Removal of Biden-era AI diffusion rule positive for Nationgate
The original rule, which aimed to restrict AI chip exports, was set to take effect on 15 May.
Affin Hwang Investment Bank Bhd said the US is also reportedly considering replacing the tiered approach with a global licensing regime and using it as a negotiating tool in trade talks.
"As such, the access to AI chips will likely eventually hinge on the respective government-to-government agreements with the US.
"We make minimal changes to our financial year 2025 to financial year 2027 (FY25-FY27) earnings per share (EPS) forecasts for housekeeping reasons pending further clarity on the AI chip export rule," it said.
Affin Hwang updated its valuation base year to financial year 2026 and raised the 12-month target price to RM1.73, maintaining its target price to earnings ratio (PE) of 19.4 times.
The firm also upgraded the stock to a 'Buy' call, following a 43 per cent year-to-date pullback in its share price.
Affin Hwang said Nationgate's core net profit of RM78 million for the first quarter of 2025 (1Q25) exceeded expectations, making up 45 per cent of its full-year forecast and 39 per cent of the consensus estimate.
Nationgate's performance was driven by higher-than-anticipated deliveries of AI servers.
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The Star
a day ago
- The Star
‘Trump got China wrong': Two US-China experts on Washington's missteps
Welcome to Open Dialogue, a new series from the Post where we bring together leading voices to discuss the stories and subjects occupying international headlines. In this edition, two leading China watchers discuss the consequential relationship between the world's two largest economies and how ties might develop under the second Donald Trump administration amid growing trade frictions. Professor Li Cheng, a leading political scientist who has studied China for decades, is the founding director of the University of Hong Kong's Centre on Contemporary China and the World. He previously spent 17 years at the Washington-based Brookings Institution, which included heading up the think tank's John L. Thornton China Centre. Andrew Browne is an award-winning journalist who has covered China for The Wall Street Journal, Bloomberg, Reuters and the South China Morning Post. More recently, he was a partner at advisory firm The Brunswick Group, where he advised some of the world's largest companies on geopolitical strategy from his New York base. The past few months have been a roller-coaster ride for US-China relations, beginning with President Donald Trump's 'Liberation Day' tariffs, followed by the tit-for-tat trade war and then trade negotiations. What are your assessments of the health of bilateral ties and how do you see things unfolding? Li: China certainly feels that the pressure is not just on China. Of course, China is a major trading partner of the US, but the US is not China's No 1 or No 2 trading partner and trade with the US is only 16 per cent of China's entire foreign trade – we should put that into perspective. In my view, the trade issue certainly puts tremendous pressure on China, but there are other issues that are probably far more important from the Chinese leadership's perspective. Of course, US-China relations are not in good shape, to state the obvious. But this did not start five months ago. The Biden administration's relationship with China did not go well and in Trump's first term – especially the last couple of years – it was also in terrible shape. In my view, this relationship and status have less to do with the top leaders – whether American or Chinese – and more to do with structural factors in terms of global geopolitical landscape changes and also the growing fear in the US, rightly or wrongly, of China. The US feels that since World War II there has been no competitor so strong in terms of not only economic and technological areas but also military and even probably financial areas, although some of these concerns may be exaggerated. That's what the US calls the Thucydides Trap and what the Chinese call the rivalry between the No 1 and No 2 powers. So that is what has shaped the relationship. But on the other hand, looking back, I think China probably sees Trump as less problematic compared with former president Joe Biden because Biden's 'two camps' framework of democracy versus autocracy certainly put China into a corner. But under Trump, America alienates its own allies, whether in Europe or elsewhere. So it depends on how you look at it and who you ask. Of course, China is still very much concerned because Trump is surrounded by hawkish people, but on the other hand, he has said that he wants to visit China. Let's see if it happens. His visit certainly would improve the relationship in a dramatic way, though it may or may not be sustainable. There's a lot of irony and uncertainty, so people have been very much confused about the whole situation. Andy, Professor Li mentioned that US-China relations don't appear to be in good shape and that Trump could be less problematic than Biden for China. Do you agree? Browne: Well, I think so – to the extent that Trump is non-ideological and almost entirely transactional. And he's quite capable of executing U-turns and flip-flops, is open to persuasion, and is subject to multiple forces working on him, not least the last person who has his ear. So I think that, from a Chinese