Chips, Profits and Geopolitics Buoy Stocks

Stocks shake off chips tariffs as major producers are unaffected

Highlights

• Stocks shake off chips tariffs as major producers are unaffected

• Growing number of Fed officials call for rate cuts…

• … but how will the bond market react?

• Consumer weakness weighs on GDP growth

Key Takeaways

• Chips Tariffs Leave Large Producers Relatively Unscathed: According to President Trump’s announcement yesterday, companies pledging to invest in U.S.-based production will be exempt from the new levies on semiconductor imports (set at 100%). Large players, such as Apple, Nvidia, and TSMC, have already pledged investment in U.S. production capacity. Therefore, the tariffs to be announced will leave the Tech giants mainly unaffected. Smaller players that rely on imported chips will likely see a substantial rise in cost of production and trade, however.