TL;DR

US doubles India tariffs; Nvidia earnings eyed; EU to scrap US industrial tariffs; VIX shorts peak.

Highlights

• US doubles tariffs on most Indian imports to 50% over Russian oil ties, targeting labor-intensive goods and risking a sharp drop in Indian exports to the US 1.
• EU fast-tracks plan to scrap tariffs on US industrial goods, potentially leading to reduced US auto tariffs on EU vehicles 2.
• Nvidia reports Q2 earnings after the close; expectations are for $46–48B revenue, with guidance on China and next-gen chips in focus 4.
• Hedge funds hold largest net VIX short since 2022, reflecting market calm but raising risk of a volatility spike 8.
• China unveils "AI Plus" roadmap, aiming to triple domestic AI chip output and expand AI integration by 2027 3.
• Crypto funds see $1.4B in weekly outflows, the worst since March, with Bitcoin and Ether ETFs hit by redemptions 11.
• French government faces Sept. 8 confidence vote on debt plan; OAT yields rise, CAC 40 drops, and risk premium over Bunds widens 5.
• Eli Lilly ’s Verzenio shows significant survival benefit in high-risk early breast cancer; stock up 1% pre-market 9.
• OpenAI prepares $8B employee share sale amid ongoing governance talks with Microsoft 10.
• US Commerce Secretary signals major overhaul of H-1B and green-card rules, with possible impact on tech hiring 14.
• Taiwan raises defense spending to 5% of GDP, conducts US military drills as China criticizes Taiwan’s WWII stance 7.
• US CFTC left with a single commissioner after Johnson exit, deepening regulatory uncertainty for derivatives and crypto markets 12.

Commentary

Trade policy is in sharp focus as the US doubles tariffs on Indian imports, a move likely to disrupt supply chains for apparel, gems, and other labor-intensive goods 1. The escalation risks a significant contraction in Indian exports to the US and could add cost pressures for US importers 1. Meanwhile, the EU's accelerated push to eliminate tariffs on US industrial goods could pave the way for reduced US auto tariffs on European vehicles, offering some relief for transatlantic manufacturers and signaling a potential easing of trade tensions with Europe 2.

Markets are largely steady ahead of Nvidia ’s earnings, with the chipmaker’s results set to influence sentiment across tech and the broader S&P 500 4. Given Nvidia ’s heavy index weighting and the extreme short-VIX positioning by hedge funds, any earnings or guidance surprise—particularly on China sales or next-gen products—could drive outsized volatility 48. The build-up in VIX shorts suggests traders are positioned for continued calm, but this leaves the market exposed to abrupt risk-off moves if macro or company-specific shocks emerge 8.

China’s new AI roadmap and plans to ramp up domestic chip production underscore ongoing tech decoupling and may pressure US semiconductor firms’ China sales over time 3. In digital assets, the sharp outflows from crypto funds highlight persistent risk aversion and regulatory uncertainty, compounded by the CFTC’s leadership vacuum 1112. Despite this, institutional interest in Ethereum remains strong, as ETF inflows continue 17.

European political risk is back in play with France’s government facing a confidence vote and rising bond yields, which could spill over into global rates markets 5. On the regulatory front, the US Commerce Secretary’s call for a major overhaul of skilled immigration programs could impact tech hiring pipelines, particularly for firms reliant on H-1B visas 14.