- Asian Shares Dip on Tariff Woes, LME Copper Falls: Markets Wrap
Asian shares posted a modest decline as investors refrained from taking risky bets after President Donald
Trump ratcheted up trade tensions. Copper futures in London fell on Trump’s latest tariff threat. A regional
stock gauge declined 0.3%, its third drop in four days. Hong Kong shares retreated 0.9% after China’s factory
deflation persisted into a 33rd month while consumer prices unexpectedly rose in June. Shares in mainland
China rose 0.3%, on course for the highest closing level since December. Treasuries fell for a fifth session as
demand for long-term government debt across the globe waned amid a flurry of bond auctions this week. - S&P 500 ends Tuesday little changed as Trump’s tariff policy keeps traders on edge
The S&P 500 ended Tuesday’s session near the flatline after President Donald Trump offered no exceptions to
his Aug. 1 tariff start date. The broad market benchmark inched down 0.07%, ending at 6,225.52, while the
Nasdaq Composite added 0.03% and closed at 20,418.46. The Dow Jones Industrial Average slipped 165.60
points, or 0.37%, settling at 44,240.76. - Oil prices hold near 2-week high as traders assess US tariffs, OPEC+ output boost
Oil prices held near a two-week high on Tuesday as investors assessed the latest developments on U.S. tariffs
and a higher than expected increase to OPEC+ output for August. Brent crude futures was up 57 cents, or
0.82%, to close at $70.15 a barrel, while U.S. West Texas Intermediate (WTI) crude rose 40 cents, or 0.59%, to
settle at $68.33. That put both crude benchmarks on track for their highest closes since June 23 for a second
day in a row. Powerhouse Asian economies Japan and South Korea said on Tuesday they would try to negotiate
with the U.S. to soften the impact of sharply higher tariffs that U.S. President Donald Trump now plans to
impose from the start of August. Trump ramped up his trade war again on Monday, telling 14 nations that they
would face tariffs ranging from 25% for countries including Japan and South Korea, to 40% for Laos and
Myanmar. Trump’s tariffs have raised uncertainty across the market and concerns that they could have a
negative effect on the global economy and oil demand. In Germany, the biggest economy in Europe, exports
fell more than expected in May, data showed on Tuesday, as demand from the U.S. dropped for the second
consecutive month due to the impact of tariffs. While prices seem to be pressured by OPEC+ unwinding its
voluntary output cuts, tightness in middle distillates and Houthi attacks on cargo ships are supporting the
market, said Janiv Shah, an analyst at energy consultancy Rystad Energy. On Saturday, the OPEC+ group
comprising the Organization of the Petroleum Exporting Countries (OPEC) and its allies, like Russia, agreed to
raise production by 548,000 barrels per day (bpd) in August, exceeding the 411,000 bpd increases in the
previous three months. - Gold hovers near one-week low as firmer US dollar, yields weigh
Gold prices hovered on Wednesday near their lowest point in more than one week, under pressure from a
stronger U.S. dollar and rising Treasury yields, as fresh tariff threats from U.S. President Donald Trump
unsettled markets. Spot gold held its ground at $3,301.50 per ounce as of 0234 GMT. U.S. gold futures fell 0.2%
to $3,310.10. Trump said he would impose a 50% tariff on imported copper and introduce long-threatened
levies on semiconductors and pharmaceuticals. Trump reiterated his threat of 10% tariffs on BRICS nations on
Tuesday, a day after notifying 14 countries, including Japan and South Korea, of tariff increases set to take
effect on August 1. The U.S. dollar index steadied after nearing a two-week high late on Tuesday, while the
yield on benchmark 10-year U.S. Treasury notes hovered near a three-week high. “Gold prices are holding up
impressively well this month against a backdrop of rising yields and a strengthening U.S. dollar … its ability to
resist the pressure suggests underlying strength and a bullish bias,” said Ilya Spivak, head of global macro at
Tastylive. Higher yield increases the opportunity cost of holding non-yielding bullion, while a weaker dollar
makes gold more affordable for holders of other currencies. Spot silver fell 0.5% at $36.58 per ounce. - China’s producer prices fall 3.6% in June, biggest drop in nearly two years as deflation deepens
China’s producer prices plunged 3.6% in June from a year earlier, marking its largest decline in nearly two years,
as a deepening price war rippled through the economy that’s already grappling with tepid consumer demand.
