Stock futures for the , , and experienced volatility on Tuesday morning, as President Donald Trump ratcheted up trade tensions, creating uncertainty in the financial markets. Investors are grappling with mixed signals as new tariffs and trade restrictions loom, sparking concerns over a potential slowdown in global economic growth.

As Trump threatens further escalations, market participants remain on edge, watching closely for any clarity on U.S.-China trade talks.

Trump’s Trade Policy: A New Round of Tariffs

The U.S. President has reignited fears of a trade war with China by hinting at new tariffs on Chinese imports. While no formal policy has yet been implemented, the mere threat has created ripples across global markets. In a series of tweets, Trump expressed frustration with China’s trade practices, promising to escalate the pressure unless substantial concessions are made.

This marks the latest chapter in the ongoing saga between the U.S. and China, which has seen both sides impose tariffs on hundreds of billions of dollars worth of goods over the past few years.

The prospect of additional tariffs has left investors uncertain about the future of U.S.-China relations and the broader global trade landscape. With trade talks stalled, analysts fear that prolonged tension between the two largest economies could lead to further disruptions in international supply chains, increasing costs for manufacturers and consumers alike.

The uncertainty is especially troubling for technology stocks, which have become major casualties of the trade dispute due to their heavy reliance on Chinese manufacturing.

Stock Futures Struggle Amid Global Uncertainty

As a result of these renewed trade concerns, futures for the , S&P 500, and exhibited significant fluctuations in pre-market trading. The were down by approximately 0.5%, reflecting fears that the trade conflict could lead to lower corporate earnings and economic growth.

Similarly, the saw a slight dip of 0.4%, while the Nasdaq futures fluctuated as technology stocks in particular felt the pressure of trade concerns.

This market uncertainty is compounded by other factors, including concerns about rising interest rates and an unpredictable economic environment. Investors are caught between the ongoing global trade disputes and the Federal Reserve’s stance on monetary policy. While the Fed has signaled a possible interest rate cut later this year, market participants remain concerned about how this will affect the broader economy and corporate profitability.

Rising US Treasury Yields and Economic Impact

Adding to the volatility is the movement of U.S. Treasury yields. The has been rising, which increases the cost of borrowing and adds another layer of complexity to the market outlook. With higher yields, investors may start to reassess their portfolios, moving capital out of equities and into fixed-income investments. This shift can dampen stock market performance, particularly for growth stocks that rely heavily on low borrowing costs to fuel expansion.

While rising yields may signal confidence in the broader economy, they also raise concerns about inflationary pressures and the long-term sustainability of growth. As bond yields continue to climb, there are growing worries that the Fed may need to take more aggressive action to combat inflation, which could further upset markets and dampen investor sentiment.

Sector-Specific Impact: Technology and Consumer Stocks Under Pressure

Technology stocks are feeling the brunt of the trade war fears, with major tech companies such as Apple (NASDAQ: ), Microsoft (NASDAQ: ), and Alphabet (NASDAQ: ) at the forefront of market concerns. These firms have large exposure to China, both in terms of manufacturing and market demand. Any new tariffs or restrictions could lead to higher costs and lower profits, impacting their stock prices.

Similarly, consumer discretionary stocks, which include companies like Amazon (NASDAQ: ) and Walmart (NYSE: ), are under pressure. With trade tensions threatening to increase the cost of goods, these companies may face squeezed profit margins, which could negatively affect their earnings reports in the coming quarters.

Energy stocks also saw declines, as concerns about global trade and demand have started to weigh on oil prices. A slowing global economy could reduce demand for energy, affecting the profitability of oil companies. Oil futures were down by about 1%, with and West Texas Intermediate (WTI) showing signs of retreating from their recent highs.

Global Markets React

Global markets are also reacting to the heightened trade tensions. In Asia, the and both closed lower as Chinese stocks were hit by the news of potential new tariffs. European markets also showed signs of strain, with the and both opening in negative territory, reflecting investor caution across the Atlantic.

The ongoing uncertainty over trade, combined with mixed economic signals, has led to a more cautious approach from investors. With corporate earnings season in full swing, traders will be keeping a close eye on how companies are adjusting their forecasts in light of these risks.

Conclusion: What’s Next for Investors?

