Trump’s Impact on US Stocks

U.S. stocks experienced a day of whipsawing volatility, reminiscent of the uneven quality of the “Game of Thrones” saga. The market navigated conflicting signals, ultimately closing with a mixed performance.

Early in the session, the S&P 500 briefly dipped as much as 1.5% before paring losses. Initial optimism stemmed from comments by U.S. Trade Representative Jamieson Greer, hinting that China’s upcoming trade policies could influence the implementation of President Donald Trump’s tariffs. This suggested a potential for negotiation and de-escalation of trade tensions, a prospect welcomed by investors who have been closely monitoring the ongoing trade war’s impact on corporate earnings and global growth.

However, the market’s upward momentum stalled after President Trump floated the possibility of “terminating business with China having to do with Cooking Oil” and other retaliatory measures, citing China’s suspension of U.S. soybean purchases since May. This unexpected escalation prompted renewed investor caution, highlighting the unpredictable nature of the trade negotiations and the potential for further disruptions to supply chains and commodity markets. The S&P 500 ultimately closed down 0.2%.

Conversely, developments regarding monetary policy offered a degree of reassurance. Federal Reserve Chair Jerome Powell signaled a potential shift in the central bank’s approach to its bond holdings, suggesting a possible halt to the tightening of monetary policy. This dovish tone was interpreted by some as an indication that the Fed is sensitive to the downside risks facing the economy and is prepared to adjust its policies to support growth. Analysts at Goldman Sachs noted that a slower pace of balance sheet reduction could provide additional liquidity to the financial system, potentially boosting asset prices.

Furthermore, earnings reports from major banks, including JPMorgan Chase, Citi, and Goldman Sachs, exceeded expectations. These strong results, driven by solid performance in trading and investment banking, were viewed as a positive sign for the overall health of the financial sector and the broader economy. While macroeconomic uncertainties persist, the banks’ profitability suggests that underlying fundamentals remain relatively robust.

In the technology sector, Oracle’s move to incorporate AMD’s artificial intelligence chips into its cloud infrastructure represents a significant development. By diversifying its AI chip sourcing beyond Nvidia’s GPUs, Oracle is mitigating concentration risk and potentially gaining access to more cost-effective or specialized solutions. This strategic shift underscores the growing competition in the AI chip market and the increasing importance of AI capabilities for cloud providers. AMD stands to benefit from this partnership, further solidifying its position as a key player in the AI hardware landscape.

The market’s future trajectory hinges on several factors, including the evolution of the trade negotiations between the U.S. and China, the Federal Reserve’s monetary policy decisions, and the continued growth of the AI sector. Whether President Trump’s trade policies will undermine the current AI-supported market rally remains a key question for investors.

Trump threatens China with potential cooking oil embargo. This follows Beijing’s decision to halt purchases of U.S. soybeans since May. Whether 100% tariffs on Chinese goods are implemented depends on China’s response, according to U.S. Trade Representative Jamieson Greer.

Powell hints at a possible end to Fed tightening. The U.S. central bank may halt its reduction of bond holdings, which would maintain liquidity in the economy, Powell indicated in a recent speech.

Oracle to deploy AMD artificial intelligence chips. Oracle plans to utilize 50,000 of AMD’s Instinct MI450 chips starting in the second half of 2026, signaling a trend of companies seeking alternatives to Nvidia for their processing needs.

U.S. stocks show a mixed performance. On Tuesday, the S&P 500 and Nasdaq Composite fell but bounced back from session lows. The Dow Jones Industrial Average closed in positive territory. The pan-European Stoxx 600 index declined 0.37% and reached two-week lows during the session.

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Trump declares the war over, but Middle East peace remains tenuous.

While U.S. President Donald Trump is widely credited for his role in brokering a ceasefire between Israel and Hamas, achieving lasting peace in the region presents a much greater challenge. Analysts point out that Trump’s proposed peace plan lacks specific details, creating potential for future disagreements and instability. Key issues, such as the demilitarization of Hamas, the withdrawal of Israeli forces from Gaza, and the long-standing dispute over a two-state solution, continue to be significant obstacles to a comprehensive settlement.

The next steps in the peace process will require careful negotiation and compromise from all parties involved. The international community will also need to play a crucial role in supporting the peace process and ensuring that the terms of the agreement are implemented effectively.

— *Holly Ellyatt*