CNBC Daily Open: Trump has the last word on U.S. stocks

U.S. stocks had a rocky day of trading, swinging from highs and lows like the quality of Game of Thrones across its eight seasons.

At its lowest during the session, the S&P 500 fell as much as 1.5%, but picked up and traded positive for most of the day after U.S. Trade Representative Jamieson Greer gave an indication that China’s next trade move could influence the implementation of President Donald Trump’s tariffs.

The optimism in markets fizzled, however, when Trump said he was considering “terminating business with China having to do with Cooking Oil” and other forms of “retribution” because the country has stopped buying U.S. soybeans since May. Investors seemed to take that threat seriously, sending the S&P 500 down 0.2% for the day.

Developments elsewhere, however, were more positive. U.S. Federal Reserve Chair Jerome Powell suggested that the central bank might stop tightening monetary policy with regard to its bond holdings. Furthermore, big banks — bellwethers for economic activity — such as JPMorgan Chase, Citi and Goldman Sachs, beat earnings expectations, suggesting that fundamentals are still sound.

And while Oracle’s turn to AMD’s artificial intelligence chips — hence diversifying from Nvidia graphics processing units — might not be pleasant news for Jensen Huang, spreading out concentration risk could be a positive outcome for investors banking on AI to continue the market rally.

The question, then, is whether Trump will raze the AI-supported market with his tariffs — or if the Magnificent Seven kingdom will stand.

Trump threatens China with cooking oil embargo. That’s in response to Beijing halting its purchases of U.S. soybeans since May. Whether 100% tariffs on China come into effect depends on how the country reacts, U.S. Trade Representative Jamieson Greer said Tuesday.

Powell suggests the Fed might stop tightening policy. The U.S. central bank could cease reducing the size of its bond holdings, which would allow liquidity to be maintained in the economy, Powell said in a prepared speech Tuesday.

Oracle to deploy AMD artificial intelligence chips. Oracle will use 50,000 of AMD’s Instinct MI450 chips beginning in the second half of 2026, in a sign that companies are turning to Nvidia’s competitors for their processing needs.

U.S. stocks were mixed. On Tuesday, the S&P 500 and Nasdaq Composite fell but recovered from session lows. The Dow Jones Industrial Average, however, closed in the green. The pan-European Stoxx 600 index dropped 0.37% and touched two-week lows in the session.

[PRO] An attractive European fixed income play. This niche area has “real value,” according to BlackRock’s James Turner, co-head of global fixed income in EMEA. In addition, it offers protection against the risk of interest rate fluctuations.

Trump says the war is over, but the path to peace in the Middle East is fragile

While most agree that U.S. President Donald Trump deserves credit for helping to bring an immediate end to the devastating war between Israel and Hamas, achieving a long-lasting peace is a different matter. Analysts note that detail is scant in Trump’s 20-point peace plan, meaning there are a number of grey areas and room for discontent and disagreement in the near and long-term.

This is particularly salient when it comes to both immediate matters in the peace proposal, such as the demilitarization of Hamas and withdrawal of Israeli forces from Gazan territory it currently controls, to perhaps the biggest bone of contention: a two-state solution for the Israelis and Palestinians.

— Holly Ellyatt