Gold prices buoyed by tariff fears; US duties on 1-kilo bars spur supply concerns
Investing.com - U.S. stock futures gained strongly Tuesday as U.S. President Donald Trump postponed the imposition of tariffs on EU imports, potentially leaving room for negotiations to avoid a costly trade war. Elsewhere, Nvidia is working on a new chip for the Chinese market, Tesla’s sales slumped in Europe in April and bitcoin slipped from record highs ahead of a key conference.
1. U.S. futures surge on EU tariffs postponement
U.S. stock futures surged Tuesday, responding to the news that President Trump has agreed to postpone imposing tariffs on imports from the European Union, raising hope that a potentially costly trade battle can be averted.
At 03:10 ET (07:10 GMT), the S&P 500 futures traded 70 points, or 1.2%, higher Nasdaq 100 futures gained 290 points, or 1.4%, and Dow futures rose 435 points, or 1.1%.
Wall Street was closed on Monday in recognition of Memorial Day, and the major indices all slid more than 2% on Friday after Trump proposed a 50% tariff on EU imports starting June 1, citing ongoing frustrations with trade negotiations.
However, by Sunday, Trump indicated a shift in stance, stating that he had agreed to postpone the tariffs until July 9 after a conversation with European Commission President Ursula von der Leyen.
Von der Leyen, in a post on X, expressed optimism, stating that the EU is prepared to move forward with negotiations “swiftly and decisively.”
The U.S. president’s latest U-turn on EU tariffs reinforces how unpredictable his trade policies can be and undermines already fragile investor confidence in the U.S. economy.
With this in mind, investors are likely Tuesday to carefully study commentary from Minneapolis Federal Reserve President Neel Kashkari and New York Fed President John Williams, adding to a series of comments from their colleagues last week.
“A number of Fed speakers took to the airwaves. The message is tariffs are likely to create risks on both sides of the Fed’s mandate. The right response is to wait,” Morgan Stanley (NYSE:MS) analysts wrote, summing up the consensus ahead of the June FOMC meeting.
2. Nvidia plans to launch new AI chip in China - Reuters
Nvidia (NASDAQ:NVDA) plans to launch, potentially as early as June, a new artificial intelligence chip in China at a lower price than its recently restricted H20 chip, according to a report from Reuters.
The proposed chip will have weaker specifications and simpler manufacturing requirements, and will use conventional GDDR7 memory instead of the high bandwidth memory used by more advanced AI chips.
The push for a new China chip comes as Nvidia struggles against new U.S. export restrictions to remain competitive in the Chinese market.
Nvidia has been steadily losing market share in China since 2022, dropping to 50% from 95%, but CEO Jensen Huang recently said China remained a valuable market for Nvidia, and could balloon to a $50 billion sales market in the coming years.
Nvidia faces stiff competition from China’s Huawei, which has made steady advancements in its AI chip development capabilities in recent years.
3. Tesla sales continue to plunge in Europe
Electric vehicle market leader Tesla’s (NASDAQ:TSLA) sales in Europe continued to slump last month, dropping by nearly a half from last year, government data showed earlier Tuesday.
Tesla’s new car registrations in the European Union, the European Free Trade Association, and the U.K., slid 49% year-on-year to 7,261 units in April from 14,228 units a year ago, data from the European Automobile Manufacturers’ Association showed.
Tesla’s market share also nearly halved to 0.7% from 1.3% a year ago.
The drop came even as overall battery EV sales continued to expand in Europe, growing 34.1% year-on-year to 145,341 new registrations in April.
Overall European new car registrations shrank marginally to 1.07 million units from 1.08 million units.
Tesla is struggling with increased competition for an aging lineup from several established European automakers, who have also begun offering their own EVs. Chinese EV exports to Europe have also picked up in recent months, despite increased import tariffs on the sector.
A persistent decline in European sales also indicated that a Tesla boycott, centered around CEO Elon Musk and his political affiliations, showed little signs of easing in the region.
4. Bitcoin slips from highs ahead of key conference
Bitcoin slipped Tuesday from last week’s record high, as investors turned their focus to the start of the major 2025 Bitcoin conference in Las Vegas later in the session.
At 03:10 ET, the world’s largest cryptocurrency fell 0.9% to $109,050.
The token surged to a record high of nearly $112,000 on Thursday last week, amid regulatory cheer and optimism over increased institutional adoption.
Markets now await the Bitcoin 2025 Conference, beginning later Tuesday at the Venetian Expo in Las Vegas.
This year’s edition is expected to be the largest to date, drawing over 30,000 attendees, featuring more than 400 speakers, and involving 5,000 participating companies.
5. Crude stable ahead of OPEC+ meeting
Oil prices steadied Tuesday, as investors stayed on the sidelines ahead of a closely watched OPEC+ meeting that could provide key signals on future supply levels.
At 03:10 ET, Brent futures dropped 0.1% to $64.08 a barrel, and U.S. West Texas Intermediate crude futures fell 0.1% to $61.47 a barrel.
The Organization of Petroleum Exporting Countries and allies, collectively known as OPEC+, are weighing the possibility of another production boost at their upcoming meeting later this week, Bloomberg News reported last week.
According to reports, one option under consideration is a supply increase of 411,000 barrels per day in July, though no final decision has been made.
OPEC+ has been in the process of unwinding output cuts, announcing additions to the market in May and June.
(Reuters contributed reporting.)