perspective, they probably feel that in Trump they've got somebody that they can work with. To echo Dr Cheng Li, the fundamental problem with this relationship is that it is almost completely devoid of trust. At a high level, they're strategic competitors, and each thinks the absolute worst of the other. On the US side, there's a great fear that China is accelerating its technological development, catching up and surpassing the United States, and dominating many of the powerful technologies that will shape the global economy. This presents nightmare scenarios for the United States and zero-sum competition. On the other hand, these two economies are joined at the hip. They are entirely dependent on each other in a host of different ways. And both of these economies have just stared into the abyss and realised that. This isn't, by the way, a tariff war any more. This is now a supply chain war – much more difficult, much more threatening, far more consequential. China essentially threatened to close down the US automotive and defence industries – and it could do so by denying the United States access to certain rare earths. There are 17 rare earths sitting at the bottom of the periodic table. China has almost 100 per cent control over many of these. On the US side, it has threatened to disrupt China's entire petrochemical sector by denying it ethane, threatened to derail its entire civilian airline programme by putting export controls on jet engine parts, and so on. The two sides looked at that and recoiled. In some ways, you could say that it was a positive development. Donald Trump needs an agreement, probably more than Xi Jinping needs an agreement. You mentioned that Trump is non-ideological and open to persuasion. He has also branded himself as a deal maker. Does this leave more room for US-China relations to improve? Browne: We saw this playing out in his first term with the much-ballyhooed phase one trade deal. This was supposed to be the culminating achievement of months, if not years, of trade negotiations between China and the US. As a matter of fact, it wasn't a trade agreement at all. It was a very thin purchase agreement and in the end, it turned into a bust partly because of Covid-19. Nonetheless, Trump was quite capable of packaging this up as an enormous achievement. I have no doubt now that as these two sets of negotiators go into talks, these are going to be incredibly difficult, tough, give-and-take talks – if they try to achieve something that is really ambitious, such as completely changing the terms of their trade arrangement or changing the internal structures of each other's economies. This is going to be impossible, and they'll probably end up with something that looks rather similar to what they ended up with in the first term, which is China agreeing probably to something around fentanyl, and attached to that is some kind of purchase agreement. That would be the base case. If they want to get more ambitious, they can start talking about things like whether Trump could potentially open up the United States to Chinese investment around tech transfer, IP transfer, licensing and so on. But let's see. I think, though, with Trump, he needs an agreement, probably more than President Xi Jinping needs an agreement. The World Bank halved projections for US GDP growth this year – more than any other country in the world. Real threat and real danger of inflation, falling growth, rising inflation. This is your stagflation nightmare. Trump does not want that going into the midterms in 2026. Li: I agree with Andy, but I want to explain a Chinese perspective. Yes, Trump is ideological, but China would probably follow up that statement by saying he is very political. In his first term, after Covid-19 spiralled out of control, he completely changed his policy towards China. Former Chinese vice-premier Liu He's visit to the US was just two months before Trump's 180-degree U-turn, and so the Chinese will remember that. This is related to what Andy said – accurately – about the lack of trust, about Trump and his unpredictable nature. Of course, there are some things that he is very predictable about, but his political nature is very important from the Chinese perspective. The way Trump treated American allies in Europe, no Chinese leader wants to go to the White House at the moment. I think Andy made a very important point, that the trade war will certainly hurt both countries but at different levels. It will probably hurt the US more for various reasons. When Trump imposed tariffs on China, Beijing did not budge, matching them instead. How does this inform us about China's approach towards Trump's second presidency? And how does it differ from the Chinese approach in his first term? Li: The negotiations in Geneva that resulted in a return to 30 per cent, with some months of waiver, reflected the degree of tariffs that China can accept. It has been consistent. If US tariffs go beyond 60 per cent, China may still want to cut a deal, but China might also want to get something in return, like market access and removing some Chinese companies from the Entity List. And all the economic and geopolitical issues will be related, including TikTok and many others. This is the way to explain the Chinese behaviour. This tells you that Donald Trump got China wrong. But I want to add one more thing. Donald Trump is not really well prepared for this