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This article discusses a significant development for Nvidia (NVDA) and AMD, as President Trump announced that the US government will take 15% of their sales revenue from China, a deal negotiated down from 20% by Nvidia CEO Jensen Huang. Despite China discouraging the use of Nvidia chips, demand remains strong, though local competitors are gaining ground. Access to China is vital for Nvidia's long-term strategy, given its entrenched CUDA software ecosystem, which discourages developers from switching to rivals. However, US restrictions on chip capabilities could push Chinese developers toward local alternatives like Huawei, raising national security concerns if the US market is excluded. Financially, Nvidia faces an $8 billion Q2 earnings hit from prior H20 chip bans, with the new 15% fee likely to be passed to customers and not reflected until Q3 or Q4. Trump is also considering allowing a downgraded Blackwell chip for China, potentially boosting future revenue. Analysts highlight Nvidia's ecosystem advantage but warn of risks if US policies hinder scalability, potentially splitting the global AI market between US and Chinese firms.
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When the Federal Reserve cut interest rates last fall, mortgage rates unexpectedly increased, and a similar pattern might emerge with anticipated cuts in September. Currently at 6.58%, the lowest since October 2024, mortgage rates already reflect market expectations of Fed actions, as per CME FedWatch’s 85% probability of a cut. Unlike debt tied to the prime rate, mortgage rates are driven by 10-year Treasury yields and other market factors like inflation expectations and bond demand, making their response to Fed moves indirect and unpredictable. Upcoming economic data on hiring and inflation could cause rate swings before the Fed’s September 16-17 meeting. Mortgage professionals express frustration as clients delay decisions, hoping for further drops, often missing out on savings. Experts like Chen Zhao from Redfin warn that waiting might be futile amid expected volatility, while loan officers advise focusing on affordability rather than timing the market. With rates having peaked over 7% in May, buyers now have more purchasing power, yet the unpredictability of rates remains a key challenge, as highlighted by industry voices who stress there’s no “crystal ball” for forecasting rate movements.
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This Yahoo Finance Morning Brief article by Hamza Shaban discusses the current state of the US economy amidst mixed signals from recent data. Inflation shows modest consumer pressures but higher producer costs, while labor data indicates low firings yet minimal hiring. July retail sales grew for two consecutive months, though slightly below expectations, reflecting consumer recovery after a spring spending drop. Despite a slowing economy, there’s resilience, with sentiment and sales stabilizing post earlier tariff fears. However, July jobs numbers disappointed with fewer additions and a rising unemployment rate, worsened by past revisions. Inflation’s mixed signals haven’t deterred expectations of Federal Reserve rate cuts this fall. Consumer sentiment soured in August over inflation fears, though not to earlier crisis levels. Economists warn of future challenges from tariffs, predicting a drag on demand as costs eventually reach consumers. Meanwhile, markets remain optimistic, focusing on rate cuts and downplaying tariff impacts, with major indices like the S&P 500 and Nasdaq hitting records, and the Dow nearing one. The article underscores a twitchy yet leveling economy, navigating shocks and recoveries in an orderly fashion, though regular maintenance via policy adjustments is needed.
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US President Donald Trump met with Russian President Vladimir Putin in Anchorage, Alaska, on August 15, for a highly anticipated summit aimed at addressing Russia’s war in Ukraine. Trump described the discussions as "extremely productive," though no concrete agreement was finalized. In a subsequent Fox News interview, he highlighted unresolved "significant items" but remained optimistic about reaching a deal, placing pressure on Ukrainian President Volodymyr Zelenskiy to resolve the conflict and urging European involvement. Despite the extended face-to-face meeting—the longest between the two leaders—both refrained from sharing specifics, raising concerns in European capitals and Kyiv about potential agreements sidelining their input. Trump also expressed interest in mediating a future meeting between Putin and Zelenskiy to save lives. Meanwhile, critics and analysts noted a lack of substance in the summit’s outcomes, with some suggesting Putin gained an advantage by securing a meeting on US soil without concessions like a ceasefire. European allies remain anxious about territorial deals without Kyiv’s consent, while Putin aims to reset US-Russia relations and seek sanctions relief amid domestic economic challenges.
