Tariffs in Focus, AI Takes Center Stage as Nvidia Hits $4 Trillion Market Cap

US President Donald Trump has announced new tariffs on goods from Mexico, Philippines, Brunei, Sri Lanka, and others, set to begin on Aug. 1. However, investors are focusing on artificial intelligence, with Nvidia becoming the first company to reach a $4 trillion market capitalization. The Nasdaq Composite rose 0.94% to a new high, and Starbucks China is drawing bids of up to $10 billion. Fed officials see rate cuts coming but are split on how many.

US President Donald Trump has announced new tariffs on goods from Mexico, Philippines, Brunei, Sri Lanka, and others, set to begin on Aug. 1. The tariffs are part of Trump's ongoing trade war, aimed at reducing trade deficits and addressing non-tariff barriers. The tariffs include a 20% rate for the Philippines, 25% for Brunei and Moldova, 30% for Algeria, Iraq, and Libya, and 30% for Sri Lanka [1].

Investors, however, are focusing on artificial intelligence, with NVIDIA becoming the first company to reach a $4 trillion market capitalization. The Nasdaq Composite rose 0.94% to a new high, and Starbucks China is drawing bids of up to $10 billion. Fed officials see rate cuts coming but are split on how many [2].

NVIDIA's achievement follows a surge in its shares in June after a massive crash in January, when investors worried about the impact of China's DeepSeek on demand for NVIDIA's GPUs. NVIDIA's $4 trillion market capitalization is seen as a significant milestone, with investment banks predicting that the company could reach $5 trillion in the next 18 months. The company's dominance in the AI hardware sector is underscored by its ability to supply much of the infrastructure behind generative artificial intelligence [3].

The Nasdaq Composite's rise reflects investor optimism about the future of AI and the potential for growth in the tech sector. The market's focus on AI is also evident in the bids for Starbucks China, which is seen as a potential beneficiary of AI-driven innovations in the coffee industry.

Fed officials' expectations of rate cuts are a response to the current economic environment, which is characterized by high inflation and slowing growth. The split among Fed officials on the number of rate cuts reflects the complexity of the current situation and the need for a careful balance between addressing inflation and supporting economic growth.

The new tariffs and the focus on AI are likely to have significant implications for the global economy. The tariffs could lead to higher prices for consumers and businesses, while the growth of AI could lead to new opportunities and challenges in the tech sector. The market's reaction to these developments will be closely watched by investors and financial professionals.

References:
[1] https://nypost.com/2025/07/09/us-news/donald-trump-announces-planned-tariffs-on-more-nations-before-august-1-deadline/
[2] https://stocktwits.com/news-articles/markets/equity/trump-hits-sri-lanka-with-30-tariffs/chFy33CR5Ki
[3] https://wccftech.com/nvidias-ai-chips-are-the-new-gold-and-oil-says-investment-bank-as-firm-briefly-crosses-4-trillion-market-value/