Morning Markets: Nvidia Rallies, Tariffs Escalate, SoftBank Bets on Humanoid Robots

U.S. equities staged a strong rebound on Wednesday, with the Nasdaq Composite closing 1.6% higher. Nvidia, a leading AI chipmaker, rallied nearly 9% after reporting fiscal second-quarter results that beat analyst expectations and gave an upbeat forecast. The positive earnings sparked a rally in software stocks, which had been lagging. In commodities, oil prices rebounded from a three-day slide, with Brent crude at one point climbing nearly 3% intraday, driven by supply concerns and diplomatic moves.

Political tensions escalated as President Trump signed an executive order renaming Lake Ontario, which borders Canada, to 'American Lake'. He also hinted at renaming the Atlantic and Pacific Oceans, a symbolic but provocative move. In response, Canada adjusted its retaliatory tariff list, imposing a 50% tax on copper wire, charcoal, and other goods, deepening the trade conflict.

Monetary policy remains a focal point. Three Federal Reserve officials cautioned that current interest rates might still be too accommodative, given persistent inflation pressures. They warned that additional rate hikes could be necessary to bring inflation back to target. Investors await Fed Chairman Wosh's speech at the Jackson Hole symposium on Friday for further clues.

In the Middle East, diplomatic efforts between Iran and Oman have shown early results. Shipping volumes through the Strait of Hormuz, a critical oil artery, have quietly recovered to 75% of pre-war levels, suggesting a gradual easing of tensions. Separately, Venezuela is reportedly deepening ties with the U.S. and considering leaving OPEC, a move that could reshape global oil dynamics.

In China, a special action plan was launched to enhance automotive product quality, focusing on safety and reliability. Official data showed that industrial enterprises above a designated size saw a 17.6% year-on-year profit increase in the first seven months. Notably, the integrated circuit industry recorded an 18.5-fold profit surge, underscoring rapid semiconductor expansion.

Corporate moves are reshaping AI. Nvidia announced a $12.9 billion acquisition of Hugging Face, intensifying competition over the AI 'middle layer'. SoftBank plans to invest $6 billion to gain majority control of 1X, a humanoid robot startup, betting on 'physical AI' as the next trillion-dollar market. Anthropic is also progressing toward an IPO, potentially allowing early shareholders to cash out and extending lock-ups, with a possible listing by late September.