tariff war with China. The way he talked about Xi Jinping and thought that [Xi] would call him – people in China know that Xi Jinping would not call Trump under these circumstances. He also talked about how China would have an uprising – like a revolution – if the trade deal was not made. It's certainly not the case. When the foreign pressure is so strong, usually Chinese people will unite and support the leadership rather than the other way round. This tells you that Donald Trump got China wrong. I also want to echo what Andy said about inflation. A more important impact is related to the broader cooperation in certain sectors that Andy mentioned. This will hit the US very badly. But fundamentally, the most important one is already happening, in terms of global reaction and its impact on the US stock market and bond market. That also explains how US$5 trillion of market value disappeared. This probably got Trump very much concerned about what China will do, as its actions will probably hit the US very badly – although China will be hesitant to use that kind of revenge. From the Chinese leadership's perspective, political pressure is more critical, but the fact that Donald Trump's tariff war is against the entire world puts China in a relatively good position. The dialogues in Geneva and London certainly made China less worried about the situation. Browne: I would just echo one point that Professor Li made. I think that the US severely underestimated China and the degree to which it was prepared this time for a trade war with the Trump administration. So you have a figure like Peter Navarro who – at least judging from his writings, his books – has a sort of comic book understanding of China and the Chinese economy as a place filled with Dickensian workshops and slave labour, when he talks about Chinese sofas that are really acid baths, and so on. But even a sophisticated figure like Treasury Secretary Scott Bessent, before the first set of tariff talks, said: 'Look, the Chinese would be crazy to escalate. We have all the cards.' He said they're playing with a pair of twos. Well, it turns out that the Chinese had a couple of aces up their sleeves and very, very powerful cards – which they played. They really should talk to real experts in the United States regarding China. Which is why, I think now, when we go back to the negotiations, they are not going to be negotiations such as those the United States is going to have with other countries, which aren't really negotiations. They are more about 'you present us with your best offer, we will evaluate it, tell you whether it's acceptable, and if it's not we're going to put the tariffs back up again'. Now there's an understanding that they're going into real negotiations with China, and both sides have leverage. Building on that, what are some lessons that Trump should learn or would have learned from this recent tariff war with Beijing? And how tricky will negotiations be, given this context? Li: First of all, there is a lack of expertise on China in Washington, be it economic, social issues, technological issues, you name it. It's an important phenomenon, and on top of that is also Trump's ignorance about the Chinese mindset. And also, among his cabinet members, six of them were anchor people from Fox News. The prevailing perception in Washington nowadays is that those hawkish US policymakers are not brainwashed by China. This is a very bad assessment. They really should talk to real experts in the United States regarding China. But if you look at the current cabinet, look at the deputy level, there are very few or no experts on China. I think they probably should really find some people who understand the Chinese economy and politics, who can negotiate with Chinese financial or economic technocrats. Andy has said rightly that they have absolutely underestimated China's capacity. Yes, China has some economic problems, but remember just a few months ago there was talk about China's economy being past its peak, that China was not investible, and also that Chinese technology would never catch up with the United States for political, cultural and other reasons. All these are being challenged now. And so I think that certainly there are lots of mistakes being made on the part of the US that are very hard to fix. You do need to have a capable team to follow up. This is not just about one person or several cabinet members. But the US is not in the mood to seriously study the outside world. Donald Trump is a great example. He only listens to Peter Navarro and a few others. So I think this will be very devastating from a US perspective. This is only one of the many problems I want to mention. Browne: I would also say that the Chinese side has made some mistakes too, and the first was to believe that their problem is primarily with the United States. It's not. Everybody is worried about China's export machine and the degree to which Xi Jinping has attempted to rescue his economy – suffering from high debt and suffering from a multi-year real estate meltdown – by doubling down on manufacturing. And this is not sustainable. Actually, as the United States puts up high tariffs against China, other countries are even more alarmed that goods that were headed towards the US are going to be diverted towards them. Europe is extremely worried about that. Southeast Asian countries are worried about that. There is a