Bessent Today, Warsh Friday: 8 Key Items Shaping the Stock Market Monday

These are the early headlines and other items poised to influence the market at the start of trading Monday. As we share this collection of market drivers, U.S. equity futures point to a weak start to the trading week.

1. Oil prices slipped more than $1 a barrel on Monday as investors took profits ‌ahead of an expected announcement from Washington about imposing more sanctions on Iran that may further disrupt supplies from the Middle East… U.S. Treasury Secretary Scott Bessent, who is set to hold a press conference at 2 p.m. EDT (1800 GMT) on Monday, has threatened to impose “the toughest sanctions in history” on Iran. President Donald Trump has also threatened to impose sanctions on Iran’s trading partners. (Reuters) US Federal Reserve chair Kevin Warsh will seek to soothe investors’ nerves in a crunch week as mounting signs of economic strain threaten to cast a shadow over the annual Jackson Hole symposium… The Fed chair will address central bankers and economists at the Kansas City Fed’s Jackson Hole gathering on Friday for the first time since his appointment, where he is expected to set out the framework behind his pared-back style. (FT)

Treasury Secretary Bessent’s 2 PM press conference today and Fed Chair Warsh’s Jackson Hole address Friday will bookend the week, and questions over what the two may say is likely to keep many folks on the sidelines. In between, we have quarterly results and guidance from Nvidia (NVDA), and odds are there will be an ample number of people waiting to hear from the largest S&P 500 constituent and the guidance it delivers. We will also want to gauge Iran’s reaction to Bessent’s comments in the coming days. So far, Iran remains defiant, but President Masoud Pezeshkian has also called for a diplomatic solution.

We’ll be back to Nvidia in a moment, but first… Canada.

2. Prime Minister Mark Carney said Canada will apply counter-tariffs on $20 billion of US products on Sept. 8, escalating the feud rocking one of the world’s biggest trading relationships… Carney said he was left with little choice after trade talks with President Donald Trump’s administration broke down on Friday night, and the US put import taxes of 50% on items such as plywood, liquor, electrical equipment and hockey gear from Canada. (Bloomberg) Prime Minister Mark Carney’s government sees little chance of resuming talks with President Donald Trump before the midterm elections after trade negotiations collapsed, according to people familiar with the matter. (Bloomberg)

The new 50% Trump tariffs on Canada went into effect over the weekend, hitting wine, furniture, dairy products, cement, clothing, fishing rods and hockey equipment. All in all, some $20 billion of Canadian exports to the U.S. The item to note is that these duties do not exempt Canadian products under the three-nation trade deal, which has shielded most Canadian exports to the U.S. in the last 18 months.

Canada’s tariffs, which will come on line in the next few weeks, will impose tariffs on U.S. steel, dairy, appliances, agricultural equipment, pulp and paper, and electronics, along with some products the U.S. previously targeted in Canada. More details are expected to be released in the coming days, but to us the comment that stands out is Carney sees little chance of resuming talks with Trump before the midterm elections. This suggests consumers could potentially see inflation tailwinds strengthen just as they get ready to cast their votes on November 3.

When we look at the Trump tariff on plywood from Canada, given our position in Builders FirstSource (BLDR), we’ll point out that Canada is responsible for 10%-15% of imported softwood plywood in the U.S. As for Trump’s tariffs on Canadian furniture and dairy products, we see it as an incremental tailwind for the Portfolio’s positions in TJX (TJX) and Costco (COST).

3. Some of Nvidia Corp.’s biggest customers have been told that the prices of servers containing its artificial intelligence chips are going up more than 15% in many cases with memory chip costs soaring. The price hikes will go into effect on systems shipped early next year and will impact systems including those with the flagship Vera Rubin and Grace Blackwell chips… Companies who build the servers under contract for large data center operators such as Microsoft Corp., Alphabet Inc.’s Google and Oracle Corp. have recently notified their customers of the forthcoming increases… (Bloomberg)

On the one hand, few should be surprised that Nvidia is lifting prices and it’s a factor that will lead to revenue and EPS revisions for 2027 and beyond. We’ll see how much CEO Jensen Huang will say on this week’s earnings call about the pricing action, but he’s likely to tie it back to memory constraints as well as sky-high demand for Nvidia’s chips and the company’s own capacity constraints relative to demand. That could temper guidance or at least run the risk that Nvidia’s guidance for the current quarter may not be as lofty as some of the more aggressive Wall Street forecasts. On the subject of memory prices, we’ll be interested in what HP (HPQ) has to say on the matter and the expected impact on PC demand in the back half of the year.

