US Administration seeks to acquire a stake in Intel. Natural Gas prices drop to a 9-month low

At the close on Tuesday, the Dow Jones Index (US30) fell by 0.02%. The S&P 500 Index (US500) gained 0.03%, and the tech-heavy Nasdaq (US100) closed down 0.07%. Higher-than-expected wholesale inflation data dampened optimism for a significant Federal Reserve rate cut in September. The July Producer Price Index surged 0.9% month-over-month, the biggest increase in three years, and was up 3.3% year-over-year, which was significantly higher than the 0.2% expectations. Despite the inflation surprise, markets were still pricing in an 85-91% probability of a September rate cut, though expectations for a 50-basis-point change disappeared.

The Trump administration is in talks with Intel about a potential US government acquisition of a stake in the struggling chipmaker. The talks followed a meeting this week between President Donald Trump and Intel CEO Lip-Bu Tan, which came just days after Trump publicly demanded that Tan resign over his investments in Chinese technology companies, some of which are linked to the Chinese military. Details on the size and price of the stake are still being negotiated. A deal could provide Intel with fresh capital to support its long-term turnaround efforts, as the former chipmaking leader has lost its dominant position in recent years. On Thursday, Intel stock rose by 7.4%.

The Mexican peso weakened to 18.8 per USD, near the month-low of 18.88 recorded earlier this month, amid a stronger US dollar combined with the Bank of Mexico’s recent policy easing and renewed tariff pressures. The sharp jump in US producer prices in July, the most significant in three years, reduced bets on an early Fed rate cut, which supported the dollar. Domestically, Banxico slowed its pace of easing but still cut rates by 25 basis points to 7.75% on August 7 in a split decision that acknowledged weak economic activity, currency volatility, and global trade risks. The move reduced the policy premium that had supported the peso and signaled that further small cuts could follow if disinflation continues.

European equity markets rallied strongly yesterday. The German DAX (DE40) rose by 0.79%, the French CAC 40 (FR40) closed up 0.84%, the Spanish IBEX35 (ES35) gained 1.24%, and the UK’s FTSE 100 (UK100) closed up 0.13%. Market sentiment was supported by favorable trade news and cautious optimism about an upcoming Trump-Putin summit, where a possible resolution to the situation in Ukraine is expected to be discussed. A European Commission spokesperson said today that it had received a “new text” from the US with proposals for a joint declaration on tariffs, which is expected to follow the main political agreement. Leading the gains were Rheinmetall (+2.8%), Airbus (+2.3%), and Allianz (+2.1%). Banks also showed solid growth, with Commerzbank and Deutsche Bank adding 1.8% and 1.6%, respectively.

WTI crude oil prices jumped 2.1% to close at $64 per barrel on Thursday, reaching a one-week high and snapping a two-day losing streak. The rise was driven by geopolitical tensions and expectations that a US interest rate cut next month could stimulate demand. Prices rose after President Trump warned of “serious consequences” if negotiations with Russian President Putin on Ukraine fail, adding a risk premium given Russia’s status as the world’s second-largest oil producer.

The US natural gas prices fell by 1.5% to $2.79/MMBtu, their lowest level since November 2024, after the EIA reported a significant increase in storage inventories. Utilities injected 56 billion cubic feet for the week ending August 8, bringing total storage to 3.186 trillion cubic feet, which is 6.6% above the five-year average and slightly higher than the expected 53 billion cubic feet increase.

Asian markets traded with mixed results yesterday. Japan’s Nikkei 225 (JP225) fell by 1.45%, China’s FTSE China A50 (CHA50) rose by 0.70%, Hong Kong’s Hang Seng (HK50) dropped 0.37%, and Australia’s ASX 200 (AU200) showed a positive result of 0.53%. Hong Kong stocks fell by 1.3% in early trading on Friday, extending losses for a second session, as most sectors declined, led by financials, technology, and consumer stocks. Sentiment weakened after July data from China showed that industrial production and retail sales growth missed expectations, highlighting slowing economic growth amid persistent external risks, weather-related disasters, and weak domestic demand. The surveyed unemployment rate also rose to a four-month high of 5.2%. Nevertheless, the Hang Seng is on track for its second consecutive weekly gain, currently up more than 1%, helped by the extension of the 90-day US-China trade truce this week.