The US financial and political landscape saw a series of high-profile developments on Tuesday.
President Donald Trump made new comments on international trade and foreign policy, Federal Reserve Chair Jerome Powell reaffirmed the likelihood of another interest rate cut, and leading technology stocks, including Nvidia and Tesla saw renewed volatility.
Meanwhile, broader US markets recovered slightly from steep intraday losses as earnings optimism offered some relief to investors.
Trump endorses Argentina’s Milei and criticizes Spain’s defense spending
US President Donald Trump announced that he would endorse Argentine President Javier Milei’s party, La Libertad Avanza (LLA), ahead of Argentina’s upcoming parliamentary elections on October 26.
Speaking during a luncheon with Milei at the White House, Trump praised Milei’s economic policies, calling Argentina “on the verge of economic success.”
Treasury Secretary Scott Bessent echoed the sentiment, highlighting progress in bilateral trade and expressing optimism about Argentina’s continued economic reforms.
Milei thanked Trump for “continuing to fight for a free world,” while Trump described Argentina as a “beautiful country” striving for “fair and balanced trading.”
In the same event, Trump also warned of possible “trade punishment” against Spain, criticizing Madrid’s refusal to raise defense spending to 5% of GDP as agreed among NATO members.
Trump said Spain’s stance was “very unfair to NATO” and hinted that the alliance should consider expelling Spain for noncompliance.
Powell signals another rate cut amid economic data gaps
Federal Reserve Chair Jerome Powell indicated that the central bank remains on course to deliver another quarter-point rate cut later this month, despite limited access to government data due to the ongoing government shutdown.
Speaking at the National Association for Business Economics conference, Powell said the economic outlook remains largely unchanged since the Fed’s September meeting, when policymakers projected two more rate cuts for 2025.
He acknowledged weakening labor market trends, noting that further declines in job openings could push unemployment higher.
“A rate cut in October is done,” said economist Julia Coronado in a Bloomberg report, citing persistent downside risks to the labor market.
The Fed’s decision will be complicated by missing data, particularly employment reports and inflation metrics.
Powell emphasized the reliance on alternative data sources but called official figures the “gold standard.”
The next Federal Open Market Committee meeting is scheduled for October 28–29.
Tesla Shares slide ahead of earnings amid EV sector concerns
Tesla stock fell over 1.5% in trading, erasing some of Monday’s gains.
The pullback followed General Motors’ announcement of a $1.6 billion charge tied to restructuring its electric vehicle operations amid slowing US EV demand.
The news prompted investor caution across the EV sector, with traders fearing Tesla could face similar demand pressures.
Analysts said the stock’s reaction reflected short-term profit-taking ahead of next week’s earnings report.
Nvidia stock slides on AI competition and trade concerns
Nvidia shares fell 4.4% to $180.59 as renewed US-China trade tensions and competitive headwinds from AMD weighed on investor sentiment.
China announced sanctions on subsidiaries of South Korea’s Hanwha Ocean, reigniting concerns about supply chain disruptions.
Meanwhile, Oracle and AMD unveiled a new partnership to launch a large-scale AI “supercluster” powered by AMD’s upcoming Instinct MI450 chips, expected to begin deployment in 2026.
While Nvidia remains the dominant force in AI hardware, the announcement fueled concerns about rising competition in the sector.
AMD shares were slightly higher, while Broadcom dropped 3.5% following Monday’s rally linked to its collaboration with OpenAI.
Wall Street recovers slightly after sharp intraday drop
After falling more than 600 points earlier in the session, the Dow Jones Industrial Average rebounded to close up 202 points, or 0.44%.
The S&P 500 closed 0.1% down, and the Nasdaq Composite ended at 0.76% down.
Bank stocks led the rebound as Citigroup and Wells Fargo posted better-than-expected quarterly results, rising 3.8% and 7.1%, respectively.
Despite persistent uncertainty around trade and interest rates, investors took comfort in early signs of resilience from the US earnings season.
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