Good morning. The US wants to improve location-tracking capabilities in AI chips. Wall Street banks are cautioning a pullback in US stocks. And Hong Kong issues a record number of black rain warnings. Listen to the day’s top stories.
The US is looking at ways to equip semiconductors with better location-tracking capabilities, said Michael Kratsios, one of the architects of a US AI action plan unveiled by Trump last month. That underscores Washington’s effort to curtail the flow of chips made by the likes of Nvidia to China. Meanwhile, Palantir Technologies reported a 48% increase in quarterly sales to more than $1 billion, citing the “astonishing impact” of AI technology on its business.
President Donald Trump said he would be “substantially raising” the tariff on Indian goods over the Asian nation’s purchase of Russian oil. New Delhi slammed the move as unjustified. In other trade news, Japan’s top negotiator is set to leave for the US to urge Washington to proceed with a promised cut to car tariffs. US Customs said tariffs won’t apply to any products loaded on to a vessel for transport into the US before 12:01 a.m. New York time on Thursday.
Germany received the go-ahead from the EU for more than half of its planned gas-plant expansion, and remains in talks regarding the rest, economy minister Katherina Reiche said. Berlin was able to negotiate state aid approval for “significantly more” than half of the 20 gigawatts of planned capacity, she said, adding that the first tender is due around the end of this year.
Corporate news: Visa is close to a deal to move its European headquarters to Canary Wharf, the Financial Times reported. SoftBank is building up stakes in Nvidia and TSMC to focus on AI. Aramco’s profit is expected to drop on lower prices, while refining margins may improve. BP and Diageo also report today.
Deep Dive: Wall Street Warnings
A chorus of stock market prognosticators at some of Wall Street’s biggest firms is cautioning clients to prepare for a pullback of as much as 15% as sky-high equity valuations slam into souring economic data.
Morgan Stanley strategist Mike Wilson sees a correction of up to 10% this quarter as tariffs hit consumers and corporate balance sheets. Evercore’s Julian Emanuel is expecting a decline of as much as 15%. Deutsche Bank notes that a small drawdown in equities is overdue.
Neutrality got the Swiss nowhere in the tariff blitz, Lionel Laurent writes. The humbling reality is that maybe this isn’t a negotiation, but a test of strength as US policy goes full-on mercantilist—a test that Bern could never really win.
Pedestrians wade through rainwater while crossing a road during heavy rainfall. Photographer: Yik Yeung-man/Bloomberg
Hong Kong temporarily closed some government services and commuters faced disruptions after the city issued its highest rain alert for the fourth time in a week, the most since records began in 1998. Hourly rainfall in some areas exceeded more than 100 millimeters this morning.
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