Stock trade in United States potentially heads upward in initial market hours
In a move aimed at reshoring semiconductor manufacturing to the U.S., President Trump announced plans to impose steep tariffs on semiconductor and chip imports, potentially ranging from 100% to as high as 300%. These tariffs, which target major Asian suppliers such as TSMC and Samsung, are part of a Section 232 national security investigation focused on semiconductor imports and their impact on the domestic supply chain.
The tariffs, which will start at lower rates to give companies time to increase domestic production, are designed to pressure firms into building manufacturing capacity in the United States. Companies like Intel are seeking government support, such as equity funding, to develop advanced chip nodes domestically, while AI hardware companies such as NVIDIA and AMD are working with the government to obtain export licenses and mitigate tariff impacts.
For U.S. markets and companies, these tariffs pose risks of inflation spikes in electronics and AI hardware costs due to increased import duties. They create uncertainty in supply chains and may slow investment as companies navigate a "will he or won't he" environment regarding the implementation and extent of tariffs.
Apple, which has publicly committed to a $100 billion investment in the U.S., may benefit from tariff exemptions if it produces domestically. Intel is positioning itself to benefit by pursuing government equity and focusing on domestic chip development, potentially gaining from the reshoring push and subsidies like those from the CHIPS Act.
However, the strategy disrupts global trade, introducing risks and complexities for multinational chipmakers and downstream tech companies reliant on global semiconductor supply chains. For instance, Seoul stocks ended lower due to expectations of a U.S.-Russia summit next week that may bring an end to the Russia-Ukraine war.
In other news, crude oil futures are rising, while gold futures are jumping. Stocks moved higher early in the session but gave back ground over the course of the trading day, ending the day mixed. Automakers Nissan, Mitsubishi Motors, Honda, and Toyota surged 3-4 percent, while SoftBank Group shares soared 10.4 percent in Japan. SoftBank's strong profits and growing investments in AI boosted sentiment in Japan, with the Nikkei 225 Index jumping 1.9 percent.
In economic news, France's unemployment rate held steady at 7.5 percent in the second quarter, with the number of unemployed increasing by 29,000 compared to the March quarter. St. Louis Federal Reserve President Alberto Musalem is scheduled to speak before a Mississippi Delta event on August 12.
[1] New Zealand's benchmark S&P/NZX-50 Index slipped 0.3 percent due to concerns over the impact of the newly imposed U.S. tariffs on the domestic economy. [2] Japanese shares bucked the regional trend due to the country's chief trade negotiator announcing the U.S. agreed to end so-called stacking on universal tariffs and cut car levies. [3] German property firm Deutsche Wohnen moved higher after posting a narrower first-half loss. [4] Australian markets ended modestly lower after two record-setting sessions, with banks and energy stocks leading losses ahead of the Reserve Bank of Australia's meeting on August 12. [5] Dutch insurer and asset manager NN Group jumped as first-half earnings beat market expectations. [6] Asian stocks ended mostly lower on Friday due to U.S. President Donald Trump's reciprocal tariffs. [7] European stocks were mixed, with the French CAC 40 Index up 0.1 percent, while the German DAX Index and the U.K.'s FTSE 100 Index were both down 0.1 percent. [8] U.S. President Trump announced that billions of dollars would soon start flowing into the United States, unless blocked by a "radical left court" determined to see America fail. [9] The U.S. dollar is trading at 147.71 yen and $1.1647 against the euro. [10] President Donald Trump announced a 100% tariff on imports of semiconductors and chips, but companies building in the U.S. will be exempt. [11] The Kospi dropped 0.6 percent in Seoul, with Hyundai Rotem giving up 4.9 percent, Hanwha Aerospace Industries losing 5.5 percent, and LIG Nex1 plummeting 14.9 percent. [12] Reinsurer Munich Re plunged after cutting its 2025 insurance revenue forecast. [13] British drug major GSK moved to the upside on news it will receive $370 million as part of a U.S. patent settlement. [14] Apple CEO Tim Cook confirmed the company plans to invest another $100 billion in the U.S., causing shares of Apple to jump by 3.2%. [15] The U.S. markets are expected to open modestly higher on Friday. [16] The tech-heavy Nasdaq added to Wednesday's strong gain, while the S&P 500 edged down and the Dow fell. [17] Labor productivity in the second quarter showed a significant rebound. [18] China's Shanghai Composite Index edged down 0.1 percent, and Hong Kong's Hang Seng Index fell 0.9 percent, due to Trump's demand for the resignation of new Intel CEO Lip-Bu Tan. [19] First-time claims for U.S. unemployment benefits rose by more than expected in the week ended August 2nd. [20] The trading activity may be subdued due to a lack of major U.S. economic data.
[1] The newly imposed U.S. tariffs could have an impact on New Zealand's economy, causing concern for investors as reflected in the decline of the S&P/NZX-50 Index. [2] The U.S. agreed to end so-called stacking on universal tariffs and cut car levies, creating optimism for Japanese shares and bonuses in the regional trend.
