CPI Shock: Dow Plunges 300 Points While NVIDIA Fuels Nasdaq Rally on China Breakthrough

Markets recoiled as inflation data hammered traditional indices—but tech bulls feasted on an AI-powered rebound.

CPI grenade detonates in blue-chip trenches

The Dow's 300-point nosedive proves even dinosaur investors flinch when inflation rears its head. Meanwhile, Wall Street's adrenaline junkies piled into risk assets.

NVIDIA's China gambit pays off

Semiconductor darling NVIDIA single-handedly propped up the Nasdaq after whispers of eased export restrictions. Because nothing says 'free market' like geopolitical loopholes.

As crypto traders smirk from their decentralized bunkers, traditional finance grapples with its favorite dilemma: fight the Fed or become collateral damage.

Traders focused on the latest escalation of U.S. tariffs, while the June consumer inflation report showed the first signs of tariff-driven inflation. The Consumer Price Index rose rose 2.7% on an annual basis and 0.3% month over month. Both figures reflected accelerated inflation, likely driven by U.S. tariffs on major trading partners.

Still, the latest round of tariff increases did not trigger the same negative market reactions seen in April. One reason may be skepticism that TRUMP will follow through with his punitive measures. However, a significant factor in this market reaction may be related to China.

China absent from Trump’s tariff threats, Nvidia surges

China is the U.S.’s largest trading partner, a key supplier of inputs to high-value U.S. industries, and a major market for their products. This is especially true for the U.S. tech sector, particularly Nvidia.

Positive trade developments boosted Nvidia, with its stock rising 4% and once again approaching record levels. The price increase came after the chipmaker announced it WOULD be free to sell its H20 GPUs to China. These advanced AI chips were previously subject to a U.S. ban that had cost the company billions.

If the U.S. de-escalates its trade war with China, markets may be able to shrug off the effects of tariffs on smaller trading partners. Still, the impact on inflation and growth could remain significant.