U.S. Tariff Deal with Canada Collapses, Nvidia Warns Price Hikes are Coming

**Zaid Admani** (0:00)
Public.com presents The Rundown, your daily market update in 10 minutes. My name is Zaid Admani, and today is Monday, August 24th. In today's episode, we'll break down the collapse of US Canada trade talks, and why both nations are heading for a trade war. We'll also tell you why Nvidia is planning to raise prices on their newest AI chips. Then stick around to the end of the show to find out which famous world record a robot just broke over the weekend. We got a great show for you today.
Let's go.
Stocks are coming off a losing week with the S&P 500 dropping 1.4% last week, while the NASDAQ fell by 2.1%. Both of these indices snapped a three week winning streak. The big story last week was the bond market. Long-term treasury yields surged to their highest level in nearly two decades, with the 30-year yield hitting its highest level since 2007 So what that effectively means is that the US government currently has to pay more than 5.2% a year to borrow money for 30 years. And you know, when treasury yields start spiking everything from mortgages to corporate borrowing gets more expensive, so there is a ripple effect across the economy. In fact, it got bad enough last week that Treasury Secretary Scott Besson tried to step in. He announced that the government would buy back more of its own long-term debt to calm things down. That strategy didn't really work. And we talked more about what's happening in the bond market. And if the era of cheap money might be coming to an end in the deep dive over this past weekend, we got some really great feedback on that episode. So if you missed it, definitely go back and check it out. Now we'll continue to keep an eye on the bond market, but looking ahead, we have a pretty stacked week coming up. This week, we are getting the PCE inflation report, which is the Fed's preferred inflation gauge. We're also getting the second quarter GDP data. And then Nvidia earnings come out on Wednesday after the bell. And then to top things off, the Federal Reserve is having their annual gathering at Jackson Hole later this week. We're gonna get a keynote speech from Fed Chair Kevin Warsh on Friday. And with the chaos happening in the bond market, it'll be really interesting to see what Kevin Warsh has to say. So between inflation and Nvidia and the bond market, we could get a ton of big swings this week. We're gonna stay on top of everything. So make sure you guys are subscribed to the podcast and tuning in every day to stay in the loop.
Let's run through some headlines, starting with a Canada tariff update. The trade war between the US and Canada is officially back on again. Over the weekend, trade talks between the two countries completely collapsed, and now the US has imposed a 50% tariff on around $20 billion worth of Canadian imports, including things like furniture, plastics, plywood, electrical equipment, and hockey sticks. Canada's Prime Minister Mark Carney responded by saying that Canada will retaliate with its own tariffs starting September 8th, targeting things like steel, dairy, appliances, and electronics. So things are starting to escalate again, and you know, all of this started because President Trump was upset that Canada retaliated with their own tariffs when the US imposed their initial tariffs last year. So Trump threatened Canada with even more tariffs using a provision of the Tariff Act of 1930 that had never been used before, and he was doing this to get around the Supreme Court blocking the IEPA tariffs from earlier this year. Now, the two sides were actually close to a deal, but according to Canada's ambassador to the US, the talks fell apart over the fine print. Basically, Canada thought they had agreed to certain terms, but when they saw the actual written agreement, they felt the details were much less favorable. And what's interesting is that Canada is digging in here. Prime Minister Mark Carney basically said that no deal is better than a bad deal. But there could be some real economic costs for Canada here. You know, Canada relies heavily on the US as its biggest trading partner. Last year, Canada exported $454 billion worth of goods and services to the US. One estimate projects that around 90,000 Canadian jobs could be at risk if these new tariffs persist. So it's an interesting gamble by Mark Carney to dig in, but he does have the political support back home. More than 75% of Canadians surveyed said that Mark Carney was right to walk away from negotiations. Now again, these tariffs only apply to around 5% of what Canada imports to the US. But I think what the big picture fallout could be is that Canada will try to diversify their economy away from being too reliant on the US. So we'll see if the two sides end up working things out, but as of right now, it doesn't seem like it. Let's shift gears and talk about Nvidia. As I mentioned earlier, Nvidia reports earnings on Wednesday after the close. And as usual, there is a lot riding on this report. And there've been a few interesting Nvidia stories that have come out over the last few days. The first is that Nvidia is raising prices. According to Bloomberg, some of Nvidia's biggest customers have been told that prices of AI servers containing Nvidia chips are going up by more than 15%.