real problem. Scott Bessent got it about right, that the Chinese economy is severely unbalanced, and they need to fundamentally address that issue. They are far too big to export their way out of economic difficulties. China needs to spend down its savings. It needs to reallocate national wealth from the state sector to the household sector. On the other hand, the United States needs to do the opposite. It needs to save more, which would mean higher taxes potentially. It needs to spend less, which means curbing entitlement spending and so on. Politically, in both countries, that type of resolution to the trade issue, which is really the only resolution, is unacceptable. And so both sides are mistaken in believing that they can resolve their issues through trade and through tariffs. Li: I understand Andy's view. I also wrote extensively on the importance of empathy and inclusive growth in China's outreach to the world, be it the Global South or North America or Europe. I've been concerned about the Made in China 2025 policy. But the thing is that Beijing is working on domestic consumption for China's economic growth. It's not so easy. And also, if we compare China with the United States, the US is so rich in terms of natural resources and in terms of land. But the US is not doing well. Economic disparity is out of control. China's policy, looking back, was wise on common prosperity, poverty elimination and the redistribution of wealth. Despite all the challenges and the overall GDP slowdown, China's GDP per capita still grew, which means that the middle class is still growing. I think that all countries should look at their own problems. It's very difficult to tell the Chinese to slow down, to not do foreign trade or other things. China will probably very strongly reject this due to Chinese entrepreneurship. My view is, yes, both parties in the US-China relationship should fix some of their own problems. But the nature and seriousness of their problems are quite different. The US has a distribution problem, economic disparity, and also it continues borrowing and spending. It's far worse than China's difficulties or China's so-called industrial policy. Nowadays when we talk about industrial policy, it's not mainly about China but the United States. That's the reason the trade war actually may not serve the US well. Its manufacturing sector is in terrible shape. The US should really take advantage of its services sector, but the whole campaign is to bring manufacturing back. Unless artificial intelligence can play an important role in this area, it will not work. In their call in June, Xi invited Trump to visit China. How useful would a summit be in easing tensions? Is the relationship so fragile it can only have a small truce after a small truce? What is needed to stabilise ties now? Browne: I think small truce followed by small truce is probably what we should expect, and it may be the best that we can expect given that, as I was describing earlier, there's this high-level problem of a lack of trust. They regard themselves as strategic competitors, and all of that leaches into the trade relationship and everything else – into people-to-people exchanges, scientific exchanges, education, technology, you name it. A fragile truce is where we are and where we're likely to remain. I think it's critical that these two leaders meet to prevent things from spinning out of control, and to keep things on track. Clearly, these two are the decision makers. Every decision reaches their desk. Trump has concentrated more power in his hands than perhaps any other US president in modern times. Xi Jinping is often described as the new Mao Zedong. It's vitally important that they meet and there is a good chance that they will later this year at an Apec summit. The question is, what sort of expectations should we have for the outcome of a meeting between Xi and Trump? I think that in Trump's mind, he believes that man-to-man, we can sit together and negotiate anything. We can do a deal, make a grand bargain. I think he may be exaggerating the utility of a summit in that respect, that when he sits down with Xi Jinping, he is sitting down with a through-and-through nationalist who represents China's interests. When you sit down with Trump, you're sitting down with the US president. You're sitting down with the head of the Maga movement. You're sitting down with a figure who has personal interests. He's a media figure. He wants media moments. He has business interests. That was very much top of mind for leaders in the Gulf when he visited in May. When you sit down with Xi, he is disciplined. He is focused. He represents his country and he's not going to make spur-of-the-moment decisions. He's going to stick to his plan, and he's executing on that plan very, very effectively. So if Trump feels that he's going to go in and Xi – because he has some kind of personal rapport or affinity with Trump – is going to do a deal, I think he's mistaken. Li: I just want to say one thing based on what Andy said. The way Xi handled the situation showed that he's not primarily a Mao-like figure. It was a combination of Mao and Deng Xiaoping. But most importantly, it's Xi who has supervised the country's rapid development and through a historical geopolitical landscape change. So that's quite unique in many ways. It's probably too simplistic to say 'just like Mao', when with Mao the country