Trump announces 100% chip tariff as Apple ups U.S. investment
Investing.com-- The Nasdaq closed at record highs Wednesday, shrugging off President Donald Trump’s latest tariff blitz as Nvidia rallied to top $4T in value for the first time, pushing the broader tech sector higher.
At 4:00 pm ET (20:00 GMT), the NASDAQ Composite 100 Futures}} climbed 0.95% to a closing record of 20,611.34, the Dow Jones Industrial Average gained 217 points, or 0.5%, and the S&P 500 index rose 0.6%.
Nvidia jumps to reach $4T in market cap
NVIDIA Corporation (NASDAQ:NVDA) rose 2%, taking its market cap above $4 trillion and led the broader tech sector as investors continue to bet on chipmaker’s AI-led chip dominance.
"This is a historical moment for Nvidia, the tech space flexing its muscles, and speaks to the AI Revolution hitting its next stage of growth led by the one chip fueling AI...Nvidia," Wedbush said in a Wednesday note.
Other tech names incluing Meta Platforms Inc (NASDAQ:META) were also higher.
Fed minutes signal cuts still on table for this year, but divisions on next steps appear
The majority of Federal Reserve policymakers continued to believe that the central bank will cut rates this year, though divisions are starting to form on the monetary policy path ahead, with a couple of members eyeing cuts as soon as July, while some see no need for any easing this year, according to the minutes of the Federal Reserve’s Jun. 17-18 meeting released Wednesday.
The Fed’s patient approach has irked Trump, who has directed his frustrations publicly at Fed Chair Jerome Powell, repeatedly calling for lower interest rates and for the Fed chief to resign. The president on Tuesday touted a study by the Council of Economic Advisers which claimed that his tariffs had not pushed up inflation so far.
The Wall Street Journal reported Tuesday that White House economic adviser Kevin Hassett is emerging as a “serious contender” to replace Powell as the next Fed Chair.
Hassett is one of Trump’s closest economic advisers, and is now seen as a preferred pick over earlier favorite Kevin Warsh, a former Fed governor, the WSJ reported.
Trump targets copper for tariffs
The main Wall Street averages had started the week on the back foot after U.S. President Donald Trump sent letters to several major economies outlining trade tariffs against them, while also postponing the effective date of his tariffs to August 1 from July 9.
He insisted at a cabinet meeting on Tuesday that the new deadline will not be pushed back any further, after stating earlier this week that it was “not 100% firm.” He added that negotiations are going well with the European Union and China, but flagged that the EU is days away from receiving its own tariff letter.
The European Union is working toward a trade agreement with the United States but faces challenges in securing immediate tariff relief and protection against new trade measures, according to Bernd Lange, head of the European Parliament’s trade committee earlier Wednesday.
The president also raised the prospect of a 50% tariff on imported copper, in the latest sign that his aggressive trade agenda involves not just countries, but specific sectors as well. Copper is a particularly crucial metal who uses apply to vehicle production, military hardware, power grid infrastructure and more.
Other levies on everything from pharmaceuticals to semiconductors could soon be unveiled, Trump suggested.
Meanwhile, Treasury Secretary Scott Bessent claimed that Trump’s levies have raked in $100 billion in income for the U.S. this year and predicted that the number could climb to $300 billion by the end of December. Bessent flagged that the major collections began in the second quarter, when Trump instituted a baseline 10% duty and lifted tariffs on items like steel, aluminum and autos.
Limited equities upside near term - Goldman
Goldman Sachs strategists see limited upside for equities in the near term, citing elevated valuations and a deteriorating macroeconomic backdrop that could increase the risk of a market drawdown.
The team, led by Christian Mueller-Glissmann, remains neutral on equities over a three-month horizon but maintains an overweight stance for the 12-month view, supported by “structural growth drivers, fiscal and monetary easing, restructuring and high shareholder returns.”
They argue that “equity valuations often tend to overshoot” in late-cycle environments, particularly with negative inflation momentum outside the U.S.
But for the near-term, the strategists caution that “the probability of an equity drawdown is now larger than that of a large rally.”
Ambar Warrick contributed to this article