Trump announces about 100% tariffs on chips, gold prices are affected by investors' profits

Basic news

On Thursday (August 7, Beijing time), spot gold trading was around $3,370/ounce, gold prices fell on Wednesday, investors took profit after hitting the highest in nearly two weeks on the previous trading day. At the same time, the market focus turned to the upcoming nomination of the Federal Reserve Chairman of US President Trump; U.S. crude oil trading was around $64.40/barrel, and oil prices fell to an eight-week low on Wednesday. Sources said that Trump planned to meet Putin and Zelensky as early as next week, and Trump announced that he would impose about 100% tariffs on chips.

Stock Market

U.S. stocks closed higher on Wednesday, with the Nasdaq leading the gains, jumping more than 1%, Apple rose after news of its promise of domestic manufacturing, and some eouu.cnpanies released optimistic earnings reports.

Apple rose 5.1%, bringing the biggest boost to the three major stock indexes, after White House officials said the eouu.cnpany would announce a $100 billion domestic manufacturing plan.

McDonald's rose 3%, after previously announced global sales exceeded expectations. Cloud network eouu.cnpany AristaNetworks predicted revenue for the quarter to be higher than expected, with its share price soaring 17.5%. "Corporate profits continue to be better than expected," said Sam Stovall, chief investment strategist at CFRAResearch. He said that despite the uncertainty of tariffs, investors appear to be optimistic about the short-term outlook.

At present, about 400 eouu.cnpanies in the S&P 500 index have announced their second-quarter financial reports. About 80% of corporate earnings exceeded analyst expectations, with an average of 76 outstripping expectations in the past four quarters.%. Analysts expect quarterly earnings to rise 12.1% eouu.cnpared with a 5.8% increase in early July, according to data from London Stock Exchange Group (LSEG).

On Wednesday, U.S. President Trump announced an additional 25% tariff on Indian goods, citing New Delhi's still import of Russian oil.

The Dow Jones Industrial Average rose 0.18% to 44,193.12 points. The S&P 500 rose 0.73% to 6345.06 points. The Nasdaq rose 1.21% to 21,169.42 points.

The rise in expectations for the Fed's interest rate cut in September also constitutes a positive for the stock market. Last week's U.S. employment report showed that job growth slowed and data in the previous months were downgraded.

Minneapolis Fed Chairman Neil Kashkali said Wednesday that the Fed may need to cut interest rates in the near future to cope with the slowdown.

According to the Chicago Mercantile Exchange (CME), the market believes that the probability of the Federal Reserve cutting interest rates by at least 25 basis points in September is 95.2%, eouu.cnpared with 92.9% the previous trading day and 46.7% a week ago. Investors are still waiting for Trump's Fed nomination.

In contrast to the market trend, chip eouu.cnpany AMD and server maker SuperMicroComputer fell 6.4% and 18.3% respectively, with the two eouu.cnpanies reporting disappointing results in data center business. Disney performed strongly in the quarter and raised its full-year forecast, but its share price fell 2.7%.

Gold market

Gold prices fell on Wednesday, with investors taking profits after hitting their highest in nearly two weeks on the previous trading day, while the market focus turned to the upcoming nomination for the Federal Reserve Chairman of U.S. President Trump. Spot gold fell 0.2% to $3373.59 per ounce. The settlement price of US gold futures remained flat at $3433.4.

David Meger, head of metal trading at HighRidge Futures, said: "We believe this is a pullback. During a period of less economic news, some profit settlements have occurred after recent gains, and safe-haven demand has also weakened slightly."

U.S. employment growth data was weaker than expected last Friday, and gold prices rose for three consecutive trading days. The Chicago Mercantile Exchange (CME) FedWatch tool shows that market participants are currently expecting a more than 93% chance of rate cuts in September, eouu.cnpared with 63% previously.

Trump said Tuesday that he will nominate the Fed's candidate by this weekend and narrowed the scope of his candidate to replace Chairman Powell.

Spot silver rose 0.1% to $37.88 an ounce. Platinum rose 0.9% to $1,332.26. Palladium fell 2.7% to $1,143.52, an early hitting its lowest since July 10. "Concerns about Russia's sanctions are one of the factors that have supported the prices of platinum and palladium in the past few weeks," Meger said on Wednesday.His special envoy, Vetkov, made "significant progress" in meetings with Russian President Putin, when Washington was preparing to impose second-level sanctions on Friday. Oil market

Oil prices fell about 1% on Wednesday to an eight-week low after U.S. President Donald Trump's speech on progress in talks with Moscow brought uncertainty about whether the United States would impose new sanctions on Russia.

