Hello, my name is Anique Bao from Singapore. Welcome to another edition of CNBC’s Daily Open.
Two battles that Washington has been building up to this year came to a close on Monday.
The Trump administration launched its toughest sanctions campaign ever against Iran and vowed that China would not be spared, while U.S.-Canada trade relations further deteriorated after the U.S. government threatened to double auto tariffs to 50%.
Meanwhile, markets are bracing for more challenges this week, including Wednesday’s Nvidia earnings, inflation announcement, and the Federal Reserve’s Jackson Hole symposium.
Bessent announces plan to impose sanctions on Iran
The Trump administration is threatening a powerful economic blow to force Iran, which has long refused to bow to U.S. demands despite months of military hostilities and decades of sanctions, to surrender.
Treasury Secretary Scott Bessent has threatened economic sanctions against any country doing business with Iran as part of an “Economic D-Day” campaign to isolate the Islamic Republic.
“We are launching an economic attack against Iran’s financial connections around the world,” Bessent said at a press conference on Monday.
Bessent said the U.S. would start by sharing deadlines with countries to “cease identified activities.” “Any organization that facilitates money laundering on behalf of Iran will be removed from the US dollar system,” he said. “The clock is just starting to tick.”
US-Canada trade war intensifies
Trade relations between the United States and Canada further deteriorated on Monday following the collapse of trade negotiations last week, with President Donald Trump vowing to double tariffs on Canadian cars, trucks, auto parts and steel to 50% starting January 1, 2027.
“Canada has been exploiting the United States for years,” Trump wrote in a post on Truth Social, accusing the longtime trading partner of harming American farmers through its own tariff policies.
U.S. Trade Representative Jamieson Greer shifted the blame to Ottawa in an interview with CNBC on Monday. “They wanted more,” Mr. Greer said, arguing that Canadian domestic politics derailed a deal that was close to completion.
Canadian Prime Minister Mark Carney similarly accused the United States of upending the deal by proposing “last-minute changes” that were “unfair and uneconomic.”
Markets swing towards big week
Wall Street traders started the week on a sour note.
The S&P 500 Index fell 0.28%, weighed down by semiconductor stocks, the Nasdaq Composite Index fell 0.76%, but the Dow Jones Industrial Average bucked the trend and rose 0.26%.
Stock futures were firm as investors turned cautious ahead of Nvidia’s earnings, which could set the tone for the AI industry into the fall.
Traders will also be keeping a close eye on inflation as July’s Personal Consumption Expenditure Index is released on Wednesday.
Investors have scheduled another date with Federal Reserve Chairman Kevin Warsh, who will speak on stage in Jackson Hole, Wyoming, on Friday. His comments could send new ramifications for both stocks and Treasuries.
Bessent is monitoring the Treasury’s war chest.
Mr. Bessent could tap into the Treasury Department’s general account, which holds nearly $1 trillion, to fund an expanded bond buyback program, two senior Treasury officials said. The TGA would give the Treasury significant power to influence long-term bond yields.
The Treasury has already moved to expand buyback operations, doubling the size of liquidity support purchases for the 10-30 year sector to at least $4 billion in the next quarter.
The ministry did not say how it would finance the purchase, leading to speculation that it would be raised through the sale of short-term bills.
Groq Rack is now online
Nvidia said the Groq 3 LPX, the first computing rack built on technology from the $20 billion Groq contract, is scheduled to go live later this year with Nebius as a launch customer.
In December, Nvidia acquired the AI chip startup’s assets for about $20 billion in its largest deal in history, hiring Groq founder Jonathan Ross, president Sunny Madra and a group of engineers.
The race to get Groq chips into customers’ hands highlights the growing emphasis on low-latency inference, the speed that keeps AI agents responsive, especially for coding tools.
With Nvidia’s earnings report coming up on Wednesday, investors will be watching for that reasoning opportunity and how much of its investment in Groq is reflected in its guidance.
— Anique Bao
