Tariffs, Tech Tailwinds And A Defensive Dash: Thursday’s Setup

Introduction#

According to Monexa AI’s closing tape, U.S. equities added to their summer grind higher on Wednesday, powered by megacap technology and a late-session bid for staples. The S&P 500 closed at 6,345.06 after adding +0.73%, while the Nasdaq Composite out-paced with a +1.21% gain to 21,169.42 as investors chased semiconductor names ahead of fresh White House tariff headlines. In after-hours and overnight trade the policy story intensified: President Trump reiterated plans for a 100 percent levy on imported chips but simultaneously carved out exemptions for companies “building in the United States.” The Oval Office appearance with AAPL CEO Tim Cook and a headline-grabbing $100 billion U.S. investment pledge from Apple rippled through Asian markets, buoyed European futures and underpinned another leg of enthusiasm for domestic fabs.

Market Overview#

Yesterday’s Close Recap#

The major benchmarks pushed to within 1.3 percent of all-time highs, helped by a 5.09 percent surge in AAPL and a 17.49 percent jump for network-gear maker ANET. Volatility gauges retreated: the VIX closed at 16.21, its lowest settle since mid-July, suggesting the market is comfortable absorbing both policy noise and an on-going earnings deluge.

Asian bourses followed Wall Street’s cue. Nikkei 225 futures added roughly 0.6 percent, while Taiwan’s Taiex touched a two-decade high, lifted by confirmation that TSMC will also be exempt from potential U.S. tariffs. Over in Europe, Germany’s DAX was indicated up 0.4 percent pre-cash as exporters cheered talk of a fast-tracked EU-U.S. trade accord.

Overnight Developments#

A flurry of headlines kept liquidity desks busy:

— White House Tariff Clarification: President Trump doubled down on the 100 percent semiconductor duty but outlined a “zero-tariff path” for firms investing in U.S. fabs. The policy nuance pushed Philadelphia Semiconductor futures +1.8 percent overnight.

— Firefly Aerospace IPO: The Texas-based launch provider priced 19 million shares at $45, raising $868 million. Early grey-market quotations imply a 25 percent premium at the open, setting the stage for 2025’s second-largest space listing.

— Asia Fund Flows: Reuters reported foreign investors poured $8.6 billion into Taiwanese equities in July, the most since 2007, citing AI and tariff-hedge rationales. South Korean inflows hit a five-year high.

— Macro Calendar: Weekly U.S. initial jobless claims are due at 8:30 a.m. ET. Consensus sits at 237,000. Fed Governor Michelle Bowman speaks at 1:00 p.m. in Dallas; traders will parse any colour on September’s FOMC decision.

Macro Analysis#

Economic Indicators To Watch#

The market narrative for the next 24 hours revolves around labour tightness versus policy risk. Yesterday’s ADP private payrolls print of 182,000—roughly in line with expectations—did little to shift rate-path probabilities; Fed-funds futures still price a 64 percent chance of a quarter-point cut at the December meeting. Today’s initial claims could sharpen that view. A sub-225,000 reading may embolden hawks and nudge two-year yields beyond their current 4.65 percent mark.

Beyond claims, investors are eyeing:

— July CPI (next Tuesday): Core is expected at +0.2 percent m/m; any upside could reignite debate about the Fed’s “higher-for-longer” stance.

— 10-Year Note Auction (this afternoon): A weak bid-to-cover could steepen the curve, pressuring growth multiples.

Global & Geopolitical Factors#

The semiconductor tariff saga is morphing into a wider geopolitical chess match. Europe’s auto lobby, the VDA, has demanded immediate implementation of the EU-U.S. trade pact, arguing punitive levies on chips would cascade into vehicle costs. Meanwhile, Australia’s health minister voiced “grave concern” over mooted 250 percent tariffs on pharmaceutical imports—a headline that partially explains yesterday’s −1.13 percent slide in the U.S. healthcare sector.

Energy traders are digesting fresh OPEC+ guidance showing August crude supply just 250,000 bpd under target, dousing hopes for a deeper production cut. WTI futures slipped to $78.40 overnight; the Energy Select Sector SPDR has been the worst-performing S&P group for three sessions.

Sector Analysis#

Consumer Defensive staged its best session since May as Walmart, Target and Costco all closed north of 2.5 percent. Traders point to rotation into cash-generative, tariff-insulated names amid macro uncertainty. A 2.98 percent pop in MCD following an earnings beat added fuel.

Technology, still the market’s locomotive, benefited from the chip narrative. Gains were uneven, however: NVDA advanced +0.65 percent, but AMD sank −6.42 percent after analysts trimmed price targets on margin worries.