was very much isolated, and with Xi Jinping supervising, the country is on a very different path. Finally! Andy and I have found some differences in our views! Browne: Look, you're obviously right. I was referring to Xi Jinping as a Chinese nationalist and, in that sense, that is the Mao legacy that he embraces. He certainly doesn't embrace the legacy of Mao's chaos. In fact, quite the opposite. But he does inherit quite a lot of the authority of Mao through his father. He is red aristocracy. But I agree there are fundamental differences between Xi and Mao. Professor Li, given Chinese thinking and considering Trump's more mercurial and unpredictable character, is a summit between the two leaders more distant than we might expect? Li: First of all, there are at least six or seven issues that are far worse than a tariff war from the Chinese perspective. Even though 60 per cent tariffs will certainly bankrupt some companies, the country probably can muddle through. But there are other issues – for example, a complete decoupling. If there was a complete decoupling, it would hit China very severely. That's No 1. No 2, a freezing of Chinese assets or Chinese official's assets. This would also be a terrible thing from the Chinese perspective. Donald Trump can do everything and anything in his view. This kind of attitude is really disturbing. Asking China to pay for the losses from Covid-19 – some of Donald Trump's team members, including some congressmen, have argued for that. Of course, China is not going to do that, so that would mean a very serious clash. Also – as Andy said on completely stopping cultural and educational exchanges – no longer giving out visas for Communist Party members and their immediate family. How many? 300 million! How do they know these people are Communist Party members? So, they are basically saying that no Chinese should enter the US and they are putting a stop to educational exchanges. Even more important is the political or military pressure on the Taiwan issue and in the South China Sea. These are all very crucial issues from the Chinese perspective. Now, there's hope that Donald Trump's visit to China will at least prevent some of these crashing issues, otherwise his hawkish team will dominate. But the Chinese are also keenly aware that there is a lack of trust. How do we know that Donald Trump will not change the next day? And how to prevent Trump's positive policies and approaches to China from being hijacked by his anti-China team members? An important factor in international relations is that we cannot control unexpected events. Events can drastically change. But they could also make China and the US work together – because Donald Trump is still interested in getting the Nobel Peace Prize. Look at his parade, look at the AI-generated images of him. What can he not do? He can do everything and anything in his view. This kind of attitude is really disturbing. He wants to end the war in Ukraine... He probably still wants to visit North Korea and hug Kim Jong-un and stop nuclear proliferation in the region. In all these areas, he needs China's help. For China, these are not vital or the most critical issues. Andy, circling back to your earlier point about how the two countries think the worst of each other, how would you explain Washington's growing anxiety over China? And what is Trump's biggest fear when dealing with Beijing? Browne: Trump is fixated on trade and the trade deficit, and he is nothing if not consistent on this. With China, he is determined to narrow this trade deficit. He's also determined to create jobs. He rightly perceives that the import surges which followed China's entry into the World Trade Organization helped to hollow out the US industrial base. He sees that America's lack of industrialisation is now a security threat – that during the pandemic, the US couldn't get hold of supplies of emergency medical equipment and protective gear and syringes, and so on. So all of this is top of mind. Layered on top of this, of course, are fears that China is outcompeting the United States in areas of high technology. That was a concern of the Biden administration as well. And so that's where I think the fear that Professor Cheng Li talked about comes from. It's really the technological competition. Li: The thing is that, in reality, technology also requires cooperation. I do believe that both countries are equally competitive in many areas. Maybe in AI, the US has an advantage, though this is only relative and subject to change. That has certainly caused a lot of anxiety. Probably, Donald Trump wants more cooperation in these areas but his hawkish team will not let that happen. One thing I wanted to alert you to was some recent surveys of American public opinion – that despite still being quite negative, there are some changes. I think we will see more changes, looking at Trump's current way of dealing with China. Some other countries may also adjust their policy, despite having some concerns with China. That will put tremendous pressure on the US and on Donald Trump. Andy is probably more aware of the general atmosphere than I am, since I left the US two years ago, but while I think it's quite negative about China, we should not jump to the conclusion that Americans want to fight a war with China. These are different issues. If the US is in a really chaotic situation, it's not necessarily good news for