'Incompetence': Trump threatens American economy with tariff letters
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Yahoo
3 minutes ago
- Yahoo
Dollar on shaky ground as markets fret about Fed independence
By Rocky Swift TOKYO (Reuters) -The dollar was on a fragile footing on Thursday having lost ground overnight as concerns U.S. President Donald Trump was preparing to fire the Federal Reserve chair shook confidence in U.S. markets. Trump denied reports he was planning to dismiss Fed Chair Jerome Powell, but he kept the door open to the possibility and renewed his criticism of the central bank chief for not lowering interest rates. Investors worry that removing Powell before his term ends in May 2026 would undermine credibility in the U.S. financial system and the dollar as a safe-haven currency. And a more dovish Fed could lead to a return of inflation and negative real yields on Treasuries, said Mahjabeen Zaman, head of foreign exchange research at ANZ. "If that comes to fruition, you're going to see a much weaker dollar than we're already expecting," Zaman said in an ANZ podcast. "Such an event, if that even does happen, it will raise questions for Fed independence and credibility, so I think it's only going to be an increase in volatility." Trump has railed against Powell for months for not easing rates, which he says should be at 1% or lower. Bloomberg reported that the president is likely to fire Powell soon, and a source told Reuters that Trump polled some Republican lawmakers on firing Powell and received a positive response. Trump said that the reports were not true. "I don't rule out anything, but I think it's highly unlikely unless he has to leave for fraud," Trump said, a reference to recent White House and Republican lawmaker criticism of cost overruns in the $2.5 billion renovation of the Fed's historic headquarters in Washington. The dollar index, which measures the greenback against major peers, was little changed at 98.384 after a 0.3% slide on Wednesday. The U.S. currency ticked up 0.2% to 148.14 yen, after a 0.6% decline overnight. The euro stood at $1.1632, down 0.01%. Sterling edged 0.1% lower to $1.3409. Investors remain focused on tariffs ahead of an August 1 deadline when many trading partners face higher trade levies. Trump said on Wednesday the U.S. will probably "live by the letter" on tariffs with Japan and may have another trade deal coming up with India, following his announcement of an accord with Indonesia on Tuesday. In Japan, investors are focused on a potential power shift in upper house elections this weekend that could strain already frail finances, with long-dated yields soaring to all-time highs as the vote nears. Sign in to access your portfolio
USA Today
4 minutes ago
- USA Today
Nvidia stock investors just got great news from the Trump Administration
Nvidia (NASDAQ: NVDA) has been a cornerstone of the artificial intelligence (AI) boom. The stock has advanced 1,070% since January 2023 as the company has reported tremendous financial results, driven by strong demand for its graphics processing units (GPUs) and other data center infrastructure. Nevertheless, export restrictions imposed by the U.S. government have cost the company billions of dollars in sales. Fortunately, Nvidia shareholders recently got great news from the Trump administration: Applications to resume selling its H20 GPUs in China will be approved by the Commerce Department. Here's what investors should know. How semiconductor export restrictions have impacted Nvidia under the Biden and Trump administrations China has historically been a major market for Nvidia. It accounted for 26% of revenue in the fiscal year that ended in January 2022. But export restrictions dragged that figure down to 22% in fiscal 2023, 17% in fiscal 2024 and 13% in fiscal 2025. Meanwhile, CEO Jensen Huang estimates Nvidia's market share in artificial intelligence (AI) chips in China has fallen from 95% to about 50%. The timeline below briefly explains how U.S. policy has evolved over time. On the first-quarter earnings call, Nvidia CFO Colette Kress said, "Losing access to the China AI accelerator market, which we believe will grow to nearly $50 billion, would have a material adverse impact on our business going forward and benefit our foreign competitors worldwide." CEO Jensen Huang has called the export restrictions a failure. He said in May: The question is not whether China will have AI. It already does. The question is whether one of the world's largest AI markets will run on American platforms. Shielding Chinese chipmakers from U.S. competition only strengthens them abroad and weakens America's position. The Trump administration will grant licenses allowing Nvidia to sell H20 GPUs in China On Monday, July 14, Nvidia said it has filed applications to resume selling H20 GPUs in China and has received assurances from the U.S. government that licenses will be granted. The news came days after CEO Jensen Huang met with President Trump, and the company plans to begin delivering compliant AI accelerator chips to China soon. Additionally, the Trump administration revoked the Biden-era AI Diffusion Rule earlier this year, which would have limited Nvidia's ability to sell its most advanced AI chips in dozens of countries that have historically been U.S. allies, including Saudi Arabia, the United Arab Emirates (UAE), Singapore and Israel. The Commerce Department said the AI Diffusion Rule, which was announced during the final days of the Biden administration, would have "stifled American innovation and saddled companies with burdensome new regulatory requirements." Additionally, it would have "undermined U.S. diplomatic relations with dozens of countries by downgrading them to