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Luke Kawa

US equity futures sink on twin shocks from tariffs and tech

S&P 500 futures are down 1% as of 7:40 a.m. ET, reeling from twin shocks on tariffs and tech.

On Thursday evening, via an executive order, President Donald Trump announced 10% minimum global tariffs, a 15% levy on imports from countries that run trade surpluses with the US, and a 40% tax on goods transshipped in an attempt to duck other tariffs, due to take effect on August 7. There were also a host of hikes to tariff rates on countries that had not struck new deals with the US after the initial Rose Garden tariffs were delayed.

At their lows in premarket trading, the SPDR S&P 500 ETF and Invesco QQQ Trust were down 1.1% and 1.3%, respectively.

As we’ve noted, Trump Always Raises Tariffs (TART) is a more reliable characteristic of the 45th and 47th president’s time in office than the notion that Trump Always Chickens Out (TACO). The US effective tariff rate is poised to go up even more absent any new deals or delays. Bloomberg Economics estimates that these measures will propel the average US tariff rate north of 15%.

Meanwhile, Amazon slumped after delivering an underwhelming outlook for operating profits and some disappointing commentary during its conference call, sending shares as much as 8% lower. When a trillion-dollar company nosedives that much, it’ll usually leave a mark on major indexes.

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J. Edward Moreno

Arm says its in-house AI chip will generate billions in revenue

British semiconductor firm Arm rose more than 13% in premarket trading after it announced Tuesday evening that it would create a new AI chip in partnership with Meta, which its CEO says should lead to a boom in sales.

Speaking at an event in San Francisco, Arm CEO Rene Haas said the new chip alone is expected to generate $15 billion in annual revenue by 2031. Meanwhile, he said that the company expects intellectual property sales, currently its main revenue driver, to hit $10 billion by then.

In total, Arm projects it will hit $25 billion in annual sales in five years, compared to the $4.9 billion analysts expect it to report for its current fiscal year, which ends this month. It also expects to report $9 in earnings per share by then, compared to the $1.75 Wall Street is penciling in for FY2026.

Meta and Arm team up to build a new class of data center chips

Speaking at an event in San Francisco, Arm CEO Rene Haas said the new chip alone is expected to generate $15 billion in annual revenue by 2031. Meanwhile, he said that the company expects intellectual property sales, currently its main revenue driver, to hit $10 billion by then.

In total, Arm projects it will hit $25 billion in annual sales in five years, compared to the $4.9 billion analysts expect it to report for its current fiscal year, which ends this month. It also expects to report $9 in earnings per share by then, compared to the $1.75 Wall Street is penciling in for FY2026.

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Retail traders sold more stocks than they bought for the first time since 2023

Monday was the first day since November 2023 where retail investors flipped to selling.

J. Edward Moreno2h
markets
Nate Becker & Matt Phillips

Oil drops, yields fall, and stocks rise on reports the US has sent Iran a plan to end war

Oil, stock, and bond markets flipped their positions yesterday and continued into premarket trading Wednesday, as investors digest the latest reports on a potential wind-down of the war in Iran, with The New York Times reporting that the US has sent Iran a 15-point plan to end the conflict.

While the details of the proposal remain unclear, it reportedly includes US demands from prior nuclear talks in Geneva and has been shared with Israel — though Israeli officials remain skeptical that Iran will agree to all conditions, according to Axios.

At the time of writing, international benchmark Brent crude futures are down around 4% to ~$100 a barrel, while US benchmark West Texas Intermediate futures have also sunk roughly to $88 a barrel. Yields on two-year and 10-year Treasurys continued their overnight declines and the SPDR S&P 500 ETF extended its after-hours rally into premarket trading.

Global markets have breathed a sigh of relief, with the broader STOXX Europe 600 up 1.3% and all sectors (besides oil and gas stocks) in the green. Asia-Pacific markets closed higher Wednesday, with Japan’s Nikkei 225 and South Korea’s KOSPI gaining 2.9% and 1.6%, respectively. S&P 500 futures rose 0.84% and Nasdaq 100 futures gained 1%.

Spot gold and silver both jumped roughly 1.8% as the decline in oil prices eased inflation fears.

From the Times’ report yesterday:

“The United States has sent Iran a 15-point plan to end the war in the Middle East, according to two officials briefed on the diplomacy, reflecting the Trump administration’s eagerness to find an offramp from the conflict as it grapples with its economic fallout.

It was unclear how widely the plan, delivered by way of Pakistan, had been shared among Iranian officials and whether Iran was likely to accept it as a basis for negotiations. Nor was it clear whether Israel, which has been bombing Iran together with the United States, was on board with the proposal.

But the delivery of the plan showed that the administration was ramping up efforts to conclude a war, now in its fourth week, that has drawn in several other countries.”

Some individual shares had outsized reactions to the news. Gold miners Freeport-McMoRan and Newmont, which have been battered since the war started, are still rising this morning. Ammonia maker CF Industries — which had risen on expectations of rising prices for fertilizer products linked to the closure of the Strait of Hormuz — is going the other way.

US natural gas producers such as APA Corporation, EOG Resources, Devon Energy, and Diamondback Energy declined after-hours on the news.

United States Said to Have Sent Iran a Plan to End the Middle East War

While the details of the proposal remain unclear, it reportedly includes US demands from prior nuclear talks in Geneva and has been shared with Israel — though Israeli officials remain skeptical that Iran will agree to all conditions, according to Axios.

At the time of writing, international benchmark Brent crude futures are down around 4% to ~$100 a barrel, while US benchmark West Texas Intermediate futures have also sunk roughly to $88 a barrel. Yields on two-year and 10-year Treasurys continued their overnight declines and the SPDR S&P 500 ETF extended its after-hours rally into premarket trading.

Global markets have breathed a sigh of relief, with the broader STOXX Europe 600 up 1.3% and all sectors (besides oil and gas stocks) in the green. Asia-Pacific markets closed higher Wednesday, with Japan’s Nikkei 225 and South Korea’s KOSPI gaining 2.9% and 1.6%, respectively. S&P 500 futures rose 0.84% and Nasdaq 100 futures gained 1%.

Spot gold and silver both jumped roughly 1.8% as the decline in oil prices eased inflation fears.

From the Times’ report yesterday:

“The United States has sent Iran a 15-point plan to end the war in the Middle East, according to two officials briefed on the diplomacy, reflecting the Trump administration’s eagerness to find an offramp from the conflict as it grapples with its economic fallout.

It was unclear how widely the plan, delivered by way of Pakistan, had been shared among Iranian officials and whether Iran was likely to accept it as a basis for negotiations. Nor was it clear whether Israel, which has been bombing Iran together with the United States, was on board with the proposal.

But the delivery of the plan showed that the administration was ramping up efforts to conclude a war, now in its fourth week, that has drawn in several other countries.”

Some individual shares had outsized reactions to the news. Gold miners Freeport-McMoRan and Newmont, which have been battered since the war started, are still rising this morning. Ammonia maker CF Industries — which had risen on expectations of rising prices for fertilizer products linked to the closure of the Strait of Hormuz — is going the other way.

US natural gas producers such as APA Corporation, EOG Resources, Devon Energy, and Diamondback Energy declined after-hours on the news.

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GameStop seesaws on Q4 results

The video game and collectibles retailer just reported Q4 results.

Luke Kawa, Max Knoblauch17h
Tasha Matsumoto
17h
Stocks close lower after fluctuating as traders digest war updates

Stocks pared steeper losses on hopes of US-Iran talks, but were unable to maintain gains on reports that the US is deploying 3,000 troops to the Middle East.

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