China. Nothing is predetermined in this area. I think the Chinese should be fully aware that, in my view, the US will probably review its policy towards China after 10 years. My favourite quote is from Winston Churchill – that America will do the right thing only after it has tried everything else. Unfortunately, the US is in a very difficult period at the moment. Look at the military parade last month. It was astonishing to see this for a person who lived in the United States for over 30 years. I hope it's temporary but it will last for a while. But, as Andy said earlier, we need to emphasise inclusive growth and not see things in an absolutely zero-sum way. Because again, if the US is in a really chaotic situation, it's not necessarily good news for China. The same things can be said about China – if China is in trouble or chaos... it could also be a disaster for the world. So I think all these things require a mindset change, a perspective change. It will take some time. I think there will be some tough times ahead. Browne: I would just pick up on one point there, which I think is an important one – I don't think that when it comes to China, Trump is as fixated as Biden or the Biden administration was on national security. Witness the presence of TikTok CEO Shou Zi Chew at the inauguration, witness Trump's strenuous efforts to try to save TikTok, in spite of a Congressional Act that insists TikTok is sold to a US business. Look at what happened on AI and the AI diffusion rule. The Trump administration just blew away the whole framework put in place in the final few days of the Biden administration. It was designed to sort of rank countries in tiers based on their geopolitical alignment with the United States, and based on that the US would dole out semiconductors. That has now been completely scrapped. On his trip to the Gulf, Trump pretty much pledged to give Gulf countries what they wanted to turn the region into an AI superpower. And the reason for that whole AI diffusion framework was to prevent leakage of advanced semiconductors to China. So if you look at that precedent, it suggests that there is actually a deal that can be made. As I said earlier, I think that deal may well have something to do with opening up the US wider to Chinese investment. There's a recognition, I hope, in the US that China has technologies that the US doesn't have and really needs, and may not be in a position to develop for years, if ever. Batteries are a great, classic example, and I think that given the right understanding, it is possible that you could see a deal where a CATL is allowed to invest in the EV sector in the United States. Or that a TikTok or a Shein or a Temu could figure out a way of entering and remaining in the US markets by resolving issues around data and ownership and AI algorithms, and so on and so forth. So I think that there could be technical solutions that could improve the overall US-China trade and investment relationship. Li: What Andy said is very important. But also there are some even more obvious things – probably less controversial – like the agriculture sector, the energy sector, oil and natural gas. The US wants to sell, China wants to buy. With China's help, American infrastructure could improve profoundly. I think Donald Trump may not be so ideological and he may push for that, and that would be great news for China. So I think that both leaders should think outside the box about how to, through economic cooperation, gradually enhance some confidence in each other. It's a high calling but it's still possible. Donald Trump, in that regard, may be the right person because, to him, everything is transactional; he is not ideological. Trump has never insulted the Chinese leader. Some people probably will have different views, but I think overall he has shown that he has strong interests in cooperating with China. There's some distrust, there are some structural tensions. Nevertheless, you do need to find some ways to avoid free-falls in this most important bilateral relationship in the world, which could be devastating. I think the bottom line is to avoid military conflict. If we talk about the two major powers, or the two leading powers, or two AI powers caught up in war, this is beyond anyone's imagination. This is the thing to absolutely avoid. - SOUTH CHINA MORNING POST
Barnama
2 days ago
- Barnama
Bitget Launchpool Lists Caldera (ERA) with over 2.6M in Token Rewards
VICTORIA, Seychelles, July 18 (Bernama) -- Bitget, the leading cryptocurrency exchange and Web3 company, has announced the listing of Caldera (ERA) for spot trading. Caldera is a rollup platform on Ethereum that enables horizontal scaling and interoperability between rollups. Trading for the ERA/USDT pair began on 17 July 2025, 15:30 (UTC), with withdrawals available from 18 July 2025, 16:30 (UTC). Bitget will launch a Launchpool campaign offering 2,666,600 ERA in total rewards. Eligible users can participate by locking BGB, BTC or ETH during the event, which runs from 18 July 2025, 05:00 to 21 July 2025, 05:00 (UTC). In the BGB locking pool, users can lock between 5 to 50,000 BGB, with maximum limits determined by their VIP tier, for a chance to earn a share of 1,000,000 ERA. In the BTC pool, users can lock between 0.0001 and 23 BTC to receive a portion of 833,300 ERA. In the ETH pool, users can lock between 0.002 and 450 ETH to grab a share of 833,300 ERA.
