Trump’s China U-Turn Is a Win for Nvidia. Why Markets Must Be Wary.

Nvidia CEO Jensen Huang (THIBAUD MORITZ/AFP via Getty Images)

No matter the trigger for President Donald Trump’s U-turn on the sale of AI chips to China, Nvidia is sitting pretty. What’s unclear is whether this is down to CEO Jensen Huang’s persuasive skills, or the result of broader trade wranglings between Washington and Beijing.

Nvidia’s permission to resume H20 chip sales might not be purely the result of Huang’s meeting with Trump. Access to American technology was a key demand from Beijing in exchange for loosening restrictions on rare-earth exports. It adds to a de-escalation of tensions between the U.S. and China, with positive noises from the administration about a potential summit between Trump and Chinese leader Xi Jinping later this year.

Why the turnaround? Part of the answer is in China’s continued economic strength, with data released Tuesday that show gross domestic product expanded 5.2% in the second quarter of the year. Its exports boomed, showing that even the might of the U.S. and its tariff threats have not derailed the Chinese economy yet.

There are conflicting goals for tariffs because they are designed to both raise revenue and encourage a shift of manufacturing stateside. But, levies high enough to force reshoring of factories will lead to lower imports and tariff revenue. Trump looks to be settling on a level that brings in revenue to offset government spending but won’t lead to a complete realignment of supply chains—UBS economists forecast an effective U.S. tariff on Chinese goods of between 30% and 40%, far lower than the 145% briefly levied earlier this year.

That’s good news for Nvidia right now. Whether it remains that way will depend on negotiations between Washington and Beijing and the frequent flip-flopping of the U.S. administration. Huang has to hope that as the wider trade game plays out between the two economic superpowers, Nvidia doesn’t become a pawn in negotiations.

—Adam Clark

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Chip Maker to Resume China Exports as U.S. Curbs Lifted

Nvidia effectively got the green light to resume selling its artificial-intelligence H20 semiconductors to Chinese customers, the chip maker said late Monday. The move will come as a relief for investors after CEO Jensen Huang warned of billions of dollars in lost revenue from the U.S. export curbs.

• Nvidia said the U.S. government has assured the company it will approve its license applications to sell the H20 chips to China. It has also developed a new AI chip for the Chinese market for factory automation and logistics.
• “NVIDIA is filing applications to sell the NVIDIA H20 GPU again. The U.S. government has assured NVIDIA that licenses will be granted, and NVIDIA hopes to start deliveries soon,” a company blog post said.
• In April, the administration effectively banned Nvidia from selling H20 chips to China by tightening chip-export licensing requirements to the country.
• Huang has argued that limiting access to Nvidia’s products plays into the hands of its Chinese rival Huawei and risks companies providing financial resources for it to use for R&D to compete with Nvidia.

What’s Next: Meta Platforms announcement that it will invest heavily in new data centers could send Nvidia stock even higher after its recent stellar run that drove it to become the first company worth more than $4 trillion, with investors hopeful that a chunk of the spending will go on buying its AI chips.

— Tae Kim and Elsa Ohlen

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Trump to Announce $70 Billion Investment in AI, Energy

President Donald Trump is expected to announce $70 billion in investments in artificial intelligence and energy today, including new data centers and grid infrastructure upgrades, at the first Pennsylvania Energy and Innovation Summit at Carnegie Mellon University in Pittsburgh.

• AI and energy leaders expected to join him include BlackRock’s Larry Fink, Palantir Technologies’ Alex Karp, Anthropic’s Dario Amodei, Exxon Mobil’s Darren Woods, and Chevron’s Mike Wirth, Bloomberg reported, citing an administration official.
• Blackstone’s President and COO Jon Gray is expected to announce a $25 billion data-center and energy infrastructure project and a joint venture for power generation that will create 6,000 construction jobs and 3,000 permanent jobs, a spokesperson for Sen. Dave McCormick (R, Pa.) told Bloomberg.
• Meanwhile, Meta Platforms will spend about $70 billion on AI data centers this year, almost double last year’s total. CEO Mark Zuckerberg posted on Threads that the company is going to invest “hundreds of billions of dollars into compute to build superintelligence.”
• Zuckerberg, who has reportedly been recruiting top global AI talent with nine-figure offers to join his Superintelligence Labs unit, said on Threads that he’s focused on building “the most elite and talent-dense team in the industry.”

What’s Next: Data centers are expected to account for 8.6% of U.S. electricity demand by 2035, more than double the current 3.5% share, Bloomberg said. To help meet AI’s increased electricity demands, the Trump administration has prioritized expanding coal-fired power, along with natural gas and nuclear power.

— Janet H. Cho and Adam Levine

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Trump Threatens Russian Tariffs If Peace Deal Isn’t Reached

President Donald Trump, meeting with NATO Secretary General Mark Rutte in the Oval Office, threatened steep tariffs on products from Russia, and secondary tariffs on countries trading with Russia, unless there’s a peace deal with Ukraine within 50 days. NATO is buying U.S. weapons for Ukraine in the meantime.

