Author: Chaoxiang Research
US stocks exhibited extreme divergence on Monday. The Dow rose 0.26% to 53,417.16 points, marking two consecutive gains. The S&P 500 fell 0.28% to 7,652.82 points, while the Nasdaq declined 0.76% to 25,869.14 points, and the Philadelphia Semiconductor Index dropped nearly 4%. US Treasury Secretary Besant deployed nearly a trillion dollars from the TGA account to repurchase long-term bonds and announced new sanctions against Iran. Long-term interest rates retreated, but capital flowed into safe havens like gold and Bitcoin, leading the Nasdaq lower. Nvidia notified customers of price increases exceeding 15% next year, with earnings scheduled for release after Wednesday's market close. Tonight, the focus will be on the US August Conference Board Consumer Confidence Index.
Besant's Dual-Pronged Approach: Trillion-Dollar Bond Buy Pressures Rates, Iran Sanctions Spur Risk-Off Sentiment
The biggest macroeconomic variable on Monday came from US Treasury Secretary Besant. He announced the use of nearly a trillion dollars from the TGA account to repurchase long-term bonds, while also unveiling several new economic sanctions targeting Iran.
The directions of these two policies are contradictory. Buying bonds to pressure long-term rates is favorable for the stock market, but sanctioning Iran pushes up geopolitical risk premiums, dampening risk appetite. The market ultimately chose the latter. Capital flowed out of AI hardware and tech sectors and poured into gold and Bitcoin.
The 10-year Treasury yield fell approximately 3 basis points to 4.70%, the 30-year yield declined about 2 basis points to 5.25%, and the 2-year yield dipped roughly 1 basis point to 4.22%. Although long-term rates retreated somewhat, tech stocks did not benefit. The Nasdaq fell 0.76% and the Philadelphia Semiconductor Index dropped nearly 4%. The traditional logic of lower rates benefiting tech failed on Monday, as the weight of geopolitical risk outweighed that of interest rates.
WTI crude oil fell 2.35% to $85.01/barrel, while Brent crude dropped 2.35% to $92.17/barrel. The decline in oil prices was primarily suppressed by demand outlook concerns, not a reduction in geopolitical risk.
Nvidia Notifies Customers of Over 15% Price Hikes Next Year, Plans Perplexity Investment
Macro uncertainty weighed on tech stocks, with Nvidia being one of the individual stocks affected on Monday. Two pieces of news emerged: the company had informed hyperscale customers like Microsoft and Google of price increases exceeding 15% for AI servers starting next year; simultaneously, Nvidia plans to invest in the AI search company Perplexity.
The price hike news continues the previous logic—soaring memory chip costs are driving up server prices, and Nvidia is passing these costs onto cloud providers. However, Monday's trading action showed the market did not react positively to the price hike news. The Philadelphia Semiconductor Index falling nearly 4% indicates that investor concerns about the AI hardware supply chain have moved beyond the question of "whether price hikes can be sustained," with more trading focused on geopolitical risk and macro uncertainty.
Nvidia is scheduled to report earnings after the market close this Wednesday. Price hikes are a positive signal, but the market is more concerned about Blackwell shipments, data center revenue guidance, and whether AI capital expenditures can continue to support orders.
Samsung Buyback Falls Short of Expectations, Shifting the Memory Sector's Narrative
Samsung Electronics' shareholder return plan fell short of market expectations, raising analyst concerns about the memory chip sector's capital expenditure outlook. Samsung shares fell 8.7% in the Korean market on Monday.
Following previous large-scale shareholder return plans by SK Hynix and Samsung, the market's pricing logic for the memory sector had included dual support from "price hikes + buybacks." Samsung's disappointing buyback has broken this narrative, with the sector's capital expenditure outlook re-emerging as a market concern. The Philadelphia Semiconductor Index dropping nearly 4% was significantly dragged down by the underperformance of this memory giant.
US-Canada Tariff Conflict Escalates, Trump Announces Auto and Steel Tariffs to Increase to 50%
Donald Trump announced that starting next year, tariffs on Canadian automobiles, auto parts, and steel will be raised to 50%. This is a further escalation of tariff conflicts following the breakdown of US-Canada negotiations last week.
Automobiles, parts, and steel are core components of the North American supply chain. An increase in tariffs from current levels directly to 50% will have a material impact on Canadian manufacturing and cross-border supply chains. Previously, market judgments on trade friction suggested "room for negotiation remains." Trump's latest statement indicates that tariff escalation has become the established policy direction.
Spot Gold Breaks Above $4,650, Bitcoin Nears $80,000
Capital chose the risk-off direction in response to Besant's policy mix. Spot gold rose 1.05% to $4,651.24 per ounce, hitting an intraday high of $4,681, its highest level in nearly three months. Bitcoin gained 1.59% to $78,966, briefly approaching $80,000 intraday for the first time since mid-May. The US Dollar Index rose 0.20% to 98.93.
The logic behind the simultaneous rise of gold and Bitcoin differs. Gold trades on geopolitical risk and fiscal concerns, while Bitcoin trades more on liquidity expectations and risk appetite recovery. However, they share one commonality: capital flowed not into AI hardware, but rather into "dollar credit alternative" assets.
Today's Focus
US August Conference Board Consumer Confidence Index. PMI data has already signaled strong services sector activity. Whether consumer confidence can similarly validate the resilience of consumption will influence market confidence in a soft economic landing.
Continued reaction to Nvidia's earnings expectations. Monday's two pieces of news have added new variables to the earnings report. The market will continue to speculate ahead of the release; any signals regarding Blackwell shipments, data center revenue guidance, or capital expenditures could trigger volatility.
The direction of Tuesday's market will unfold amidst the interplay of consumer confidence data and Nvidia's earnings expectations.
