coal Resource. Prices are up 11% since their four-year trough in June, which was hit after record output in the first half of the year lifted inventories, and the expanded use of renewables caused generators to burn less coal.
