Stock market today: S&P 500 slips as Trump extends China tariff deadline

U.S. equities, led by the S&P 500's 0.2% decline, closed lower Monday after President Trump extended the China tariff deadline by 90 days, prolonging trade policy uncertainty. Investors are now keenly focused on this week's critical inflation data, particularly July's CPI, with consensus expecting an acceleration in core inflation to 0.3% month-on-month. This data is crucial as a weaker jobs report has increased expectations for a Federal Reserve interest rate cut next month, making inflation prints a key determinant for future monetary policy.

Analysis

U.S. equity markets ended modestly lower, with the S&P 500 slipping 0.2%, as investors digested a 90-day extension of the China tariff deadline by President Trump, which prolongs trade policy uncertainty. Market focus has now pivoted to a heavy slate of upcoming economic data, most critically the July Consumer Price Index (CPI). Consensus expectations are for a 0.3% month-on-month acceleration in core CPI, a figure that analysts at ING suggest would still be considered acceptable for the Federal Reserve to proceed with an anticipated interest rate cut in September, especially following a weak July jobs report. At the single-stock level, there was significant divergence. In semiconductors, Micron Technology (MU) raised its Q4 fiscal 2025 guidance, citing improved pricing, while Nvidia (NVDA) and Advanced Micro Devices (AMD) faced headwinds from reports they may need to pay the U.S. government 15% of returns on AI sales to China. The AI sector also showed bifurcation, with C3.ai (AI) shares falling sharply on a poor preliminary earnings report, whereas cloud infrastructure firm CoreWeave (CRWV) gained 7% after JPMorgan more than doubled its price target to $135. In biotechnology, gene therapy developers Sarepta (SRPT) and Capricor (CAPR) fell on news of a potential FDA appointment, signaling heightened regulatory risk.

Key Decisions for Investors

• Investors should closely monitor this week's U.S. CPI data, as an inflation print significantly above the consensus 0.3% month-on-month core increase could challenge the market's expectation for a September Fed rate cut and induce volatility.
• The potential 15% government fee on China AI sales introduces a specific, material risk for Nvidia (NVDA) and AMD (AMD), warranting a re-evaluation of margin forecasts for these names relative to peers like Micron (MU) who reported positive guidance.
• The sharp divergence between CoreWeave's (CRWV) infrastructure-driven upgrade and C3.ai's (AI) software-related earnings miss highlights the need to prioritize companies with clear execution and tangible demand within the AI theme.
• Holdings in the gene therapy space, including Sarepta (SRPT) and Capricor (CAPR), should be reviewed for exposure to heightened regulatory risk following news of a potentially critical appointment to the FDA.