Healthcare continued to lag. Large-cap biotech weakness—AMGN −5.14 percent, Charles River Labs −10.25 percent—combined with tariff chatter on pharmaceuticals to keep dip-buyers cautious.

Energy sold off for a third straight day, hurt by softer crude and a −5.64 percent dive in solar inverter maker ENPH. A modest bid for XOM late in the session failed to offset losses across mid-stream names like KMI.

Company-Specific Insights#

Earnings And Key Movers#

Apple (AAPL

Wednesday’s 5.09 percent advance was the stock’s best post-earnings day since February. The announced $100 billion domestic investment includes an expansion of Apple’s Arizona silicon design campus and a new packaging facility in Ohio. Analysts at Morgan Stanley lifted their base-case price target to $245, arguing tariff immunity removes a potential $0.30 EPS headwind for FY-2026.

Nvidia & AMD

NVDA shrugged off tariff angst, closing at $179.42. Overnight press from Barron’s highlighted expectations that its H200 data-center GPU line will qualify as “substantially transformed” in the U.S., effectively dodging duties. Conversely AMD fell to $163.12 after Wedbush flagged weaker guidance on client CPU demand; nonetheless, options flow shows bullish call buying into next week’s developer summit.

Shopify (SHOP

The e-commerce platform soared +21.97 percent after printing $2.68 billion in Q2 revenue and guiding for “low-to-mid teens” top-line growth in Q3. Gross merchandise volume of $87.84 billion smashed consensus. Management emphasised cross-border solutions that could blunt tariff fallout, a narrative that resonated with growth-hungry PMs.

Uber Technologies (UBER

A $20 billion authorisation for share repurchases grabbed headlines, though the stock slipped 0.19 percent on profit-taking. Importantly, adjusted EBITDA margin hit 4.5 percent of gross bookings, its highest level since listing. ETFs tracking transportation services (notably IYT) saw modest inflows in anticipation of buyback-driven float reduction.

Firefly Aerospace (FFLY proposed)

Pricing above the range reinforces appetite for space-economy assets. Sector peers Rocket Lab and Astra are indicated up 3-4 percent in Frankfurt trade. If aftermarket chatter proves accurate, Firefly could open near $56, valuing the firm at roughly $6.5 billion on a fully diluted basis.

Other Notables#

— Brookfield (BN: Consensus target lifted to $78.50 post-earnings; a three-for-two stock split announced overnight could stoke retail interest.

— McDonald’s (MCD: EPS of $3.19 handily beat estimates. Comparable sales rose 3.8 percent—a bright spot as grocery disinflation weighs on other fast-casual chains.

— Small-Cap Volatility: AIMDW gained 220 percent on biotech licensing news; conversely ELWS sank 59 percent as blockchain fever cooled. Expect wide spreads at the open.

Extended Analysis#

The tug-of-war between policy risk and AI-driven growth defines this market moment. On one hand, an aggressive tariff regime can inflate input costs, compress margins and disrupt just-in-time supply chains. On the other, Washington’s exemption carrot rewards on-shoring—an incentive likely to accelerate the domestic capacity build-out already under way via CHIPS Act subsidies.

Investors are increasingly pricing a two-tier tech landscape:

1. Firms with the scale and capital to localise production—think AAPL, NVDA, TSMC—may enjoy a valuation premium as policy insulated “national champions.”
2. Companies reliant on third-party imports with limited cash for capex may face a structural cost handicap unless they forge JV agreements or shift product mixes.

For portfolio construction, this implies sticking with cash-rich, supply-chain agile names while opportunistically harvesting volatility in second-tier players. The dispersion we saw yesterday—SMCI −18.29 percent concurrent with ANET +17.49 percent—underlines the case for pair trades within subsectors rather than blanket ETF exposure.

Conclusion#

Morning Recap & Outlook#

Equity futures point to a modestly higher open as investors digest the latest tariff carve-outs and brace for labour data. The key swing factors ahead of the bell are:

— Jobless Claims: A print materially below 230,000 could firm two-year yields and test the durability of growth-stock multiples.
— Chip Tariff Language: Any hint that exemptions will be narrower than implied could spark a reversal in semis.
— Energy Tape: Continued weakness in crude could weigh on the already fragile Energy sector but ease inflation worries.

For now, momentum favours defensive growth—quality consumer staples—while AI infrastructure names retain their leadership mantle provided policy tailwinds hold. Traders should watch relative strength between AAPL and AMD for insight into how the market handicaps tariff winners versus losers.

As always, stay nimble: earnings season is only half-done, macro surprises lurk on every data print, and policy tweets can rewrite the playbook in an instant. But with volatility suppressed, liquidity ample and megacap tech firmly bid, the path of least resistance into the open remains higher—at least until the next headline hits the tape.