Morning Market Pulse: Trump Greenlights AI Chip Sales to China, Fed Eases Enforcement

The pre-market tone is cautiously mixed as gold surges on geopolitical tensions while copper and silver retreat. WTI crude holds steady at $57.45, gold jumps 1.19% to $4,364.40, and copper dips 0.76% to $5.46. The flight to safety in gold contrasts with weak industrial metals, hinting at divergent macro risks. With Trump’s AI chip export decision and Fed regulatory shifts dominating headlines, markets brace for a volatile open.

Top Market Stories

1. **Trump Greenlights Nvidia AI Chip Sales to China Amid Regulatory Scrutiny**

   President Trump’s approval of advanced Nvidia (NVDA) AI chip exports to China has ignited a firestorm. While supporters argue it strengthens U.S. tech influence, critics warn of national security risks. The move could pressure NVDA’s stock as regulatory uncertainty lingers, with Commerce Secretary Lutnick’s testimony next week likely to sway sentiment.

1. **Fed Closes Enforcement Cases, Signaling Regulatory Shift**

   The Fed’s termination of three enforcement actions—two against UBS (UBS)-owned Credit Suisse and one from 2024—marks a pivot toward streamlining oversight. UBS shares edged higher pre-market as the move eases concerns over legacy penalties. Analysts see this as a broader signal of regulatory easing, though no major policy shift is imminent.

1. **U.S. Jobless Claims Surpass Estimate at 236,000**

   Initial jobless claims rose to 236,000, exceeding the 220,000 estimate. The uptick raises questions about labor market resilience, particularly in retail and hospitality. With the Fed’s next meeting in two weeks, this data could delay rate-cut expectations, adding pressure to the dollar and Treasury yields.

1. **Google and UK Collaborate on Quantum Chip Willow Development**

   Google’s partnership with the UK to develop its Willow quantum chip underscores the global race for tech dominance. The initiative could position the UK as a quantum hub, but investors remain skeptical about commercial timelines. The move highlights long-term strategic bets, with quantum stocks like IONQ and DWAV likely to see volatility.

1. **IonQ’s Stock Soars Despite Operational Losses and High P/S Ratio**

   IonQ (IONQ) has surged 39% year-to-date, trading at 160x 2025 revenue guidance. The speculative rally reflects optimism about quantum computing’s future, but operational losses and stiff competition from Google and IBM (IBM) raise sustainability concerns. A key catalyst will be Q4 earnings and R&D progress.

1. **D-Wave Quantum Posts 100% Revenue Growth in Q3**

   D-Wave (DWAV) reported $3.7M in Q3 revenue, up 100% YoY. The growth is a positive sign for the quantum sector, but shares remain volatile as investors weigh long-term potential against profitability challenges. The company’s ability to scale commercial applications will be critical.

1. **Broadcom’s AI Ambitions Fall Short Despite Strong Revenue**

   Broadcom (AVGO) reported $18.02B in Q4 revenue, up 28%, but shares fell 4% post-earnings. CEO Robbiati’s cautious outlook on AI demand highlights the sector’s unmet expectations. AVGO’s underperformance contrasts with broader tech optimism, signaling potential sector rotation.

1. **White House Announces Plan to Seize Oil on Tanker via Legal Process**

   The U.S. plans to seize oil on a tanker through a legal process, targeting sanctioned regimes. The move reinforces Washington’s aggressive energy enforcement, which could drive oil prices higher. The action also underscores geopolitical risks, with WTI and Brent futures under watch.

1. **U.S. Considers Unified Federal AI Regulation Over State Proliferation**

   A proposed federal AI regulation aims to replace state-level patchworks, streamlining oversight for businesses. While this could boost innovation, critics fear diluted privacy protections. The final executive order will shape the sector’s regulatory landscape, with implications for tech giants and startups alike.

1. **Ukraine Allies Seek to Maintain Trump Support Amid Peace Pressure**

   Ukraine and allies are working to keep Trump supportive as the U.S. pushes for a peace deal. Trump’s pro-Russia stance and skepticism of aid raise concerns about funding gaps. A shift in U.S. policy could destabilize the region, with defense stocks and energy markets bracing for fallout.

Ticker/Company Watchlist

• NVDA: Regulatory risks and geopolitical tensions could drive volatility.
• UBS: Fed’s enforcement closures may ease pressure on shares.
• IONQ: Quantum sector optimism vs. operational losses.
• DWAV: Q3 growth highlights but profitability remains a hurdle.
• AVGO: AI demand caution could weigh on momentum.

Analyst Summary

Today’s market sentiment is a tug-of-war between tech optimism and macro caution. Trump’s AI chip decision and Fed regulatory shifts dominate headlines, while jobless claims add economic uncertainty. Quantum computing firms like IONQ and DWAV face speculative bets, but broader tech stocks like AVGO and NVDA must navigate regulatory and demand risks. Gold’s rise signals a flight to safety, but copper’s decline hints at industrial slowdowns. Investors are advised to balance long-term tech bets with short-term macro hedges.

Upcoming Economic Highlights

This week’s key events include Japan’s military threats against China, Russian advances in Ukraine, and the U.S. seizing a Venezuelan oil tanker. These developments could escalate geopolitical tensions and impact energy markets. Additionally, the EU’s plan to freeze Russian central bank assets and NATO’s call for increased defense efforts add layers of complexity. Investors should monitor these events for potential spillovers into equities, commodities, and the dollar.