• Ukrainian President Volodymyr Zelensky said he and Trump had a very good conversation, including discussing ways to better protect Ukrainians from Russian attacks and strengthen Ukraine’s positions. “Thank you for the willingness to support Ukraine and to continue working together to stop the killings,” Zelensky wrote.
• Trump’s threatened 100% Russian tariff rate is less than what the Senate’s bipartisan Sanctioning Russia Act is proposing, which would tariff Russian imports to the U.S. up to 500% and impose the same secondary tariffs on countries buying Russian oil, uranium, natural gas, or petroleum.
• China, India, South Korea, and Turkey would be among the U.S. trading partners most affected by those potential additional levies. Minority Leader Hakeem Jeffries said Russian President Vladimir Putin has been “punking Donald Trump” and his administration, and said Congress should impose sanctions on Russia to end the war.
• Maros Sefcovic, the European Union’s top trade negotiator, said he would again speak with his U.S. counterparts, as the bloc seeks to reach a deal with the U.S. after Trump threatened 30% tariffs on imports from the EU and Mexico, starting Aug. 1.

What’s Next: NATO’s Rutte said Ukraine would get massive amounts of military equipment, including missiles, air defense systems and ammunition, and said Germany, Finland, Denmark, Sweden, Norway, and the Netherlands could provide Patriot defense systems in the first wave of donations.

— Anita Hamilton, Adam Clark, and Janet H. Cho

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U.S. Defense Industry Seen Boosted by NATO Weapons Deal

Earnings for the U.S. defense sector are coming, and will land about a week after Monday’s meeting between President Trump and NATO’s Rutte. The administration has criticized NATO for its European member nations falling short of their financial contributions to the group and not spending enough on defense.

• But after new commitments from Europe, Trump seems to feel better about NATO, which has an annual budget of about $5 billion. In late June, NATO countries committed to spending roughly 3.5% annually on core defense technologies, which implies more than a doubling of total spending for European nations.
• NATO buying American weapons for Ukraine is a shift in policy from the Biden administration, which sent materials directly to Kyiv as it worked to fend off Russia’s attacks. The weapons package could be about $10 billion, The Wall Street Journal reported.
• Defense contractor RTX makes the Patriot missile defense systems Trump has committed to sending to Ukraine. Overall, Trump plans to spend about $1 trillion on defense in fiscal 2026, up roughly 13% from the previous year. Military spending has risen 3% annually on average in the past two decades.
• Analysts see momentum for the defense sector improving in the second half of the year, primarily for a few reasons. Big government cost cutting headlines should subside, for one. International demand should remain strong, given the EU’s spending goals. And U.S. demand is growing too.

What’s Next: Trump has said he isn’t happy with Russia’s Putin and his large-scale bombing and drone attacks on Ukraine the past few days. But after six months in office, Monday was the first time Trump directly took action to counter Putin, the Journal noted.

— Al Root and Liz Moyer

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Food Brands Could Be Ripe for Deals, TD Cowen Says

With Kraft Heinz preparing to carve out parts of its business, Wall Street is considering how other food companies could change their operations. TD Cowen analyst Robert Moskow says food industry megamergers haven’t worked out, but firms focused on specific products have fared better than those with a big selection.

• Kraft Heinz formed in a 2015 merger orchestrated by Berkshire Hathaway and 3G Capital Partners. It said it is evaluating potential transactions to “unlock shareholder value,” after The Wall Street Journal reported a potential split-up. It sells everything from ketchup to lunch meat, boxed foods, and cream cheese.
• Competition from higher-end brands and demand from health conscious consumers have pressured the food industry. Moskow said PepsiCo and Campbell’s could also create value through dealmaking, with Utz Brands being a potentially good match for goldfish cracker maker Campbell’s.
• And he said Conagra, which owns Birds Eye, Duncan Hines, Vlasic, other brands, and Pillsbury and Haagen-Dazs owner General Mills need to continue shedding brands. General Mills sold its U.S. yogurt business, including the Yoplait brand, in June.
• Privately held candy giant Mars is awaiting European regulatory approvals for its planned $36 billion purchase of Kellanova, the former snack division of Kelloggs and maker of Pringles chips, Pop-Tarts, and Eggo. It already cleared U.S. approval.

What’s Next: CFRA analyst Arun Sundaram told MarketWatch more food companies could follow in Kraft Heinz’s path given soft sales and a murky outlook for consumer preferences. “More packaged-food companies may pursue similar strategies to accelerate value creation, especially given limited visibility into when volume sales will return to growth.”

— Liz Moyer and MarketWatch

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—Newsletter edited by Liz Moyer, Patrick O’Donnell, Rupert Steiner