The consumer price index edged 0.1% higher in June from a year ago, according to data from the National
Bureau of Statistics Wednesday, returning to growth after four consecutive months of declines.Economists had
forecast a flat reading compared to the same period a year earlier, according to a Reuters poll. Core CPI,
stripping out food and energy prices, rose 0.7% from a year ago, the biggest increase in 14 months, according
to NBS. The drop in producer prices, however, came worse than the expected 3.2% in a Reuters poll and marked
its biggest fall since July 2023, according to LSEG data. The PPI has been mired in a multi-year deflationary
streak since September 2022. Mainland China’s CSI 300 index rose 0.19% following the release. “It is too early
to call the end of deflation at this stage [as] the momentum in the property sector is still weakening [and] the
‘anti-involution’ campaign is still at its early phase,” said Zhiwei Zhang, president and chief economist at
Pinpoint Asset Management. Involution, known colloquially as “neijuan” in China, refers to the price wars
plaguing some consumer sectors. - Trump Vows No Tariff Extension, Hardens Threats on Copper, Drugs
President Donald Trump vowed to push forward with his aggressive tariff regime in the coming days, stressing
he would not offer additional extensions on country-specific levies set to now hit in early August while
indicating he could announce substantial new rates on imports of copper and pharmaceuticals. The posturing
on social media and at a Cabinet meeting on Tuesday came after traders initially shrugged off a series of letters
and executive actions Trump issued Monday, pushing back the deadline for his so-called “reciprocal” tariffs
while announcing the latest rates he planned for more than a dozen countries that had not succeeded in
brokering quick trade agreements. - Trump tariffs raise the specter of sharper economic downturn for South Korea and Japan
While South Korean imports to the U.S. face 25% tariffs, the same as Trump promised in April, the rate on
Japan has been raised by 1 percentage point to 25%. Both Japan and South Korea saw first-quarter gross
domestic product contract on a quarter-on-quarter basis. Imports of automobiles and auto parts to the U.S.
currently incur a 25% tariff, while steel and aluminum attract a 50% levy on most countries. - Super Micro plans to ramp up manufacturing in Europe to capitalize on AI demand
Super Micro plans to increase its investment in Europe, including ramping up manufacturing of its AI servers in
the region, CEO Charles Liang told CNBC in an interview that aired on Wednesday. The company sells servers
which are packed with Nvidia chips and are key for training and implementing huge AI models. It has
manufacturing facilities in the Netherlands, but could expand to other places. “But because the demand in
Europe is growing very fast, so I already decided, indeed, [there’s] already a plan to invest more in Europe,
including manufacturing,” Liang told CNBC at the Raise Summit in Paris, France. “The demand is global, and the
demand will continue to improve in [the] next many years,” Liang added. Liang’s comments come less than a
month after Nvidia CEO Jensen Huang visited various parts of Europe, signing infrastructure deals and urging
the region to ramp up its computing capacity. - Intel Stock Surges as Chipmaker Cuts Over 500 Jobs
Intel (INTC) said it plans to start laying off hundreds of workers in Oregon as part of previously announced cuts
under its restructuring plan. Shares of the embattled chipmaker jumped over 7% Tuesday, extending recent
gains driven by hopes that new CEO Lip-Bu Tan can engineer a turnaround and speculation of potential deals to
sell parts of its business. Still, the stock has lost close to a third of its value over the past 12 months. The cuts
will affect about 529 employees at four facilities in Aloha and Hillsboro, Ore., starting on July 15, Intel said in a
regulatory filing Monday. The chipmaker in recent weeks said it would trim over 100 roles in Santa Clara, Calif. - Meta Platforms bought a minority stake in the world’s largest eye-wear maker EssilorLuxottica SA, a deal
that increases the US tech giant’s financial commitment to the fast-growing smart glasses industry, according
to people familiar with the matter
Facebook parent Meta acquired just under 3% of Ray-Ban maker EssilorLuxottica, a stake worth around €3
billion at the current market price. Meta is considering further investment that could build the stake to around
5% over time, the people added, though those plans could still change. Meta’s investment in the eyewear giant
deepens the relationship between the two companies, which have partnered over the past several years to
develop AI-powered smart glasses. Meta currently sells a pair of Ray-Ban glasses, first debuted in 2021, with
built-in cameras and an AI assistant. Last month, it launched separate Oakley-branded glasses with
EssilorLuxottica. The deal aligns with Meta CEO Mark Zuckerberg’s commitment to AI. Smart glasses are a key
part of that plan. While Meta has historically had to deliver its apps and services via smartphones created by
competitors, glasses offer Meta a chance to build its own hardware and control its own distribution, Zuckerberg
has said. - JPMorgan, and Bank of America shares both fell 3.1% following downgrades from HSBC. JPMorgan was
lowered to reduce from hold. Bank of America was downgraded to hold from buy
Valuations are “increasingly stretched” after a rally in the banks’ stocks, the analyst wrote. While operating
fundamentals are strong, factors like credit quality and an improving investment banking environment are
“well priced in,” Martinez wrote. Risks related to macroeconomic uncertainty, including potential interest-rate
cuts and slowing economic growth, appear to be downplayed.
