US Futures Rise, Shrugging Off Trump’s Chip Levies: Markets Wrap

US equity-index futures climbed in early trading, as investors looked past President Donald Trump’s threat of a 100% tariff on chip exports to the US.

Contracts for the S&P 500 and Nasdaq 100 rose while a gauge of Asian shares gained 0.3%. Trump said he would impose a 100% levy on imports of semiconductors, but will provide exemption for companies moving production back to the US. Shares in Nvidia Corp. and Apple Inc. rose in after-hours trading while those for Broadcom Inc fell. 

Oil edged higher after a five-day decline as investors looked beyond US efforts to punish buyers of Russian crude like India. The yields on 10-year Treasuries rose two basis points to 4.24%.

While the 100% tariff headline triggered some risk, markets took comfort from announcements that companies will get exemptions, analysts said. Increasing bets on an interest-rate cut by the Federal Reserve and speculation that corporations will withstand headwinds from trade tariffs and protect their earnings have helped lift stocks to record high levels since their April slump.

“To some degree this outcome would be something of a relief,” Morgan Stanley analysts including Joseph Moore wrote in a note. “Yes, 100% tariffs are unpalatable but if companies are given time to restore them, the real tax is just the higher cost of building chips in the United States.”

Trump said the US would charge “a tariff of approximately 100% on chips and semiconductors,” late Wednesday in the US. He added “but if you’re building in the United States of America, there’s no charge.” The comments came as Apple Chief Executive Officer Tim Cook unveiled a $100 billion US investment plan alongside Trump in the Oval Office.

Trump so far has exempted electronics including smartphones, computers and monitors from his nation-specific reciprocal tariffs, which are set to increase for many trading partners Thursday morning, while indicating those products would be hit as part of a separate forthcoming action on imports that include semiconductors. 

Trump’s move is “unlikely to disrupt major supply chains,” said Billy Leung, a Sydney-based investment strategist at Global X ETFs.

The policy is not yet in force, and no formal executive order or legal mechanism has been published, he said. 

Meanwhile, Fed San Francisco President Mary Daly said policymakers will probably need to adjust rates in coming months to prevent further weakness in the labor market.

Data published last week pointed to a sharp cooling in the labor market over the last few months. 

“This is a market increasingly believing that rate cuts will underpin the next leg of support,” said Charu Chanana, chief investment strategist at Saxo Markets. “The question is whether this easing comes from soft-landing dynamics or worsening stagflation risks.”

Daly’s Minneapolis counterpart Neel Kashkari said an economic slowdown may make a rate cut appropriate in the near term.

Policymakers left rates unchanged at the end of July and next meet in September. They have two more meetings after that in 2025.

Separately, Trump indicated he would likely nominate a temporary Fed governor to fill the soon-to-be vacant seat on the central bank’s board within the coming days, rather than use the seat to signal his choice to replace Jerome Powell as chairman.

In geopolitical news, Trump told European allies he’s planning to meet with Russian President Vladimir Putin and Ukrainian President Volodymyr Zelenskiy as soon as next week in another bid to bring peace between the two countries. 

In other tariff news, the US also imposed an additional 25% tariff on Indian goods, effectively doubling the rate announced days earlier, over its ongoing purchases of Russian energy. Oil prices fell Wednesday.

Also, Switzerland’s president left Washington without announcing any success in lowering the 39% tariff that Trump has put on her country.

In Asia, data set for release includes trade for Australia and China, inflation expectations in New Zealand and industrial production in Malaysia. Later Thursday, the Bank of England is expected to cut interest rates.

Some of the main moves in markets:

Stocks

• S&P 500 futures rose 0.2% as of 9:35 a.m. Tokyo time

• Hang Seng futures rose 0.3%

• Nikkei 225 futures (OSE) rose 0.4%

• Japan’s Topix rose 0.5%

• Australia’s S&P/ASX 200 was little changed

• Euro Stoxx 50 futures were little changed

Currencies

• The Bloomberg Dollar Spot Index was little changed

• The euro was little changed at $1.1652

• The Japanese yen was little changed at 147.44 per dollar

• The offshore yuan was little changed at 7.1848 per dollar

• The Australian dollar was little changed at $0.6500

Cryptocurrencies

• Bitcoin was little changed at $115,026.26

• Ether rose 0.1% to $3,681.05

Bonds

• The yield on 10-year Treasuries advanced two basis points to 4.24%

• Japan’s 10-year yield advanced three basis points to 1.495%

• Australia’s 10-year yield was little changed at 4.25%

Commodities

• West Texas Intermediate crude rose 0.3% to $64.56 a barrel

• Spot gold rose 0.1% to $3,374.23 an ounce