The Star
3 days ago
- The Star
Wall Street lifted by United Airlines, strong data
At 11:26 a.m. ET, the Dow rose 120.53 points, or 0.27%, to 44,375.31, the S&P 500 gained 23.93 points, or 0.38%, to 6,287.63 and the Nasdaq gained 144.32 points, or 0.70%, to 20,874.81. The Nasdaq rose to a record high on Thursday, leading a cautious climb across Wall Street's major indices, as strong economic data lifted spirits and airline stocks took off on United Airlines' results. US retail sales bounced back sharply in June, signalling renewed economic momentum and giving the Federal Reserve more reason to hold off on rate cuts as it weighs the inflationary impact of import tariffs. Another pointer for the consumer health, PepsiCo forecast upbeat results, fuelled by demand for energy drinks and healthier sodas, helping it offset concerns about a dip in annual core profit. The company's shares jumped 6.8%. Investors have already weathered a whirlwind of mixed economic signals this week – producer prices stalled in June, while a spike in consumer inflation dashed hopes for aggressive Fed easing. Traders now peg the odds of a September rate cut at just over 54%, with a July move nearly ruled out, according to CME's FedWatch tool. "The Fed is going to be more cautious and data-driven than what the market wants them to do," said Jason Barsema, president of Halo Investing. Echoing this cautious stance, Fed governor Adriana Kugler warned that rate cuts are on hold for now, as Trump-era tariffs begin to push up consumer prices and tight policy remains key to keeping inflation expectations in check. US Treasury yields also edged lower following the retail sales data. At 11:26 a.m. ET, the Dow Jones Industrial Average rose 120.53 points, or 0.27%, to 44,375.31, the S&P 500 gained 23.93 points, or 0.38%, to 6,287.63 and the Nasdaq Composite gained 144.32 points, or 0.70%, to 20,874.81. "Today is a day of somewhat justification of consumer health and earnings that continue to impress in a way that offer relief to markets," said Keith Buchanan, senior portfolio manager at Globalt Investments. United Airlines gained 3.4% after the carrier projected stronger demand since early July, offering a rare bright spot for an industry strained by Trump's budget cuts and trade tensions. Rivals Delta and American Airlines also climbed over 1% each. US chipmakers edged up after TSMC, the world's main producer of advanced AI chips, posted a record quarterly profit, saying demand for artificial intelligence was getting stronger. US-listed shares of TSMC gained 3.7%, Marvell rose 2% and Nvidia added 1%. The technology sector was leading the pack among sectors, with 1% gain. Wall Street also watched Netflix ahead of its quarterly results after the market's close. Its shares were up 0.6%. Markets whipsawed on Wednesday after reports suggested Trump was mulling over the ouster of Fed chair Jerome Powell. Though Trump quickly shot down the reports, his persistent criticism of the central bank – and hints at a possible ouster – kept investors jittery over the Fed's independence. Meanwhile, attention also remained on looming tariffs, with an August 1 deadline threatening higher levies for many US trading partners. Trump told Real America's Voice on Wednesday that the US is closing in on a deal with India and may soon reach an agreement with Europe as well. Advancing issues outnumbered decliners by a 1.9-to-1 ratio on the NYSE and by a 2.56-to-1 ratio on the Nasdaq. The S&P 500 posted 25 new 52-week highs and four new lows, while the Nasdaq Composite recorded 78 new highs and 23 new lows. — Reuters