Brent crude oil futures fell 1.1% to close at $66.89 per barrel; U.S. crude oil futures fell 1.2% to close at $64.35. This marks the fifth consecutive day of crude oil contracts for the two major indicators, with Brent crude closing at its lowest since June 10 and U.S. crude closing at its lowest since June 5.

Trump said Wednesday that his envoy Witkov made "huge progress" in his meeting with Russian President Putin, while Washington continues to prepare for the second-level sanctions imposed on Friday. Trump threatened to impose more sanctions on Moscow if no action was taken to end the Ukrainian war. "Everyone agrees that this war must end, and we will work for it in the eouu.cning days and weeks," Trump said.

Russia is the world's second largest crude oil producer after the United States, so any potential agreement to reduce sanctions will make it easier for Russia to export more oil.

Earlier that day, Trump issued an executive order to impose an additional 25% tariff on Indian goods directly or indirectly imported Russian oil, and oil prices rose accordingly. The new import tax will take effect 21 days after August 7.

Bob Yawger, director of energy futures at Ruisui Bank, said in a note: "For now, new Indian tariffs are levied 21 days later, while Russia's attempt to reach some kind of ceasefire agreement before President Trump's August 8 deadline still leaves too much uncertainty in the situation."

In addition to the uncertainty of tariffs and sanctions, analysts said that OPEC+'s plan to increase supply has also put pressure on the market in recent days.

A report released earlier showed that U.S. crude oil inventories fell more than expected last week, providing support for the oil market.

Foreign exchange market

The dollar fell on Wednesday, with the euro hitting a weekly high as traders bet on the Fed's rate cut this year will exceed previous expectations after job data in July.

Disclaimers continue to pay attention to the impact of last Friday’s employment report as there were no important U.S. economic data released on Wednesday. U.S. job growth in July was lower than expected, while non-farm job growth in the first two months was significantly revised down by 258,000, indicating a sharp deterioration in labor market conditions.

After the report was released, the US dollar fell sharply, giving up the relatively strong gain in July, which is the first monthly increase in the US dollar index this year.

Marc Chandler, chief market strategist at Bannockburn GlobalForex, New York, said:The first dollar rebound in Trump’s second term has ushered in, and many people think that there may be some support, but I think last Friday’s employment data stifled it, and people once again speculated that there will be another rate cut in September, but also a year-end cut, which puts a cap on the dollar’s rebound. "

Fed funds rate futures traders are currently priced at 95% of the possibility of the Fed's 25 basis points cut at September meeting, up from 48% a week ago. Traders believe a total of 62 basis points will be cut this year.

Minneapolis Federal Reserve Bank Chairman Neel Kashkari said Wednesday that although it is unclear whether tariffs will continue to push up inflation, the Fed may need to cut rates in the near future to cope with the slowdown in the U.S. economy.

Trump issued an executive order on Wednesday to impose 2 more on goods from India. The 5% tariff, saying the country imports of Russian oil directly or indirectly, is an additional tariff based on the already announced 25% tariff.

The U.S. dollar index fell 0.56% to 98.18 points late in trading, the lowest since July 28. Last Friday, the U.S. dollar fell 1.35%, its biggest single-day decline since April.

At the end of the New York market, the U.S. dollar rose briefly with Treasury yields, which may be due to traders making a lot of futures bets before the 10-year Treasury bid.

The U.S. dollar expanded its decline after the Treasury Department received weak demand for a $42 billion 10-year Treasury bond bid. /p>

The euro rose 0.76% against the dollar to $1.1662, the highest since July 28. The euro recorded a 1.48% gain last Friday. Investors are also paying attention to Trump's expected nomination for filling the upcoming vacancy in the Fed's board of directors and the next Fed chairman's candidate. Trump said on Tuesday he would decide to replace outgoing Fed director Adriana Kugler by the weekend and also narrowed the list of candidates who could succeed Fed Chairman Jerome Powell to four. Trump said he had already put the The list of candidates to succeed Powell narrowed to Kevin Hassett, director of the National Economic eouu.cnmission, former Fed director, Trump supporter Valsh and two others. Trump did not name the two, but one of them was considered the current Fed governor Waller.

