8/05/2025 Daily Reports
Markets Decline as Fed Holds Rates Steady, Issues Warning on Trade Risks; Trump-China Talks and AI Export Repeal Send Mixed Messages
- US stock futures dipped modestly after the Federal Reserve kept interest rates unchanged and signaled rising economic risks from President Trump’s trade policy.
- While the Fed indicated a “solid” labor market, Chair Jerome Powell defied political pressure for rate cuts, stating the central bank is independent.
- Meanwhile, prospects for moderation in the US-China trade war were also lifted by news of solo negotiations and an unexpected policy shift: the Trump administration announced it would reverse AI chip export controls, propelling Nvidia and AMD stocks.
- Despite this, market sentiment remained cautious. PIMCO warned that recession threats are at a record high in years, and global investors were still grappling with tariff impacts and geopolitics.
- Growth in China’s exports will most likely fall steeply in April, further verifying pressure from the ongoing trade tension. As volatility persists, investors remain hopeful but still wary of further shocks.
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