Market Monitor News July 10 BMO (AES Corporation, Penguin Solutions UP - AEHR Test Systems DOWN)

Despite a growing avalanche of trade threats from Donald Trump, investors stayed laser-focused on what really matters to them: tech momentum, a potential Fed rate cut, and… Nvidia making history with a $4 trillion valuation.

Yes, you read that right? four trillion dollars.

Let’s break down why the markets rallied even as the geopolitical stage got hotter than a midsummer furnace.

Markets Shake Off Trade War Chatter, Embrace Record Highs

While Trump fired off tariff threats like it was a personal hobby - ranging from 25% to even 200% on certain imports - the markets barely flinched.

On the contrary, the Nasdaq soared 0.9% to a record 20,611 points, while the Dow Jones added 0.5%.

Investors found comfort in the White House decision to delay the actual implementation of these tariffs to August 1st, giving the market room to breathe. Jonas Goltermann, chief economist at Capital Economics, hit the nail on the head: “Markets are focusing on the extension of the deadline rather than the threats themselves.”

“Markets are focusing on the extension of the deadline rather than the threats themselves.” - Jonas Goltermann, Capital Economics

In short? Traders are betting that this is more bark than bite...

Nvidia Becomes the First $4 Trillion Company and AI Mania Lives On

The undisputed star of the day? Nvidia (NVDA | +1.80%). The AI chip juggernaut became the first company in history to cross the $4 trillion market cap mark during intraday trading.

Although it ultimately closed just under that psychological milestone at $162.88, the symbolism is loud and clear: Wall Street can’t get enough of AI.

Since the launch of ChatGPT in late 2022, Nvidia’s stock has skyrocketed tenfold. The AI hype is thriving.

AES Soars on Buyout Buzz: Is Renewable Energy Back in Vogue?

AES Corporation (AES | +19.78%) stunned with a nearly 20% jump, making it the top performer in the S&P 500. Why? Speculation over a potential buyout.

According to Bloomberg, infrastructure giants like Brookfield and BlackRock’s Global Infrastructure Partners are circling the renewable energy firm. With the company’s valuation around $40 billion and long-term contracts supplying data centers (including for Google, Amazon, and Microsoft), AES has turned from a struggling stock into takeover bait.

Sometimes, being beaten down makes you irresistible...

Boeing Rebounds Without News, But Hope Is in the Air

Shares of Boeing (BA | +3.70%) also caught a bid, without any official news. But whispers in the wind suggest that investors are optimistic about the Air India Flight 171 investigation.

Early reports suggest mechanical components, not design flaws, may be to blame. Translation: less legal risk, more room to fly.

The Fed's Internal Tug-of-War: Rate Cuts Coming… or Not?

The latest Fed minutes gave bulls just enough to stay hopeful. Most Fed officials agree that a rate cut later this year is “likely appropriate”, though opinions vary wildly on the timing and number of cuts. Some want a move as early as the next meeting, while others are more cautious.

And just to stir the pot a little more: Trump reportedly has his eye on replacing Fed Chair Jerome Powell. His top candidate, Kevin Hassett, one of his former economic advisers.

Trump also claims the current Fed rate is “at least 3 points too high.” Subtle, right?

Copper, Coffee, and Currencies: Commodities Briefing

Trump’s 50% tariff threat on copper imports briefly sent copper prices soaring, dragging Freeport-McMoRan (FCX | -1.47%) along for the ride, before pulling back the next day.

Strategic analyst Adam Turnquist from LPL Financial warned that this move could seriously hurt efforts to expand energy infrastructure and EV production.

On the energy front, WTI crude edged up slightly to $68.38 despite a rise in U.S. crude inventories. The dollar was mostly flat, with the EUR/USD pair ticking up to 1.1723.

Starbucks China on the Auction Block?

Starbucks (SBUX | +0.33%) is reportedly fielding offers between $5 and $10 billion for a stake in its China business. Private equity bigwigs like KKR and Carlyle are interested, but Starbucks wants to keep a significant share for itself. Considering China accounts for a chunky slice of their revenue pie, it’s not hard to see why.

Quick Hits: Movers and Shakers

Aehr Test Systems (AEHR | -12.39%) took a nosedive after issuing cautious guidance. Chip exposure isn’t always a party.

Penguin Solutions (PSTG | +10.6%) popped despite disappointing revenue. That’s optimism for you.

Bottom Line: Bulls Rule for Now, But Don’t Get Too Comfy

The market is surfing a powerful wave of AI optimism and Fed pivot hopes. But beneath the surface, there’s a growing list of potential risks: an unpredictable trade policy, looming copper cost pressures, and a Fed divided on its next move.

In other words, enjoy the ride, but keep your stops tight.

---

Kristoff - Co-Founder ChartMill

Next to read: Market Monitor Trends & Breadth Analysis, July 10