Source: Cailian Press
On Tuesday, the three major U.S. stock indexes closed mixed, with the S&P 500 Index barely ending at a record high. Investors are focusing on second-quarter corporate earnings reports and looking for signs of progress in U.S. trade negotiations.
Optimism about significant investments in artificial intelligence is serving as a 'stabilizing force' for the rising stock prices of the most valuable companies on Wall Street, keeping the major indexes near their historical highs.
Baird investment strategy analyst Ross Mayfield noted: 'The market is digesting recent gains and is currently in a wait-and-see mode. In the next one to two weeks, two major catalysts will come into play: the August 1st tariff deadline and the key earnings reports from the seven largest U.S. companies.'
As the August 1st tariff deadline set by Trump for many countries approaches, U.S. trade policy remains a major source of uncertainty for investors and businesses.
According to CCTV News, Trump tweeted on Tuesday that he met with visiting Philippine President Marcos at the White House, and they reached a trade agreement. Trump stated that a 19% tariff would be imposed on the Philippines. The Philippines will open its market to the U.S. and implement zero tariffs.
However, other trade negotiations seem to have stalled. Optimism about reaching a breakthrough agreement with India is waning, and EU officials are also considering retaliatory measures against the U.S.
Additionally, Trump once again targeted Federal Reserve Chair Jerome Powell, demanding that he cut interest rates quickly, calling him 'a bonehead,' and stating that Powell would soon be out.
Following the release of mixed economic data last week, traders have almost ruled out the possibility of a rate cut by the Federal Reserve at its upcoming policy meeting. According to the CME Group's FedWatch tool, they now see about a 60% chance of a rate cut in September.
Analysts at UBS Global Wealth Management stated: 'We expect market volatility to increase as the August tariff deadline approaches, with threats to the Fed’s independence and geopolitical uncertainties still lingering in the background.'
Market Dynamics
At the close of trading, the Dow Jones Industrial Average rose 179.37 points, or 0.40%, to 44,502.44; the Nasdaq Composite fell 81.49 points, or 0.39%, to 20,892.69; and the S&P 500 Index gained 4.02 points, or 0.06%, to 6,309.62.
Among U.S. sector ETFs, the biotechnology index ETF closed up 2.87%, the medical industry ETF and utilities ETF each rose up to 1.86%, the consumer discretionary ETF increased by 1.01%, and the banking ETF, financials ETF, energy ETF, and regional banking ETF each rose up to 0.62%. The global technology stock index ETF fell 1.08%, and the semiconductor ETF declined 1.77%.
Nine out of the eleven sectors in the S&P 500 Index saw gains, with the healthcare sector leading, rising 1.9%, and the real estate sector increasing 1.78%.
Performance of Popular Stocks
Large-cap technology stocks were mixed, with Google A rising 0.65%, Apple up 0.9%, and Tesla gaining 1.1%. NVIDIA fell 2.54%, Meta dropped 1.14%, Microsoft decreased 0.94%, and Amazon declined 0.80%.
The recent Meme stock craze continues to spread, with Kohl's Corp surging over 37% and Opendoor Technologies falling by 10%. Some analysts predict that this wave of meme stock gains will dissipate at a faster rate.
General Motors fell more than 8% after its second-quarter earnings report showed a loss of $1.1 billion due to tariffs, resulting in a 35.4% year-over-year decline in net income for the quarter. This has heightened investor concerns about Trump's global trade policies.
Popular Chinese stocks generally rose, with the Nasdaq Golden Dragon China Index closing up 1.7%. NIO surged over 10%, Baidu rose more than 4%, and Xpeng Motors and PDD Holdings gained over 3%. JD.com and Li Auto both increased by more than 1%.
Company News
OpenAI Announces Mega Data Center Agreement with Oracle
On Tuesday evening, Beijing time, OpenAI issued a statement announcing an agreement with Oracle to develop an additional 4.5 gigawatts (GW) of 'Stargate' data centers. The announcement noted that, along with the 'Stargate I' project currently under construction in Abilene, Texas, the latest agreement brings the total capacity of 'Stargate' AI data centers being developed in the U.S. to over 5 GW, capable of running approximately 2 million chips. OpenAI particularly emphasized the commitment made in January with partners such as SoftBank and Oracle at the White House to invest $500 billion over four years to build 10 GW of AI infrastructure in the U.S. Thanks to the strong momentum from its partners, it is now expected that 'Stargate' will exceed the initial commitment.
Apple's Adjustments to App Store Rules and Fees May Gain EU Antitrust Approval
According to informed sources, Apple's adjustments to its App Store rules and fees are likely to gain approval from EU antitrust regulators, which would avoid the possibility of daily hefty fines. Last month, Apple announced that developers would be charged a 20% processing fee for in-app purchases, though for small businesses, the fee could be reduced to as low as 13%. Developers who direct customers to make payments outside the App Store will be charged between 5% and 15%. Additionally, they can use any number of links to direct users to external payment channels. In April, the EU antitrust enforcement agency fined Apple €500 million (approximately $586.7 million) and gave the company 60 days to comply with the Digital Markets Act. Sources say that the European Commission is expected to approve these changes in the coming weeks, although the timeline may still change.
【Elon Musk's xAI Aims to Raise $12 Billion】
According to media reports, Elon Musk's artificial intelligence (AI) startup, xAI, is preparing to raise $12 billion to maintain its leading position in the AI arms race. Sources revealed that just weeks after xAI secured $10 billion through a combination of equity and debt financing, the startup is now planning another massive fundraising round of up to $12 billion in collaboration with Valor Equity Partners. On Tuesday, Musk stated that xAI is training Grok on a supercomputing cluster called Colossus 1, using 230,000 GPUs, including 30,000 NVIDIA GB200 AI chips.
【Amazon Acquires AI Wearable Device Maker Bee】
Amazon has acquired the startup Bee, which produces a wearable AI assistant priced at $50. Lourdes Zorrilla, a co-founder of the San Francisco-based startup, announced the acquisition in a brief LinkedIn post. Bee’s wristband can record and transcribe user activities, using this information to generate to-do lists and summarize conversations. Alexandra Miller, an Amazon spokesperson, stated that as part of the agreement, all Bee employees have been offered positions at Amazon.
【Tensions Between Tesla and SpaceX Continue to Escalate; SpaceX May Lose Dominance in Starlink Project】
According to three sources with knowledge of the matter, the Trump administration is expanding its search for partners to build the “Golden Dome” missile defense system, courting Amazon’s Kuiper project and major defense contractors. The strained relationship between Trump and Musk threatens SpaceX’s dominant role in the project. This shift marks the Trump administration’s move away from reliance on Musk’s SpaceX, whose Starlink and Starshield satellite networks have become central to U.S. military communications. The relationship between Trump and Musk has deteriorated, culminating in a public falling out on June 5. Two sources indicated that even before the dispute, officials at the Pentagon and the White House had already begun exploring alternatives to SpaceX, concerned about over-reliance on a single partner for the majority of the $175 billion space-based defense system.
Editor: Jayden
