China’s AI Boom Lifts Markets as Europe Opens Cautious; Trump Tariff Ruling Looms
Alibaba jumps 19%, Huawei wins AI chip orders, global markets mixed as legal ruling threatens U.S. tariff policy.
Global markets enter September on mixed footing, with China’s AI-driven rally contrasting weak sentiment in Japan and cautious European trade.
♦ China Leads on AI Optimism: Chinese blue chips rose more than 10% in August, fueled by reports Beijing is encouraging firms to build domestic AI chip alternatives to Nvidia. Alibaba shares surged nearly 19% in Hong Kong, their strongest one-day gain since early 2022, while Huawei secured AI chip deals with DeepSeek.
♦ Japan Tech Pullback: Profit-taking hit Advantest (-9.1%) and SoftBank (-6%), dragging the Nikkei down 2% after massive multi-month AI-chip gains.
♦ Tariff Tensions in the U.S.: Legal challenges to Trump’s tariffs could reach the Supreme Court in October. If the levies are overturned, Treasury may need to repay $100+ billion already collected, undermining Trump’s trade leverage and budget assumptions tied to tariff revenue.
♦ European Markets Flat: Wall Street was closed for a holiday, S&P 500 futures stayed muted, and European stock futures barely moved. Traders are watching Eurozone PMI data (August), July unemployment, and ECB President Christine Lagarde’s speech, alongside comments from ECB board members Piero Cipollone and Isabel Schnabel.
♦ Key Questions Ahead: Would importers pass tariff refunds to consumers or keep higher prices to protect margins? Could unwinding tariffs erase the projected $3 trillion tax revenue offset?
