Trading in the US on Monday started near record levels, but cautiously: investors expect a busy week ahead, centered around geopolitical negotiations and key economic publications.
According to the Financial Times, Nvidia and AMD have reached a preliminary agreement with the US government to transfer 15% of revenue from chip sales to China in exchange for export licenses. The news prompted a reaction in the sector: Nvidia shares fell by 0.9%, AMD by 1.6%. This move reflects the increasing role of political factors in high-tech product trade and may set a precedent in export regulation.
An important event of the week will be the publication of the July Consumer Price Index. It is projected that the month-on-month growth will be 0.2% after 0.3% in June, while the year-on-year figure may accelerate for the third consecutive month — to 2.8%. A rise in core CPI to 0.3% month-on-month is also expected. Despite signs of sustained inflationary pressure, markets are pricing in two cuts to the Fed's key rate of 25 basis points each by the end of the year, the first of which, according to futures market estimates, could occur as early as September.
There is a moderate decline in Treasury yields: 10-year US Treasuries fell to 4.28% after last week's weekly high. Investors continue to monitor data on PPI, retail sales, and industrial production, which may clarify the economic picture.
The key foreign policy factor remains the negotiations between the US and China. An extension of the negotiation period by another 90 days is expected to continue the dialogue.
In the currency market, the dollar index fluctuated in the range of 98–98.4 points, recovering after a decline at the end of last week. The currency reacts to expectations regarding inflation and the Fed's monetary policy, as well as news from trade negotiations and international meetings.
Among corporate movements — a correction in a number of tech giants after strong weekly gains: Apple fell by 1.4%, Microsoft by 0.1%, Amazon by 0.3%, Alphabet by 0.7%. At the same time, Tesla rose by 3.2%, updating a six-week high, while Micron gained over 5% amid an upgraded revenue forecast.
Note: key macroeconomic publications of the week
Tuesday, August 12 — CPI (Consumer Price Index): a key indicator of inflationary pressure in the economy. It influences expectations regarding the Fed's policy, especially when actual data deviates from forecasts.
Thursday, August 14 — PPI (Producer Price Index): shows price dynamics at the wholesale level. Often serves as a leading indicator for CPI.
Thursday, August 14 — Retail sales: reflect the state of consumer demand, which accounts for about two-thirds of US GDP.
Friday, August 15 — Industrial production: characterizes activity in the manufacturing sector and energy; an important indicator for assessing cyclical trends.