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Tuesday is turning out to be super-busy: JPMorgan Chase released earnings that crushed estimates. Nvidia shares are jumping, too, on news that it will resume selling its H20 chips in China. (We wonder: What changed about the national-security concerns over such sales, or is this part of the tariff negotiations?) We dive into what Mark Zuckerberg’s A.I. plans might really be about. And C.P.I. data will hit the tape shortly.
A U-turn on trade?
The chipmaking giant Nvidia is soaring in premarket trading on Tuesday, lifting S&P 500 and Nasdaq futures, too.
Why? The company said on Monday that it had scored a key concession from the Trump administration: resumed sales of H20 semiconductors to China, despite concerns that access to these advanced chips could help Beijing’s military and the artificial intelligence industry.
Shares in AMD, a rival chipmaker, were gaining, too, on a report that it had the green light to sell its MI308 to Chinese customers again.
It could be a huge victory for Jensen Huang, Nvidia’s C.E.O. He met with Trump in recent days as he leaned on the administration to lift tech trade restrictions on China. The Trump and Biden administrations had severely limited Nvidia’s ability to sell high-end chips to China, a key market.
That said, the Commerce Department hasn’t yet confirmed the new permission.
Trump’s trade war is still hobbling other companies. Volvo took a $1.2 billion charge on Monday, partly blaming tariff costs. The Swedish automaker is controlled by the Zhejiang Geely Holding Group in China and faces some of the highest levies imposed on overseas car companies.
Taxes may also leave some U.S. consumers seeing red. The administration said on Monday that it would impose a 17 percent tariff on Mexican tomatoes. The measure is meant to bolster U.S. producers, who have long grumbled about competing against producers of cheaper Mexican tomatoes. Economists warn that it could drive up prices at the supermarket.
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In related news: In an effort to pressure Russia into stopping its war in Ukraine, Trump said he would impose “secondary tariffs” of up to 100 percent on countries that trade with Moscow. And Politico reports that officials in Brussels have drawn up a list of roughly €72 billion ($84 billion) worth of U.S. goods to tax, including aircrafts and car parts, if trade talks break down.
HERE’S WHAT’S HAPPENING
China’s economy grows, defying gloomy forecasts. A surge in domestic investment and exports — especially to Europe, Africa and Southeast Asia — pushed second-quarter G.D.P. up by 1.1 percent. Chinese consumers aren’t spending much, but the country’s overall economic resilience suggests it may be able to weather President Trump’s trade war.
A major storm hits the East Coast, including New York and New Jersey. Flash floods overwhelmed the New York City subway system in places, dozens of flights to Newark Liberty International Airport were canceled, and roadways and rail service were disrupted — with more heavy rain forecast. The severe weather comes as NASA said it wouldn’t host previous National Climate Assessments, congressionally required climate-change reports, on its website.
The Supreme Court clears the way for shrinking the Education Department. Justices said on Monday that the Trump administration could proceed with mass firings at the agency without congressional approval. It’s the latest example of the Supreme Court’s expanding presidential authority, giving Trump further cover to unilaterally reshape the federal government.
Meta weighs a big A.I. shift
Meta’s desire to catch up to artificial intelligence rivals like OpenAI, Google and Anthropic has already led it to spend billions of dollars on acquiring new talent and building new resources.
But The Times’s Eli Tan reports that Meta may also follow its competitors in a consequential way: by developing a closed-source A.I. model that keeps its underlying code private. Such a shift would be a big philosophical shift for the company — and it would raise the question, again, of what the A.I. end game is for Mark Zuckerberg, Meta’s C.E.O.
The latest: Top members of Meta’s new so-called superintelligence lab, including its leader, Alexandr Wang, have discussed abandoning the company’s top open-sourced model, Behemoth, for a closed one, Tan writes.
To date, Meta has been an evangelist for the open-source movement: Zuckerberg and Yann LeCun, the company’s top A.I. scientist, have argued that such an approach would prevent A.I. from being dominated by a few big players who charge top dollar for access to their software.
That said, Zuckerberg hasn’t yet signed off on such a move. (It would raise the question of what would happen to LeCun as well.)
Zuckerberg has been open about his A.I. ambitions. On Monday he posted on Meta’s Threads social network about the company’s plans to build several massive A.I. data centers.
Such megaclusters of data servers require loads of power — Meta has struck agreements with several power companies for that — and water, which Tan reports is guzzling up the supplies of surrounding communities.
Then there are the huge payouts that Meta is dangling to prospective A.I. hires and the $14.3 billion that the company invested in the start-up Scale AI to help hire its founder, Wang.
Investors appear to be on board: Meta’s stock is trading at all-time highs.
What is it all for? Part of the goal, Tan tells DealBook, is to develop chatbot technology that would be integrated into Meta’s social media platforms like Facebook and Instagram and improve its all-important ad systems. It also wants to make its Meta AI assistant and smart glasses more popular.
But Zuckerberg and other Meta executives are proud technologists who have noted that the company had been a longtime believer in and developer of A.I. Falling behind rivals like OpenAI, Google and the Chinese upstart DeepSeek (whose work is built in part on Meta-produced open-source code) is both a personal affront and, potentially, a disaster for the company’s future relevance.
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In other A.I. news: Elon Musk’s xAI was one of several A.I. companies to win a contract from the Pentagon, days after its Grok chatbot was criticized for sharing antisemitic posts on X. And Google said it would invest $25 billion in the largest U.S. electric grid to support more A.I. data centers.