On the other hand, when a competitor lifts its prices by double-digits that can bring an opportunity for custom AI silicon competitors such as Amazon (AMZN), Google (GOOGL) and others. We’ll want to carefully parse forward guidance comments not only from Nvidia this week, but also Marvell (MRVL). We expect Marvell CEO Matt Murphy will shed more light on the expanded relationship with Google. We could see some knee-jerk reactions between NVDA, MRVL and Broadcom (AVGO) shares this week, but our focus will remain on the overall supply-demand equation.

4. Nvidia is planning to use a $6 billion deal it struck this week to build one of the world’s most powerful open-weight AI models, one that would compete with Chinese heavyweights like DeepSeek and Kimi K3, according to people familiar with the matter. The chip giant’s licensing deal with the AI startup Poolside is also set to present a direct challenge to frontier U.S. AI companies including OpenAI and Anthropic, since open-weight models are generally far cheaper to operate and allow easy customization. (WSJ) Anthropic’s US customers are using cheaper alternatives to its most powerful AI tool, raising questions about the group’s high-spending business model ahead of what is expected to be the biggest IPO of all time. Spending on Fable 5, Anthropic’s largest and priciest model, has plateaued at only about 11 per cent of overall outlay on the company’s tools, more than two months after its release, according to spending data from 70,000 companies collected by payments group Ramp. (FT)

To Nvidia’s investment in Poolside, we’ll add it is negotiating an investment in Perplexity at a valuation above $30 billion, more than 50% higher than the company’s last funding round a year ago. Those deals follow ones with Groq and Enfabrica, and they all are likely to result in revenue dollars back to Nvidia as it leverages its balance sheet to shore up its competitive position. We should, however, expect this to renew concerns over circular financing, but our focus remains on AI adoption and usage levels, both of which continue to rise. When that slows and we start to see the number of funded AI companies go under, that is when a rising tide may not continue to lift all boats.

We view Nvidia similar to the way many used to see Qualcomm (QCOM) as the arms merchant first for the mobile phone industry and then smartphones. Continuing the analogy, strong demand and Qualcomm’s chip and IP revenue streams led competition to emerge that over time helped change the industry’s OEM landscape. We’ll be mindful of that as we assess AI model share shifts and success at AI chip efforts by the likes of Amazon, Google, Marvell and Broadcom.

5. Xiaomi Corp. launched a mobile processor for its marquee devices, putting pressure on Qualcomm Inc. and MediaTek Inc., which for years supplied the key component to the Chinese company. (Bloomberg)

While Xiaomi may not be the biggest player in the global smartphone market with its estimated 12% market share in Q2 2026, efforts to develop its own chips is at least another bump in the road in Qualcomm’s effort to recast itself. The company’s modem business with Apple (AAPL) is set to wind down in the coming quarters, and memory constraints are a headwind for the PC business that is expected to intensify in H2 2026. Meanwhile, ramping AI chip capacity programs for Broadcom and Marvell raise questions over Qualcomm’s efforts in that arena. Time will tell if it’s more than crumbs, but, in our view, the next few quarters could be a tough one for the company.

6. Boeing engineers and technical workers overwhelmingly rejected the U.S. plane maker’s four-year contract offer, union officials said on Friday. The 17,000 members of SPEEA, the Society of Professional Engineering Employees in Aerospace, also ‌voted convincingly to give the negotiating team the power to declare a strike when the contract expires on Oct. 6, the union said. (Reuters)

This development explains some of the pressure we saw in Boeing (BA) shares on Friday. Given the strength in the company’s backlog and efforts to driver higher production levels, we’re not surprised the union is looking for a better deal. We also see there is ample time to work one out before the contract expires in early October. That said, estimates put direct factory labor as a percentage of overall costs to build an aircraft in the low single-digits, largely because the bulk of Boeing’s costs go toward purchased parts and subassemblies from suppliers. We have room to add to the Portfolio’s Boeing position, and we’ll continue to pick our spots in doing so.

And union contracts negotiations aren’t only going on at Boeing. UAW members voted down an offer from Deere (DE) to extend its union contract by two years. The proposal would have extended the current contract from 2027, when it is set to expire, to 2029.

7. Economic data today per TipRanks: Chicago Fed National Activity Index (July).

8. Companies reporting today per TipRanks: AM – Napco Security (NSSC), PDD Holdings (PDD).