EUR/USD rallies past 1.1500 as USD tumbles on fresh tariff threat

The relief that the US and China may have reached some kind of agreement that could relax Chinese exports of rare earth metals to the US—in exchange for allowing more Chinese students to study at US universities, was short-lived, as many sticky points remain uncertain beyond these cited concessions. Trump apparently expects the tariffs to stay as they were set in Geneva, meaning 10% on US exports to China and 55% on Chinese exports to the US, while there’s no news regarding US technology exports to China. In summary, it looks like the US got what it wanted in the critical rare earth area, but China is walking away from the table with little more than a few student visas... I don’t think this smells good.

Even less so, as there are rumours that the EU will hardly ink a deal before the July deadline, and Trump has threatened other Asian nations with fresh tariffs, saying his administration will send letters within two weeks to inform them of unilateral tariffs as a pressure tactic. US Treasury Secretary Bessent, on the other hand, suggested that they could extend the deadline by 90 more days if they believe “good faith” efforts are being made.

So, optimism is waning. The Hang Seng Index is down after yesterday’s peak, the Nikkei is trading lower, the CSI 300 is flat, stocks in Australia are showing toppish signs near February highs, while US and European futures all point to a bearish start today.

Yesterday, the S&P 500 advanced to a fresh high since February after the US CPI update printed weaker-than-expected inflation numbers on both a monthly and yearly basis. That fueled dovish Federal Reserve (Fed) expectations and sent the US 2-year yield lower, boosting stock valuations. The 10-year yield also eased to 4.40% following a relatively strong 10-year bond auction. But the post-CPI rally was short-lived as investors quickly moved to the sidelines ahead of today’s much-watched 30-year bond auction, which could—maybe—remind investors about the US’ exploding and unsustainable debt levels.

But if today’s auction goes well, there’s a chance that US debt concerns ease—yes, yes, markets are not always rational. And easing debt worries, if not accompanied by souring trade headlines, could support equities. A weak auction, on the other hand, could revive debt concerns, send long-term yields higher, and weigh on mood—especially alongside wobbly trade headlines.

USD tumbles

The US dollar is significantly lower following the CPI release and renewed tariff and debt concerns. The EURUSD finally cleared the 1.15 offers and is consolidating above that level, while CAble is back above the 1.35 mark. Reeve’s announcement of spending details had little market impact— no surprise is a good surprise, here. The USDJPY is breaking below its 50-DMA support on broad USD weakness, while gold is up for a second session as the yellow metal regains safe-haven demand amid waning trade optimism.

Good news from tech

Oracle jumped 7.5% in after-hours trading on a set of better-than-expected quarterly results and a bullish AI-driven outlook. The company said its Cloud Infrastructure revenue rose 52% year-on-year and is expected to grow over 70% in fiscal 2026. Capex is projected to exceed $21 billion in fiscal 2025—up sharply from under $7 billion the prior year—highlighting that AI investments remain undeniably strong.

Nvidia, a major barometer of AI investments, topped near the $145 per share level yesterday and should feel the positive momentum from supportive AI news—and more! Because Jensen Huang is paving the way toward a potentially massive new revenue stream: quantum computing. Speaking in Paris yesterday, he said the industry is reaching an inflection point and could already help ‘solve some interesting problems’ in the coming years, marking a notable shift from his previous stance in January that useful quantum computers were probably ‘decades away.’ That day, he sent quantum stocks tumbling. Yesterday, he sent some of them rallying. Quantum Computing Inc. jumped more than 25%, though not all names held onto their gains. Defiance’s Quantum ETF ended the day slightly lower, after hitting a fresh all-time high. Still, the pace remains exciting for tech investors.

Back to Nvidia: their chips could support quantum tech, and their entire quantum algorithm stack will reportedly be available and accelerated on the Grace Blackwell 200 chip, writes Bloomberg. Huang also said Europe’s computing capacity will grow tenfold over the next two years and announced a partnership with France’s Mistral AI to build an AI cloud together. Nasdaq’s Europe Tech Index hit a fresh high yesterday.