second-tier status." Nvidia has already capitalized on the rescission of the AI Diffusion Rule as more countries lean into sovereign AI — meaning wholly owned data center infrastructure not subject to control by another nation. Earlier this year, the company announced partnerships that will bring its chips and networking equipment to Saudi Arabia and the UAE. Wall Street analysts are likely to increase earnings estimates for Nvidia Ultimately, the Trump administration's decision to permit the sale of H20 GPUs into China, coupled with its rescission of the AI Diffusion Rule, means Nvidia now has a larger total addressable market. In turn, Wall Street analysts are likely to raise earnings estimates, and upward revisions tend to correlate with share-price appreciation. The Wall Street consensus currently says Nvidia's earnings will grow at 41% annually through the fiscal year ending in January 2027. That makes the current valuation of 54 times earnings look tolerable. However, upward revisions to earnings estimates would make the stock even more attractive. Investors interested in adding shares to their portfolios should consider buying Nvidia stock now. Trevor Jennewine has positions in Nvidia. The Motley Fool has positions in and recommends Nvidia. The Motley Fool has a disclosure policy. The Motley Fool is a USA TODAY content partner offering financial news, analysis and commentary designed to help people take control of their financial lives. Its content is produced independently of USA TODAY. Should you invest $1,000 in Nvidia right now? Offer from the Motley Fool: Before you buy stock in Nvidia, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Nvidia wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $680,559!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $1,005,670!* Now, it's worth noting Stock Advisor's total average return is 1,053% — a market-crushing outperformance compared to 180% for the S&P 500. Don't miss out on the latest top 10 list, available when you join Stock Advisor. See the 10 stocks »
Los Angeles Times
4 minutes ago
- Los Angeles Times
Trump administration pulls billions in funding for high-speed rail project
The Trump administration has canceled billions of dollars in funding for California's high-speed rail project after the state agency rejected the federal government's assessment of the project's failings. The Federal Railroad Administration pulled $4 billion in funding on Wednesday that was intended for construction in the Central Valley, according to a letter that acting FRA administrator Drew Feeley sent to the project's chief executive officer Ian Choudri. Department of Transportation Secretary Duffy has also asked the FRA to review other grants related to the project. The agency said it will consult with the Department of Justice on potentially clawing back other funds. Duffy blamed state leaders for the 'mismanagement' of plans for the train. 'Governor Newsom and the complicit Democrats have enabled this waste for years. Federal dollars are not a blank check – they come with a promise to deliver results. After over a decade of failures, CHSRA's mismanagement and incompetence has proven it cannot build its train to nowhere on time or on budget,' Duffy said in a statement Wednesday. 'It's time for this boondoggle to die.' On X, Duffy said that Newsom and California 'are the definition of government incompetence and possibly corruption.' In response, Newsom said he 'won't be taking advice from the guy who can't keep planes in the sky.' President Donald Trump, a vocal critic of the project who has vowed to defund it, said the decision to pull funding saves taxpayers' money. 'I am thrilled to announce that I have officially freed you from funding California's disastrously overpriced 'high speed train to nowhere,' Trump wrote on social media. 'The railroad we were promised still does not exist, and never will. This project was severely overpriced, overregulated and never delivered.' The high-speed rail project was supposed to be completed by 2020 but is decades off schedule and about $100 billion over budget from its original proposal of $33 billion. No part of the line from Los Angeles to San Francisco has yet to be completed and construction has so far been confined to the Central Valley. The Trump administration initiated a review of the project in February after Republican lawmakers called for an investigation. In a 310-page compliance review released in June, the federal government cited budget shortfalls, missed deadlines and a misleading projected ridership and found 'no viable path forward' for the train. Choudri sent two letters to the Trump administration in response to the review findings. In a letter sent earlier this month, Choudri called the assessment inaccurate and said the administration relied on old information to come to its conclusions, misrepresenting the facts. 'FRA's flawed inputs have led to flawed outputs,' Choudri wrote. 'Rather than rely on the relevant information and documentation provided by the Authority, FRA inexplicably relies on outdated information, unreliable, unsupported third-party sources, and incomplete and flawed analyses to support its conclusions.' Choudri asked the Trump administration for another meeting in early August and for the decision to be delayed. The responses did not satisfy FRA's concerns, the agency said. The high-speed rail authority and state lawmakers have been pushing for private-public partnerships to fund the project outside of government support. The state is also committing $1 billion per year in funding towards the project, which has created thousands of jobs in the Central Valley and has become central to several communities' business revitalization plans.
