Trump Calls AI Warnings a 'Hoax,' Market Reacts

Nvidia CEO Jensen Huang reportedly received a call from Trump directly addressing this matter.

The Nasdaq 100 has fallen about 5% from its June records, while the semiconductor sector has seen a correction of over 20% from its earlier peaks. This repricing reflects both the unknown returns of AI and the higher discount rate from rising yields.

The initial sell-off was followed by a recovery in the broader index during the day, but capital outflows from AI-related sectors persisted. This pre-emptive reaction in Korea foreshadowed similar shifts later observed in the US market.

Trump continues to use Truth Social to post frequent updates on his economic and AI policy positions, amplifying his direct challenges to industry figures.

This comparison frames the AI debate within his broader anti-establishment rhetoric, dismissing calls for regulation as politically motivated.

The host's remarks reflect a broader cynicism about the motivations behind calls for AI governance.

Current estimates suggest a low likelihood of the bill passing within the current year, with probabilities around 26-27%. This indicates a slow legislative process, potentially prolonging uncertainty around policy decisions.

Trump recently spoke about passing 'great and beautiful' legislation, including a hypothetical $5,000 payout to citizens if Republicans control both the House and Senate. The host expressed significant skepticism regarding the feasibility of such claims, citing the unlikelihood of Republicans dominating both legislative bodies. Such promises are seen as campaign rhetoric, potentially challenging to deliver given political gridlock.

This precise timing is crucial for market participants and analysts tracking legislative developments that could influence various sectors.

Samsung Electro-Mechanics is currently assessed as neutral, lacking a strong buy signal for investors. It is advised to await clear support levels before increasing positions. Caution is urged regarding short-term 'day trading' queries, emphasizing the need for strategic, long-term approaches. Detailed resistance and support levels were provided for various other stocks, including LS Electric and Doosan Tesna, indicating a nuanced market environment.

The market has responded with a targeted rotation, moving away from the AI hardware supply chain.

Interestingly, the software side of the AI industry saw gains even as hardware components pulled back. This market movement is occurring in an environment where the 10-year US Treasury yield stands at 5%, a level not tested during the current AI bull run. Investors are struggling to discern whether the sell-off is primarily driven by AI-related concerns or broader macroeconomic factors like interest rates.

While many industry leaders and political figures are pushing for a deceleration of AI progress, President Trump is strongly pushing back against these calls. This intensifying clash is particularly noteworthy as the US midterm elections approach, creating uncertainty about how potential safeguarding limitations might be implemented.

The success of anticipated IPOs from these companies, expected either later this year or next, is seen as crucial for both the national economy and the chipmaking industry. There is a perceived need to maintain momentum in AI development to remain globally competitive, influencing the government's hesitant stance on regulation.

Equities, gold, and the dollar are showing unusual divergences, making risk management increasingly difficult for those with multi-asset portfolios. The market is taking a defensive posture ahead of crucial central bank meetings and major bond auctions. Risk-taking has become increasingly binary, heavily dependent on whether central banks provide reassuring guidance to stabilize the market.

Twenty-year bond auctions are notoriously difficult to predict and frequently lead to poor outcomes. Despite favorable market conditions leading into such an auction, a positive result is not guaranteed. A failed auction could trigger negative events across the G10 bond space, potentially causing market instability. The outcome of today's auction, scheduled for 11:35 Hong Kong time, is highly anticipated, with concerns that a poor showing could lead to market implosion.

Economists are hoping to see signs of growth bottoming out, potentially spurred by AI investments and increased exports. Expectations are high for September policy measures aimed at reviving business confidence. If these targets continue to be missed, policymakers may need to implement more aggressive stimulus measures to jumpstart demand.

Current signals from Chinese policymakers indicate they are not in a rush to unleash additional stimulus. The primary focus remains on the implementation of existing support measures. Authorities appear to be 'keeping their powder dry,' reserving more aggressive measures for a potentially more severe economic downturn. This cautious approach contrasts with market expectations for immediate, strong interventions.

FAW is set to become the second-largest shareholder in Guangzhou Auto through a joint asset deal, a development that saw the firm's stock pop 8%. This consolidation is seen as a potential bright spot in an otherwise stagnant Chinese market, suggesting strategic movements that could lead to improved efficiency and competitiveness.

New reports indicate progress in edge AI and high-end memory chips. This suggests that China may continue to compete effectively in the chip sector, even as US-based AI labs raise warnings and push for regulation.