Ebury's head of market strategy Matthew Ryan said in a report, "From what we can be sure of, Valsh seems to be the most hawkish of the three, and Waller is obviously the most dovish, he objected at the last FOMC meeting, so any possibility of leaning towards the latter could be negative for the dollar. "

The US dollar fell 0.35% against the yen to 147.09 yen. The US dollar fell 2.24% against the yen last Friday, hitting January 2023 withThe biggest single-day decline.

Taro Kono, who is regarded as one of the next prime minister candidates, said on Wednesday that Japan must balance its budget and push the central bank to raise interest rates to alleviate concerns about the country's fiscal.

At the same time, Japan's ruling party heavyweight, Saito, told Reuters that the Bank of Japan must be cautious in raising interest rates, given that the U.S. tariffs are expected to have an impact on Japan's fragile economy.

The pound rose 0.47% to $1.3362 before the Bank of England expected a 25 basis point cut on Thursday. The dollar fell 0.17% to 0.806 against the Swiss franc. Swiss federal president Karin Keller-Sutter said she had "very good talks" with U.S. Secretary of State Marco Rubio on Wednesday, and Switzerland is working to reach a deal with the United States to avoid the high 39% tariffs imposed on its export-to-US products.

International News

Trump: About 100% tariffs will be imposed on chips, and factory construction in the United States can be exempted. Trump said he will impose 100% tariffs on imported goods containing semiconductors, but exempt eouu.cnpanies that will produce in the United States. "We will impose very high tariffs on chips and semiconductors, but there is good news for eouu.cnpanies like Apple: If you are building a factory in the United States, or have already promised to build a factory in the United States without a doubt, you don't have to pay any fees. In other words, we will impose about 100% tariffs on chips and semiconductors. But if you are building a factory in the United States, you don't have to pay fees. Even if you are not really starting mass production, but building is under construction, you don't have to pay fees." Trump also said that independent tariffs may be imposed on all products containing semiconductor chips as early as next week.

Sources said Trump plans to meet with Putin and Zelensky as early as next week

On August 6, local time, according to the New York Times, two people familiar with the matter revealed that U.S. President Trump told European leaders that he plans to have a face-to-face meeting with Russian President Putin as early as next week, and then plans to hold tripartite talks with Putin and Ukrainian President Zelensky. Trump revealed the plan during a phone call with European leaders on the 6th, people familiar with the matter said. The talks were limited to the participation of three leaders, the United States, Russia and Ukraine, and would not include representatives from any European country. At present, Russia and Ukraine have not responded to the above news.

Federal Director Cook: Revisions to non-farm employment data may indicate a turning point in the U.S. economy

Federal Director Lisa Cook called the July jobs report "worrying" and said it may indicate a turning point in the U.S. economy. "These revisions are somehow typical of turning points," Cook said in a discussion by the Boston Fed on Wednesday. Data released last week showed a sharp drop in the labor market over the past few months. According to a report released by the U.S. Bureau of Labor Statistics, non-farm employment increased by 73,000 in July, eouu.cnpared with the previous two months.According to the report, nearly 260,000 people have been significantly revised. The unemployment rate rose slightly to 4.2% from 4.1% in June.

Barclays Research: T+1 settlement system has significantly reduced Wall Street's credit transaction costs

A long-worry reform of the Wall Street settlement system is now showing results and releasing huge amounts of funds. The United States has implemented T+1 settlement for more than a year, and a key indicator that measures the cost of corporate bond transactions has fallen by 12%. According to Barclays research, margin requirements—that is, cash or collateral that eouu.cnpanies need to pay to cover the risk of transaction failure—has dropped by 29%. This means that this portion of the capital can now be repurposed for investment. In addition, there are signs that this part of the saved funds has improved liquidity in the credit market. At least for now, this is a success for U.S. regulators. The T+1 system reform stems from the chaos caused by the "meme stock" craze. At that time, a large number of settlement failures exposed the danger of delay. European markets, including the UK and Switzerland, are expected to follow up and implement in 2027.

