Market Report.
📈 The U.S. has doubled its tariffs on steel and aluminum imports, increasing the levy from 25% to 50%. This will significantly impact European steel exporters to the U.S., including in countries like Germany, Italy, Sweden and the Netherlands.
🇬🇧 The U.K. has been granted a temporary reprieve, with a 25% tariff remaining in place as details of its recently signed trade deal with the U.S. are worked out. However, Trump warned the tariff could be increased to 50% if the U.S. is not satisfied with the U.K.’s compliance.
🇪🇺 The European Union has condemned the 50% tariffs, saying it undermines ongoing trade negotiations and that the bloc is prepared to impose countermeasures if a mutually acceptable solution is not reached.
⚠️ We warned days ago that the trade agreements signed were ambiguous and fragile, especially the agreement with the EU. Here is an example of this.
💻 What is happening in the technology sector and the microchip market in the US?
🖥️ Nvidia is evaluating several products, including a new artificial intelligence chip for China called the B30A, which is expected to be more powerful than the currently available H20 chip. The B30A is reported to be based on Nvidia’s Blackwell chip architecture, and the company hopes to deliver sample units to Chinese clients for testing as soon as next month. Commerce Secretary Howard Lutnick praised Nvidia CEO Jensen Huang and said he wouldn’t be surprised if Huang wants to sell a new chip to China.
🤝 Earlier this month, Nvidia and AMD agreed to give the U.S. government a 15% cut of their sales in China, in exchange for permission to resume selling chips in the region, after the Trump administration had halted the sale of advanced computer chips to China. President Trump suggested he would be open to Nvidia selling a significantly scaled-down version of its advanced Blackwell chip in China, potentially with 30% to 50% of the capabilities removed.
🛡️ Is the US technology sector being nationalised? Remember when we mentioned last week, quoting a WSJ article, the possibility that Trump was taking steps towards a socialist economy?
🏢 Commerce Secretary Howard Lutnick stated that Intel must give the U.S. government an equity stake in the company in return for CHIPS Act funds, saying “We should get an equity stake for our money.” Lutnick clarified that this would not provide the government with voting or governance rights in Intel, but rather convert the grant under the Biden administration into equity for the Trump administration. The White House is reportedly discussing a potential 10% stake in Intel, which could make the U.S. government the chipmaker’s largest shareholder.
📊 Lutnick suggested President Trump could seek similar equity deals with other recipients of CHIPS Act funding, such as TSMC and its $6.6 billion grant. The goal appears to be converting government grants and funding for semiconductor manufacturing into an equity stake, rather than providing the funds as outright grants.
🌍 Geopolitics:
🪖 Yesterday, president Trump asserted that he will not deploy American ground troops to defend Ukrainian territory. He indicated that Ukraine is unlikely to join NATO, although European nations such as France, Germany, and the United Kingdom are prepared to offer support on the ground. Furthermore, Trump mentioned that the United States would facilitate a meeting between President Putin and President Zelenskyy, with the possibility of his own involvement if discussions proceed positively.
📞 According to AFP, Putin proposed to meet with Zelensky in Moscow during his call with Donald Trump.
📰 An article published by ZeroHedge summarises the current situation regarding the conflict in Ukraine as follows: “The Plan: Europe will spend $100BN it doesn’t have, to buy weapons America doesn’t have, to arm soldiers Ukraine now lacks”. The article is critical of the European and U.S. governments’ decisions to prioritize military spending over addressing domestic issues and the needs of their own populations. It also quotes the geopolitical analyst Glenn Diesen: Kiev is essentially attempting to create leverage out of nothing. “This is to confront Russia, which for 30 years warned it would respond to NATO militarizing its borders.” The war has now been lost, and the Americans are pulling away from it, asking the Europeans to absorb the consequences.
⚔️ Is a new war against Venezuela coming?
💵 The U.S. has doubled the reward for the capture of Venezuelan President Nicolás Maduro to $50 million, accusing him of orchestrating a large drug smuggling operation. Trump has deployed three guided-missile destroyers, approximately 4,000 sailors and Marines, and other naval assets to the southern Caribbean near Venezuelan waters, framing it as part of a broader crackdown on Latin American drug cartels.
🗣️ Maduro has sharply condemned these U.S. moves, labeling them “extravagant, bizarre, and absurd threats,” and has announced the activation of a “special plan” involving the deployment of over 4.5 million militia members across Venezuela.
📉 Market View.
📉 Slight declines in the stock markets. The Mini S&P 500 futures are retreating towards the area of 6415 points. In the case of the Nasdaq, the decline appears to be somewhat more pronounced, falling to around 23,360 points. American Microchip companies may have to pay 15% of their sales to China to the US government, which could have depressed the most bullish sector of the American market.
💵 The dollar index is resisting a drop and seems to be establishing a solid base above 98 points, currently seeking 98.35. This causes pairs like EUR/USD to create resistance above 1.17 and currently retreating to 1.1625.
📉 In Europe, DAX 40 futures also seem to be encountering resistance around 24,500 points, currently falling to 24,350 points. Euro Stoxx 50 futures, which reached 5500 points yesterday, are now retreating to 5470 points.
🛢️ The crude oil market remains flat and calm, with Brent crude trading around $66.25.
💰 The gold market is finding interesting support and is currently trading at $3370 for its futures contracts.
📉 Finally, Bitcoin continues to decline and has recently reached support at $112,750, from where it has bounced slightly to the current $113,670.
