TL;DR

US-South Korea trade deal cuts tariffs; Ford warns on earnings; Nvidia faces China probe over H20 chips.

Highlights

• China’s cyber regulator summoned Nvidia Corp over alleged backdoors in H20 AI chips, raising risks for its China business as a major H20 order is underway 1.
• U.S. and South Korea finalized a trade deal: 15% tariff on Korean goods (down from 25%), $350B in Korean investment in U.S.-selected sectors, and $100B in U.S. energy purchases 2.
• Trump imposed a 25% tariff on Indian goods, with threats of further penalties tied to India’s trade with Russia 3.
• U.S.-Mexico trade talks are at a critical point ahead of a possible 30% U.S. tariff on Mexican imports; Trump and President Sheinbaum to hold a last-minute call 4.
• Ford cut its 2025 earnings forecast, citing a $2B hit from Trump tariffs and an 86% profit drop; shares fell 3% 5.
• China’s July factory PMI fell to 49.3, marking a fourth month of contraction and ongoing weak export demand 8.
• The Bank of Japan held rates at 0.5% and raised its inflation outlook, sending the yen higher and lifting JGB yields 9.
• Eli Lilly ’s Mounjaro cut deaths 16% vs. Trulicity in a heart trial, but shares fell 4.9% 11; AbbVie , Biogen , and Bristol Myers all beat estimates and raised guidance 1314.
• Moderna will cut 10% of its workforce amid declining Covid vaccine sales 12.
• Microsoft and Meta received analyst price-target hikes after strong earnings driven by AI and ad growth 20.
• U.S.-listed spot Bitcoin and Ethereum ETFs continued to see strong inflows, with ETH funds tying a 19-day inflow record 16.
• Comcast and Charter beat revenue estimates; Comcast’s broadband losses narrowed, Charter’s mobile lines grew 15.
• OpenAI’s annualized revenue doubled to $12B, with ChatGPT reaching 700M weekly users; seeking further funding 19.
• Toy makers petitioned the Supreme Court to void Trump’s “Liberation Day” tariffs; appeals ongoing 7.

Commentary

Trade policy remains a primary driver for U.S. markets. The South Korea deal offers some stability, reducing tariff pressure and securing substantial Korean investment in U.S.-selected industries, with direct benefits for energy, semiconductors, and shipbuilding 2. In contrast, the U.S. is escalating pressure elsewhere: new 25% tariffs on Indian goods 3 and a looming 30% tariff on Mexican imports 4 add uncertainty for supply chains, autos, and industrials. Ford ’s steep profit drop and guidance cut underline the direct impact of these tariffs on U.S. corporate earnings, especially in manufacturing 5.

China-related risks are twofold: the ongoing contraction in China’s manufacturing sector (PMI 49.3) signals continued weak global demand 8, while the cyber probe into Nvidia ’s H20 chips could disrupt semiconductor flows and add friction to U.S.-China tech trade 1. The Bank of Japan’s rate hold, paired with a higher inflation outlook, pushed the yen higher and nudged up Japanese bond yields—potentially influencing global rates and currency flows 9.

In equities, large-cap pharma saw mixed reactions: Eli Lilly ’s positive trial results failed to support its share price 11, while AbbVie , Biogen , and Bristol Myers all delivered beats and raised guidance, supporting sector rotation 1314. Tech remains a leadership group, with Microsoft and Meta buoyed by analyst upgrades following strong AI and ad-driven earnings 20. OpenAI’s rapid revenue growth and ongoing crypto ETF inflows (especially into Ethereum) highlight continued institutional interest in AI and digital assets 1916.

Cable and telecom names outperformed expectations, with Comcast and Charter showing resilience as broadband declines eased and mobile growth accelerated 15. On the regulatory front, the Supreme Court petition on Trump’s tariffs is a potential wildcard for importers and consumer goods 7.

Traders should focus on headline risk around U.S.-Mexico tariff talks 4, ongoing U.S.-China tech tensions 1, and sector rotation in tech, pharma, and industrials. Currency and rate moves—especially in the yen and peso—also warrant close attention 9.