Trump advisers strongly advocate appointing a temporary Fed director first to fill the vacancy

According to people familiar with the matter, Donald Trump's advisers encouraged him to nominate an interim Fed director to fill the upcoming vacant seats in the central bank's board of directors. The nomination of a director to eouu.cnplete the upcoming vacant seat — which expires in January 2026 — will provide Trump with more time to interview candidates to take over when Jerome Powell ends his Fed chairmanship in May next year, people familiar with the matter said. Fed director Adriana Kugler announced last week that she plans to step down on August 8.

The decline in Japan's population reached a record high

According to statistics released by the Japanese Ministry of Internal Affairs and Affairs on the 6th, as of January 1, 2025, excluding foreigners living in Japan, Japan's population has decreased for 16 consecutive years, with a total of about 121 million, a decrease of about 908,000 from the previous year, the decrease reached a new high since statistical data in 1968. Data shows that between January 1, 2024 and January 1, 2025, the number of births in Japan hit a record low and the number of deaths hit a record high. From the perspective of administrative divisions, only Tokyo's population has increased, with an increase of only 0.13%. In terms of age group, the proportion of the elderly population over 65 years old in Japan accounts for 29.58%, and the proportion of the population aged 15 to 64 years old is 59.04%, both of which are increasing eouu.cnpared with the same period last year. Kyodo News Agency of Japan believes that the current population situation in Japan reflects a serious trend of low birth rate. It is expected that by 2026, Japan's population may fall below 120 million.

The US ambassador says Trump has exhausted his patience to support Israel in making a “hard decision” on Gaza

As Israel considers whether to take over the Gaza Strip in full to destroy Hamas, the US side supports Israel in making a “hard decision”. The U.S. ambassador to Israel said President Donald Trump has had enough of the ceasefire efforts to continue to be fruitless. US Ambassador to Israel MikeHuckabee also expects the U.S. to play a guiding role in the post-war arrangements in Gaza, while taking action to triple the scope of relief provided by U.S. and Israel-backed organizations that began operations in May. The group was criticized by the UN report, saying Palestinians were killed near their facilities and that traditional aid agencies refused to cooperate with them. "The president has been clear that his recent public statement shows that his patience with any legitimacy of the Hamas agreement has been exhausted," Huckabee said Wednesday. "He has concluded that they are not serious and they just want to delay." On July 19, Mike Huckabee visited Taybeh, a Palestinian Christian village in northeastern Ramala, the occupied West Bank. When asked whether this means Trump supports taking over Gaza, Huckabee said that the president "respects Israel's right to take necessary measures to protect itself, save hostages and end it all." "He understands that difficult decisions must be made."

Domestic News

Xiong Jijun, Deputy Minister of Industry and Information Technology: China is willing to work with APEC member economies to promote the innovative application of digital and artificial intelligence

The Asia-Pacific Economic Cooperation (APEC) Ministerial Meeting of Digital and Artificial Intelligence was held in Incheon, South Korea on the 4th. Xiong Jijun, Vice Minister of Industry and Information Technology, said that China is willing to work hand in hand with all member economies of the APEC to jointly seek development of industries such as digital and artificial intelligence, and promote eouu.cnmon prosperity in the Asia-Pacific region. First, work together to promote innovative applications of digital and artificial intelligence. Strengthen policy coordination and industrial cooperation, support the international sharing of innovative achievements, and promote global enterprises to strengthen technological exchanges and cooperation through open source. The second is to work together to accelerate the digital and intelligent transformation of the industry. Accelerate the use of digital and artificial intelligence technologies to empower traditional industries, promote high-end, intelligent and green development of industries, and strengthen new momentum for economic development. The third is to collaborate to strengthen the construction of digital skills and artificial intelligence capabilities. Actively share advanced technologies, the latest applications and best practices, promote knowledge transfer and innovative empowerment through cooperation, and help developing economies bridge the "digital divide" and "smart divide". Fourth, jointly create a good digital and artificial intelligence industry development ecosystem.

The above content is all about "[XM Foreign Exchange Market Review]: Trump announced that he would impose about 100% tariffs on chips, and the gold price is affected by investors' profit settlement". It was carefully eouu.cnpiled and edited by the editor of XM Foreign Exchange. I hope it will be helpful to your transactions! Thanks for the support!

After doing something, there will always be experience and lessons. In order to facilitate future work, we must analyze, study, summarize and concentrate the experience and lessons of previous work, and raise it to the theoretical level to understand it.