US chip stocks surge, gold hits new high, Trump's post triggers asset divergence

U.S. stocks closed higher across the board on Wednesday, with the three major indices climbing on the back of Trump’s posts. Interestingly, at the same time, gold hit a record high while Bitcoin experienced a significant decline. This divergence reflects the market’s complex attitude toward the current policy environment.

U.S. Stocks Rally Across the Board, Chip Stocks Lead

According to the latest reports, U.S. stocks performed strongly on Wednesday:

• Dow Jones up 1.2%
• S&P 500 up 1.1%
• Nasdaq Composite up 1.1%

In individual stocks, chip-related shares stood out the most. AMD surged by as much as 7.7%, Micron Technology rose 6.6%, and Nvidia increased nearly 3%. The collective rise of these tech giants indicates strong demand for the sector.

Chinese stocks also benefited from this rally. The Nasdaq Golden Dragon China Index increased by 2.2%, with Baidu up over 8% and Alibaba up nearly 4%. This suggests that global risk appetite has rebounded in the short term.

Market Impact of Trump’s Posts

Although the news did not specify the content of Trump’s posts, their positive effect on market sentiment is evident. In an environment with high policy uncertainty, any statement from Trump can quickly trigger market reactions. The intensity of these reactions reflects market participants’ high sensitivity to policy directions.

Subtle Asset Divergence

Also on Wednesday, the market staged a “fire and ice” show:

Gold prices soared to a historic high of $4,690 per ounce, while Bitcoin fell to $92,574, triggering over $864 million in market liquidations.

This divergence is not coincidental. Market analysis suggests that the rise in gold mainly stems from concerns over geopolitical and trade uncertainties. Trump’s threat to impose a 10% tariff on imports from eight European countries including the UK, France, and Germany starting February 1, which later increased to 25% in June, has driven demand for safe-haven assets.

In contrast, Bitcoin’s decline reflects an important fact: in the current market environment, Bitcoin is still viewed as a risk asset rather than a safe haven. When geopolitical and trade risks rise, markets tend to sell off high-risk assets in favor of traditional safe havens like gold.

Underlying Macro Logic

This divergence is rooted in differing interpretations of U.S. policy directions. Market analysis indicates that Trump’s tariff threats have indeed escalated trade tensions between the U.S. and Europe. The EU is preparing to retaliate with tariffs on $108 billion worth of U.S. goods.

The rally in U.S. stocks may reflect market expectations that U.S. companies, especially chip manufacturers, will benefit from the trade war, or an overall optimistic attitude toward Trump’s policy trajectory. However, the divergence between gold and Bitcoin suggests that markets remain cautious about the economic uncertainties these policies could bring.

Relevant analysis also points to key variables this week, including U.S. inflation data (core PCE), employment figures, and economic growth forecasts. These data will determine whether markets continue to favor the U.S. economy or shift to a defensive stance.

Summary

The rise in U.S. stocks and the lead of chip stocks indeed reflect positive market expectations for certain policy directions. However, the divergence between gold reaching new highs and Bitcoin falling indicates that market risk assessments are not uniform. This is not simply a victory for Trump’s posts but a complex market response to hedging against policy uncertainties. The key going forward is to observe whether this divergence persists and to monitor the actual progress of U.S.-EU trade negotiations.