Both the S&P 500 ETF (SPY) and the Nasdaq 100 ETF (QQQ) closed the trading session in the red as the market approaches a stretch of negative seasonality.
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On Monday, President Trump signed an executive order extending China’s tariff deadline by 90 days to November 9. The previous deadline was set to expire tomorrow, August 12. Chinese imports are currently subject to a 54.9% tariff, while U.S. imports to China face a rate of 32.9%, according to the Peterson Institute for International Economics. The order comes after trade representatives from both sides met in Stockholm, Sweden last month.
Trump also confirmed that the U.S. would receive a 15% revenue share of Nvidia (NVDA) and Advanced Micro Devices (AMD) chip sales to China. In exchange, the two companies will receive export licenses to the country. Nvidia and AMD both produce chips tailored for the Chinese market—Nvidia with its H20 model and AMD with its MI308 model. Trump added that he had initially asked for a 20% cut before Nvidia CEO Jensen Huang negotiated it down to 15%. He also said Huang may return to the White House to negotiate sales of Blackwell—Nvidia’s most advanced chip—to China.
In other news, Trump announced that he will meet with Russian President Vladimir Putin this upcoming Friday in Alaska in an attempt to end the Russia-Ukraine war. He added that a ceasefire deal could include “some swapping, changes in land” and that he would try to regain territory for Ukraine.
The Nasdaq 100 (NDX) was able to secure a new intraday all-time high of 23,698, although the gains were short-lived as the index closed in the red. AI stocks, like NVDA, AMD, and Broadcom (AVGO) have helped the index increase by 12% year-to-date. Even more impressive is that the NDX has accelerated higher by 38% since its low on April 8.
Meanwhile, interest rate cuts are likely on the way, according to CME’s FedWatch tool. By the end of the year, the odds of three rate cuts are at 44.2% and the odds of two rate cuts are at 42.9%. Fed Governor Michelle Bowman, one of the two Fed officials to vote for a rate cut during the July Federal Open Market Committee (FOMC) meeting, said that she is considering voting for three rate cuts this year. Bowman cited a weakening labor market and economy as her rationale.
“I remain cautious about taking too much signal from data releases, but I see the latest news on economic growth, the labor market, and inflation as consistent with greater risks to the employment side of our dual mandate,” said Bowman while giving a speech in Colorado.
The S&P 500 (SPX) closed with a 0.25% loss while the Nasdaq 100 (NDX) fell by 0.36%.
