Trump threatens China, hits Fed 26/08/2025

HOT stories for today

US market wrap:

• Wall Street ended Monday in the red as investors took profits after Friday’s sharp rally. The Dow Jones Industrial Average lost 349 points, or 0.8%, while both the S&P 500 and Nasdaq also eased, the latter giving back early strength from Nvidia’s brief post-Powell boost. With earnings season wrapping up, attention is shifting to guidance from key figures: Fed Chair Jerome Powell, President Trump on trade, and Nvidia CEO Jensen Huang.
• Most stocks in the S&P 500 weakened, though energy and communications managed to post gains. Technology, by contrast, bore the brunt of the selling, with Bloomberg TV describing the moves as “angry” in tone. After the close, President Trump removed Federal Reserve Governor Lisa Cook from the central bank’s board, a rare and unprecedented action that further underscores his pressure on Fed independence.
   

Trump threatens China, hits Fed

• U.S. President Donald Trump on Monday threatened 200% tariffs on China if Beijing curbs exports of rare-earth magnets, warning after a White House meeting with South Korean President Lee Jae Myung that airplane parts give Washington leverage in the dispute. China, which dominates global magnet production, recently boosted shipments to the U.S., with exports jumping 660% in June and another 76% in July. 
• Henry Wang of the Center for China & Globalization dismissed Trump’s comments as “bluffing,” saying focus should remain on implementing trade commitments. The temporary U.S.-China tariff truce expires in mid-November, with Chinese negotiator Li Chenggang set to visit Washington this week for further talks.

Stocks on the move:

• Vital Energy (VTLE): Shares soared 13% after the company agreed to be acquired by Crescent Energy in a $3.1 billion transaction, slated to wrap up by year-end.
• MP Materials (MP): The rare-earth miner advanced nearly 7%. While no clear trigger emerged, the rally followed comments from President Donald Trump signaling more government partnerships akin to Intel’s recent deal. The Pentagon became MP’s largest shareholder last month.
• Apple (AAPL): The iPhone maker edged higher despite lawsuits from Elon Musk’s firms X and xAI, which accused Apple and OpenAI of pursuing an “anticompetitive scheme” to stifle AI rivals.
• Intel (INTC): The chipmaker added over 1%, extending gains after confirmation that Washington has taken a 10% equity stake.

Watchlist: NVDA, AAPL, RDDT, RBLX, IBKR, BMO, OKTA, NVDA

Today’s action

• Asia-Pacific equities mostly slipped on Tuesday as investors weighed U.S. President Donald Trump’s tariff threats and his removal of Federal Reserve Governor Lisa Cook. Japan’s Nikkei 225 fell 0.85%, while Hong Kong’s Hang Seng eased 0.22%.
•  U.S. stock futures also pointed lower, extending the week’s early weakness. Dow Jones Industrial Average futures dropped 64 points, or 0.14%, while S&P 500 and Nasdaq 100 futures were down 0.14% and 0.22%, respectively. The ICE U.S. Dollar Index, which tracks the greenback against major peers, slid 0.3% in a sharp overnight move after Trump posted the news on Truth Social. A busy slate of economic data is on deck Tuesday morning, including durable goods orders, consumer confidence, the Case-Shiller Home Price Index, and the Richmond Fed Manufacturing Index. Richmond Fed President Thomas Barkin is also scheduled to speak.
   

Bitcoin

• Bitcoin tumbled below $110,000 in a sharp overnight sell-off, erasing gains from Fed Chair Jerome Powell’s rate-cut hints and triggering nearly $940 million in crypto liquidations. Analysts tied the drop to a whale unloading about 24,000 BTC, while thin liquidity and profit-taking added pressure.
• Despite the setback, institutional demand remains strong: Strategy Inc. (formerly MicroStrategy) bought another 3,081 BTC, lifting its holdings to over 632,000 coins. Meanwhile, a growing wave of crypto treasury firms is fueling concerns of a looming supply squeeze, with less than 15% of Bitcoin now available on exchanges.
  Watchlist: Bitcoin: 99 000-125 000, Ethereum: 4000-4980, Solana: 160-214

Forex

• USD/JPY slipped to around 147.30 in Asian trading on Tuesday, giving back the prior session’s gains as the dollar weakened amid renewed concerns over Federal Reserve independence. The move followed President Donald Trump’s threat to remove Fed Governor Lisa Cook, alongside warnings of additional tariffs and export controls tied to digital services taxes. Political risk in Japan remained in focus, though public support for Prime Minister Ishiba has risen despite his coalition’s July election setback.
• EUR/USD held near 1.1630 after climbing more than 0.75% the day before. The euro drew support from the European Central Bank’s signal of a pause in monetary easing, while the dollar’s rebound was capped as Governor Cook reaffirmed she will not resign despite Trump’s threats.
  Watchlist: EUR/USD: 1.0700-1.1700, USD/JPY: 140-151

Basic Materials

• WTI Crude climbed toward $64.60 in early Asian trading Tuesday, extending its rally as stalled Russia-Ukraine peace talks reignited supply concerns. Hopes of forthcoming U.S. rate cuts also lent support, while traders await the American Petroleum Institute’s weekly inventory report due later in the day.
• Gold (XAU/USD) advanced to a two-week high near $3,385 in early European hours, underpinned by worries over Federal Reserve independence after President Trump’s move to oust Governor Lisa Cook. Expectations of renewed Fed rate cuts further buoyed the precious metal, with upcoming U.S. data on consumer confidence and durable goods orders in focus.
  Watchlist: GOLD: 2600-3500, US Oil: 55.60-75.80

Key Economic Events Today:

EST time

08:30 am: USD FCore Durable Goods Orders
08:30 am: USD FOMC Member Barkin Speaks
10:00 am: USD Consumer Confidence
10:00 am: USD Richmond Manufacturing Index

Earnings

BMO (Before the US Market opens):

BMO                        Bank of Montreal
BNS                         Bank of Nova Scotia
BEKE                       KE Holdings Inc.

AMC (After the US Market closes): MDB, OKTA, BOX, PVH

 

The TEFS Analyst team wishes you a successful day!