CNBC Daily Open: Trump walks back on Hormuz tolls in TACO Tuesday

Markets ended higher despite ongoing Iran strikes and a Trump reversal on Strait of Hormuz ship fees (now to be paid by Gulf states via U.S. investments). The key catalyst was cooler-than-expected inflation at 3.5%, lifting equities and chip stocks, while IBM sank 25% after preliminary Q2 results missed expectations. Fed Chair Kevin Warsh urged inflation “regime change” as Under Secretary of Commerce said very few Nvidia H200 AI chips have shipped to China/Hong Kong, hinting at potential restarts that could affect Nvidia sales.

Analysis

The market is still treating geopolitics as a transitory volatility source, not a fundamental reset. That matters: unless crude stays bid long enough to pull tanker insurance, freight, and refinery margins into the next earnings season, the oil move is more likely to be a fading headline premium than a lasting margin shock. The bigger macro tell is that lower inflation is reasserting duration sensitivity, which keeps the path of least resistance with high-quality growth and semis rather than energy or old-economy defensives.

For NVDA, the real signal is not incremental China revenue; it is that the channel may be thawing enough to restore optionality that management had effectively written off. Even a modest restart would matter for sentiment because it improves confidence in the product cycle and supports the ecosystem around networking, memory, and advanced packaging. The second-order loser is China’s domestic AI stack: every incremental imported accelerator that clears compliance is one less near-term urgency signal for local substitutes, even if the direct earnings uplift for NVDA is initially small.

IBM’s collapse is a reminder that legacy IT “defensives” can re-rate lower very fast when execution slips, especially when the market is paying for stability rather than growth. The broader read-through is to enterprise software and services names with low organic growth: in a lower-inflation regime, investors are less willing to forgive any guide-down with multiple support. Berkshire’s donation cadence is not a tradable event by itself, but it does slowly reinforce the succession/float-overhang narrative; intrinsic value is unchanged, yet a modest conglomerate discount may persist until capital allocation continuity is clearer.

Key Decisions for Investors

• Tactically long NVDA on pullbacks over the next 1-3 weeks; add only if follow-up filings/management commentary confirm China shipments are no longer excluded. Risk/reward: 2-3x upside to the first model revision, but cut if China remains a zero-contribution assumption into the next quarter.
• Pair long SMH / short XLE for a 1-2 month duration trade if the inflation print continues to suppress real yields and oil fails to hold any geopolitically-driven spike. Falsifier: Brent sustaining above a new short-term range or tanker/freight rates inflecting higher for more than a week.
• Do not chase IBM short after the gap; wait for a rebound to pre-miss support before considering a bearish entry, since the immediate dislocation is likely to be valuation repair rather than a clean multi-quarter earnings reset.
• Use any further strength in legacy enterprise software/services to trim exposure and rotate toward semis/AI infrastructure names; the market is rewarding visible demand more than buyback-led stability in this tape.
• No trade in BRK.B on the donation news alone; treat it as a governance/sequence-of-leadership watch item rather than a catalyst. Reassess only if the market starts pricing a wider succession discount on a material change in capital allocation.