The anti-Mamdani movement takes a hit
After Zohran Mamdani won the Democratic nomination for New York mayor, his opponents in the city’s elite declared there was only one way to stop him: Either Mayor Eric Adams or former Gov. Andrew Cuomo should challenge him in the fall — but not both.
That scenario now looks like toast, with Cuomo declaring he’ll run as an independent. Where does that leave business leaders now?
The Mamdani opposition is split, at least for now. “The fight to save our city isn’t over,” Cuomo declared in a video announcing his independent candidacy. His decision follows weeks of speculation about whether he would run after his unexpected shellacking in the Democratic primary last month — and jostling with Adams about who would drop out.
There are now four Mamdani opponents: Cuomo; Adams; Jim Walden, a corporate lawyer running as an independent; and Curtis Sliwa, the social activist and Republican nominee. “If the four of us split the vote in any form or combination, all we’re doing is electing this 33-year-old, paper-thin-résumé socialist, which will be terrible for New York,” Walden told The Times.
What can anti-Mamdani voters do now? Many of them, including the financiers Dan Loeb and Bill Ackman, had settled on Adams. (Both even vetted the mayor’s campaign manager.) But even before Cuomo decided to stay in, Adams faced an uphill battle: Recent polling shows him with a high unfavorable rating and trailing Mamdani and the former governor among key demographics.
As for Cuomo, he hasn’t managed to secure the support of many of the boldfaced names who backed him in the Democratic primary, raising questions about his financial resources.
Unless someone drops out, it’s unclear whether any of the non-Mamdani candidates can gain enough momentum to beat him. That’s increasingly reflected in prediction markets: Bettors on Polymarket overwhelmingly favor Mamdani to win in November, with Cuomo and Adams far behind.
What to watch: On Tuesday, Mamdani is scheduled for the first of two meetings with members of the Partnership for New York City, which represents many influential C.E.O.s. Mamdani has been striking a conciliatory tone with corporate leaders: “Where we have a shared interest in this city and this city’s success I’m excited to share my plans to that end, and to work with them to achieve that success,” he told The Times’s Emma Fitzsimmons.
C.P.I. coming up
On Wall Street and in Washington, eyes will be on Tuesday’s Consumer Price Index report, due at 8:30 a.m. Eastern.
After a string of soft readings, several economists forecast that President Trump’s tariffs began to drive up inflation in June. Trump himself views it differently, saying on Monday, “Incomes are up, prices are down and inflation is dead.”
The stakes are high. A hot number could persuade the Fed to keep interest rates elevated for longer, which could jolt the markets.
Wall Street is divided on what to expect. Bank of America economists have penciled in a 0.3 percent month-over-month increase in headline and core inflation (which excludes often volatile food and energy products).
Their counterparts at Citi, though, said they expected the streak of “benign” inflation readings to continue, though they did anticipate the beginnings of a tariff effect. “Any inflationary pressure should be narrowly focused on goods and short-lived,” Veronica Clark, an economist at the bank, wrote in a research note last week.
Could such a gap in views dent investor confidence? It would take an unexpectedly big number (think: an increase of more than 0.3 percent month over month), coupled with clear signs that tariffs had caused it, to put the markets on edge, George Goncalves, head of U.S. macro strategy at the financial-service company MUFG, told DealBook. “I’m a little bit skeptical now, and I think the market has that feeling, too,” he said.
It’s not just the C.P.I. Investors will also be focused on tomorrow’s Producer Price Index and Thursday’s retail sales data for a more complete picture of how tariffs are affecting prices and consumer behavior. (Remember: Economists have been raising questions about the reliability of government data on consumer prices.)
That’s on top of the second-quarter earnings season now underway — the “largest potential catalyst for market activity,” David Bahnsen, chief investment officer at the Bahnsen Group, told DealBook.
THE SPEED READ
Deals
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Cognition, an artificial intelligence start-up for coders, agreed to buy its rival Windsurf days after that company secured a $2.4 billion licensing deal from Google. (NYT)
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“Dimon Says Private Credit Is Dangerous — and He Wants JPMorgan to Get In on It” (WSJ)
Politics, policy and regulation
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Jay Powell, the Fed chair, reportedly asked the central bank’s inspector general to review planned headquarter renovations that Trump administration officials have criticized. (CNBC)
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House Democratic leaders won’t require their colleagues to oppose three crypto bills backed by Republicans, underscoring a divide on digital currencies among Democratic lawmakers. (Politico)
Best of the rest
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Saudi Arabia is said to have asked consultants to review plans for “The Line,” a futuristic and expensive city project, as the kingdom looks to cut costs. (Bloomberg)
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“The D.E.I. Industry, Scorned by the White House, Turns to ‘Safer’ Topics” (NYT)
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Andrew Ross Sorkin is a columnist and the founder of DealBook, the flagship business and policy newsletter at The Times and an annual conference.
Bernhard Warner is a senior editor for DealBook, a newsletter from The Times, covering business trends, the economy and the markets.
Sarah Kessler is the weekend edition editor of the DealBook newsletter and writes features on business.
Michael J. de la Merced has covered global business and finance news for The Times since 2006.
Danielle Kaye is a Times reporter, covering business and policy for the DealBook newsletter.
The post Nvidia and AMD Soar as Chip Trade Curbs Fall appeared first on New York Times.
