TL;DR

Trump pressures Fed for rate cuts, threatens broad tariffs; Tesla warns post-EV credit; U.S. chip, lithium, and bank stocks in focus.

Highlights

• Trump to visit the Federal Reserve today, increasing pressure on Chair Powell for rate cuts; 10-year Treasury yields steady at 4.39%, dollar slightly weaker 1.
• Trump threatens 15–50% tariffs on countries without U.S. trade deals by Aug. 1; only a few nations, including Japan and the UK, have agreements 2.
• U.S.–South Korea trade talks delayed as Seoul seeks to avoid 25% tariffs; South Korea considers $100B U.S. investment and shipbuilding partnership to secure tariff relief 718.
• Nvidia AI chips worth $1B reached China via intermediaries despite U.S. export restrictions, raising enforcement concerns 3.
• Tesla warns of “rough quarters” as U.S. EV tax credit ends; Q2 revenue down 12% y/y, stock down 7% pre-market 4.
• China’s lithium futures hit 5-month highs on supply rumors; U.S. lithium stocks rally pre-market 5.
• U.S. Philly Fed manufacturing index jumps to 15.9, signaling a rebound; Empire State index also surprised to upside 13.
• Eurozone flash PMI rises to 51.0, highest in 11 months; ECB expected to hold rates, signals possible cut in September 11.
• European banks (Deutsche Bank , BNP Paribas, Sabadell) report strong Q2 earnings, lifting sector shares 8.
• SK Hynix posts record Q2 sales; Hyundai warns of intensifying U.S. tariff impact despite strong U.S. sales 14.
• Novartis beats Q2, raises outlook, announces $10B buyback; TotalEnergies profit down 23% y/y but maintains $2B quarterly buybacks 109.
• China-EU summit ends without trade breakthrough; joint climate statement signed as trade tensions persist 616.

Commentary

Markets open with a focus on U.S. policy risk as President Trump’s visit to the Fed highlights ongoing political pressure for rate cuts 1. While the visit is officially for a facility inspection, recent public criticism of Powell and threats to replace him underscore the risk of further politicization of monetary policy 1. Treasury yields and the dollar are little changed, but traders will be alert for any signals ahead of next week’s FOMC meeting 1.

Trade tensions remain elevated. Trump’s proposed 15–50% tariffs on countries lacking U.S. trade deals by August 1 put major exporters at risk, especially as talks with South Korea are delayed 27. Seoul is weighing a $100B U.S. investment and shipbuilding partnership to avoid a 25% tariff, but uncertainty remains 18. Hyundai’s Q2 results already show a $602M hit from tariffs, and the company expects further pressure in the second half 14. Meanwhile, Nvidia ’s $1B in AI chip shipments to China, despite export controls, could prompt tighter enforcement and scrutiny on U.S. suppliers 3.

In sector news, Tesla ’s warning of “rough quarters” following the loss of the U.S. EV tax credit and declining Q2 revenue is weighing on the stock and the broader EV sector 4. However, U.S. lithium producers are rallying as Chinese lithium futures surge on supply concerns 5. Strong Q2 results from European banks are supporting global financials, while Novartis ’ buyback and raised outlook provide a boost to healthcare 10. TotalEnergies ’ profit decline reflects weaker energy prices, but buybacks remain intact 9.

Macro data is mixed but supportive for risk: U.S. manufacturing sentiment is improving, with the Philly Fed index at a five-month high and the Empire State index also positive 13. Eurozone PMIs show services-led recovery, though manufacturing remains weak 11. The ECB is expected to hold rates but may signal a cut in September 11. The China-EU summit produced no progress on trade, but a joint climate statement highlights shifting global alliances as the U.S. steps back from climate leadership 616.