As trade tensions continue to escalate, investors are facing a volatile period in the markets. The combination of trade disputes, rising interest rates, and uncertainty over economic growth is creating an unpredictable environment for stock market participants. Traders will be closely monitoring President Trump’s next moves, as well as any developments in the U.S.-China trade talks, to gauge the direction of the markets.

While market volatility presents opportunities for short-term traders, long-term investors will likely remain on edge, awaiting clarity on how these global risks will impact corporate earnings and economic growth. Until then, stock futures will likely continue to waver, with investors seeking safe havens amid the uncertainty.

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AI chips and the Data Center value chain are setting up for a blowout 2H. There are three main drivers:

1️⃣ Inference demand is about to explode.

2️⃣ Blackwell systems are reaching full production (GB 200/300).

3️⃣ …and now China is opening up.

In this week’s Tech Edge, we highlight the latest developments related to China export regulations and how they impact the Data Center trade.

Our research digest is designed to keep you on the cutting edge of investments in data infrastructure, software, and cybersecurity.

This content is not intended to provide investment advice, and companies mentioned may or may not be holdings in our funds.

Data centers are on the cusp of another investment cycle.

1. Inference Demand Is About to Go Parabolic

Training large models has dominated the conversation, but inference—the deployment and running of AI models—is where the real volume is coming. Enterprise AI adoption is picking up, and demand for inference-capable chips is set to explode across sectors. AI Agents will be a significant driver of inference demand across many end-markets. Some examples:

Companies such as OpenAI and Preplexity are launching browsers with embedded AI Agents. Cybersecurity companies are launching AI Agents that build on mountains of data and prevent cyberthreats. CRM companies are launching AI Agents that can help with sales and marketing, identifying leads, etc.

Each one of these could be a $30B+ opportunity over the next 3–5 years. More on the Agentic AI in our Tech Edge from January ’25.

2. Blackwell Systems Are Reaching Full Production

Nvidia’s next-gen Blackwell architecture (GB200/300) is entering full-scale production. These chips are specifically designed for AI workloads and optimized for both training and inference. With shipments scaling in 2H 2025, they’ll be driving massive capex across hyperscalers and enterprises.

The big catalyst here is that, compared to the prior architecture (Hopper), Blackwell is significantly more complex and is going into brand-new data center builds. We are just starting to see the announcements for the next wave of investments (Meta (NASDAQ: ), Google (NASDAQ: ), Amazon (NASDAQ: )). More on this in next week’s Tech Edge.

3. And Now… China Is Back

This week’s headline: Nvidia (NASDAQ: ) and AMD (NASDAQ: ) have secured export licenses for the H20, one of Nvidia’s data center-grade AI chips previously restricted from sale to China.

This represents a significant shift from the stance just months ago. Nvidia had projected that its China revenues—over $17 billion last year—would essentially go to zero. Today’s decision changes everything.

Why is lifting of the export restrictions a big deal.

As Nvidia CEO Jensen Huang bluntly put it: “If the U.S. won’t participate in China, Huawei has China covered.”

That’s not a future the U.S. government—or investors—wants to see. This move suggests regulators are beginning to recognize that completely ceding the Chinese AI market isn’t a viable strategy.

This week’s major headline: Nvidia and AMD have secured export licenses for the H20, Nvidia’s powerful data center AI chip that was previously restricted from being sold to China. This marks a major policy reversal, as just months ago, Nvidia warned that its $17 billion in China revenue could effectively vanish due to U.S. export controls.

We now expect a complete reversal both on the revenue front but also as a margin tailwind.

Both Nvidia and AMD had previously written down large amounts of China-specific inventory—$4.5B and $800M, respectively—under the assumption they’d never be able to sell them. That is no longer the case.

If those chips start moving, expect a margin pop in the near term, as these were already expensed but now turn into revenue.

The bigger implication? We may be entering a phase of more balanced, tech-informed regulation—where U.S. companies have a voice at the table.

Who Benefits?

While Nvidia and AMD are the obvious winners, this is a tailwind for the entire AI data center value chain—from chip designers and manufacturers to server integrators, networking providers, memory suppliers, and power supply and management solutions.

In short, the AI boom just kicked off the next cycle and investors should start positioning for it.