U.S. Eases China Chip Trade Curbs, Markets Eye CPI Data for Fed Cues

Key Takeaways:

*Washington offered to approve Nvidia and AMDs China export licenses in return for 15% of sales revenue, easing trade tensions alongside a 90-day tariff pause extension.

*Dow Jones slipped 200 points despite improved risk sentiment, with analysts framing the move as a healthy correction near record highs.

*Markets eye U.S. inflation data for clues on a possible September Fed rate cut; a softer print could spark a fresh equity rally.

Market Summary:

The U.S. government signaled a softer stance toward China by offering to approve export licenses for Nvidia and AMD‘s China chip businesses in exchange for 15% of their sales revenue. The unusual arrangement is seen as a partial easing of trade restrictions and has helped ease concerns over tensions between the world’s two largest economies.

Adding to the positive sentiment, President Trump confirmed a 90-day extension of the tariff pause on Chinese goods into early November, further soothing market jitters and bolstering global risk appetite.

Despite the conciliatory moves, Wall Street failed to reflect the optimism in the latest session. The Dow Jones Industrial Average fell 200 points, leading losses among major U.S. indices. Still, with equities hovering near record highs, analysts suggest the market is undergoing a healthy correction rather than signaling deeper weakness.

Attention now turns to today‘s U.S. CPI release, a key input for the Federal Reserve’s next policy decision. Markets are increasingly pricing in a September rate cut. A softer inflation print could reinforce those expectations and ignite a fresh rally in U.S. equities.

Technical Analysis

Nasdaq, H4:

The tech-heavy Nasdaq has encountered stiff resistance at the 23,680 level, prompting a technical pullback after being rejected at that mark. The index has also slipped below its uptrend support line established during last weeks rally, signaling potential weakness in the near term.

A failure to hold above the 23,480 support level would reinforce a bearish outlook, confirming the breakdown from the uptrend structure. Momentum indicators echo this caution: the RSI has fallen below the midpoint, while the MACD is tracing a lower-high pattern, both suggesting waning bullish momentum in line with the bearish bias for the index.

Resistance level: 23,680.00, 23,900.00

Support level:23,485.00, 23,290.00