By Mike Dolan
LONDON (Reuters) – What matters in U.S. and global markets today
By Mike Dolan, Editor-At-Large, Finance and Markets
After a relatively quiet start to the week, markets on Tuesday will have to navigate a torrent of new information on U.S. inflation, bank earnings and Chinese growth, with a fresh jump from chip giant Nvidia thrown into the mix.
I’ll dig into all of this below. Make sure to check out today’s column, where I discuss how markets are reacting to the renewed pressure President Trump is putting on Fed Chair Jerome Powell.
Today’s Market Minute
* China’s economy slowed less than expected in the second quarter in a show of resilience against U.S. tariffs, though analysts warn that weak demand at home and rising global trade risks will ramp up pressure on Beijing to roll out more stimulus.
* The 30% tariff on European goods threatened by U.S. President Donald Trump would, if implemented, be a game-changer for Europe, wiping out whole chunks of transatlantic commerce and forcing a rethink of its export-led economic model.
* Tesla launched its Model Y at about $70,000 in India, the highest price among major markets, as the U.S. automaker grappling with slowing sales bets on prospects in a country CEO Elon Musk has long criticised for its high import tariffs.
* China’s imports of major commodities presented a mixed picture in the first half, writes ROI columnist Clyde Russell, but if there is a clear trend it is that the world’s top buyer of natural resources is increasingly sensitive to prices.
* While the United States appears well on its way to a record corn crop, the top exporter is not completely immune to yield barriers moving forward. Read the latest from ROI agriculture columnist Karen Braun.
CPI, banks and Nvidia, oh my!
The artificial intelligence bellwether, already up more than 20% for the year and the first company to top a $4 trillion valuation, rose another 4% out of hours overnight after it said it plans to resume sales of the H2O AI chips to mainland China just days after its CEO met U.S. President Donald Trump.
“The U.S. government has assured Nvidia that licenses will be granted, and Nvidia hopes to start deliveries soon,” said the company, whose chief executive, Jensen Huang, is in Beijing.
The move is controversial in the geopolitical context and the White House, which has previously expressed concern that the Chinese military could use AI chips to develop weapons, did not respond to a request for comment.
After Wall Street stock indexes ended in positive territory on Monday, stock futures were higher again first thing today.
Earlier, Chinese stocks eked out modest gains after economic updates showed GDP growth there slowed down by less than expected in the second quarter despite the global tariff turmoil – registering a 5.2% year-on-year expansion of the economy.
June numbers were more of a mixed bag, with an acceleration of Chinese industrial production offset by a miss in retail sales growth and another monthly decline in house prices.
The yuan was largely unmoved by the sweep of data.
Part of the stasis is due to the day’s big releases stateside.
The June update on U.S. consumer prices is clearly critical to Federal Reserve thinking on whether tariff rises are aggravating the inflation picture enough to keep interest rates on hold – despite an almost daily insistence by Trump that rates should be cut by more than 3 percentage points.
Trump once again on Monday said Fed rates – now held in a 4.25-4.50% range – should be 1% or less. Adding a new line of pressure on the central bank, White House officials stepped up pressure on Chair Jerome Powell over what they claim were serious cost overruns in the bank’s renovation of its headquarters.
The CPI release is expected to show the core annual inflation rate picking up pace last month to 3.0% – well above the Fed’s 2% target.
Edgy U.S. Treasury yields slipped back a touch ahead of the report, with 30-year bond yields retreating from the 5% mark. The dollar index also slipped back slightly.
Japanese debt concerns alarmed in the background, however. The 30-year JGB yield jumped to a record 3.20%, while 20-year yields soared to their highest since November 1999 at 2.65% and 10-year yields scaled the highest since October 2008. Investors in Japanese bonds are bracing for a potential power shift in upper house elections this weekend that could strain the country’s already frail finances.
Before we see the U.S. inflation update today, the U.S. second-quarter earnings season kicks into gear with the big U.S. banks reporting – likely flattered by the burst of financial market trading revenues during the turbulent three months despite still subdued investment banking activity.
Elsewhere, crude oil prices fell back further after Trump’s lengthy 50-day deadline for Russia to end the Ukraine war and avoid sanctions eased immediate supply concerns. Oil prices had climbed in anticipation of sanctions both on Russia and countries buying oil from Moscow, but gave up gains as traders doubted the U.S. would actually impose steep tariffs on third countries.
European stocks pushed higher, meantime, even after the weekend’s 30% U.S. tariff threat on imports from the region.
Aircraft, machinery, cars, chemicals and medical devices are the leading big-ticket items on the latest list of U.S. goods the European Commission has proposed to impose tariffs on if talks with Washington do not yield an agreement on trade.
But European ministers meeting in Brussels on Monday remained convinced they can bring Trump back from the brink before his Aug. 1 deadline and reach a deal that would keep the $1.7 trillion two-way trading relationship broadly intact.
And German investor morale rose more than expected this month, the ZEW institute said, reporting an increase in its sentiment index to 52.7 points from 47.5 points in June.
In Britain, set piece speeches from finance minister Rachel Reeves and Bank of England boss Andrew Bailey are awaited later.
Reeves announced a push on Tuesday to get more savers to invest in company shares as part of a wide-ranging set of initiatives to boost Britain’s financial services sector. Britain’s blue chip FTSE 100 briefly topped 9,000 points for the first time earlier and the pound steadied.
Bitcoin recoiled back below $120,000 on Tuesday after a roaring start to the week saw it hit a new record of $123,153 the day earlier.
Chart of the day
Major U.S. banks are expected to report stronger profits later on Tuesday, driven by buoyant trading and a modest rebound in hobbled investment banking activity. JPMorgan Chase, Citigroup and Wells Fargo kick off second-quarter earnings on Tuesday with a focus on their outlooks at a time when economic uncertainty over U.S. tariff policies remains high. While there has been some stirring in investment banking in the second quarter, global banks, including top U.S. lenders, are expected to report a 10% gain in markets revenue due to the volatility around shifting U.S. tariff policies. Citigroup’s stock leads the pack after a rollercoaster start to 2025.
Today’s events to watch
* U.S. June consumer price report (8:30 AM EDT); Canada June consumer prices (8:30 AM EDT)
* U.S. corporate earnings: BlackRock, JPMorgan, Citigroup, Bank of New York Mellon, Wells Fargo, State Street, Omnicom, JBHunt
* Federal Reserve Vice Chair for Supervision Michelle Bowman, Fed Board Governor Michael Barr, Dallas Fed President Lorie Logan, Boston Fed President Susan Collins and Richmond President Thomas Barkin all speak
* Bank of England Governor Andrew Bailey and finance minister Rachel Reeves address City of London at annual Mansion House dinner
Opinions expressed are those of the author. They do not reflect the views of Reuters News, which, under the Trust Principles, is committed to integrity, independence, and freedom from bias.
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(by Mike Dolan; editing by Hugh Lawson.)
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