Key Takeaways
- Global lithium prices surged after China's Jianxiawo mine, a significant supplier contributing approximately 3% of global output, suspended operations due to an expired permit, sparking hopes of tighter supply and price recovery.
- Oil prices steadied near two-month lows after last week’s 5% drop, as markets anticipate a crucial meeting between President Trump and President Putin that could pave the way for a Ukraine deal and ease sanctions on Russian crude.
- The U.S. and China agreed to extend a pause in tariff hikes, preventing a surge in levies on the world's two largest economies and offering a 90-day reprieve from potential trade escalation.
- Nvidia (NVDA) and AMD (AMD) will pay a 15% revenue cut to the U.S. government from their AI chip sales to China, a highly unusual condition for obtaining export licenses previously banned over national security concerns.
- Major U.S. stock indices closed lower, with the Dow Jones (DJI) falling 0.51%, the S&P 500 (SPX) down 0.26%, and the Nasdaq (IXIC) declining 0.41%.
Global markets are reacting to a mix of geopolitical developments, commodity supply shocks, and evolving trade policies. Lithium stocks saw a significant boost following a key Chinese mine shutdown, while oil prices remained subdued ahead of a highly anticipated meeting between U.S. and Russian leaders. Meanwhile, a new, unprecedented agreement between the U.S. government and major chipmakers Nvidia (NVDA) and AMD (AMD) has emerged, impacting their sales to China.
Lithium Market Reacts to Mine Closure
Lithium stocks experienced a sharp rally today after China's Contemporary Amperex Technology Co Ltd (CATL) announced the suspension of operations at its Jianxiawo lithium mine in Jiangxi province. The mine, which contributes approximately 3% of the world's total forecast lithium output in 2025, ceased production due to an expired mining permit on August 9, 2025. This unexpected halt, expected to last at least three months, has sparked optimism among investors for tighter supply and a potential recovery in lithium prices, which had seen significant volatility since July. Following the confirmation of the shutdown, lithium prices surged approximately 9% to ¥75,000 yuan. U.S.-listed shares of lithium companies like Albemarle (ALB) jumped over 8%, Sociedad Quimica (SQM) climbed over 6%, and Lithium Americas (LAC) rose nearly 9%. Chinese and Australian lithium producers also saw sharp gains, with Ganfeng Lithium ((/stock/002460)) jumping over 8% and Liontown Resources (LTR) surging as much as 25%.
Oil Steadies Ahead of Key Geopolitical Talks
Oil prices remained near two-month lows, stabilizing after a 5% drop last week, as market participants keenly await a meeting between U.S. President Donald Trump and Russian President Vladimir Putin. The summit, scheduled for August 15 in Alaska, is anticipated to discuss a potential Ukraine peace deal, which could lead to an easing of sanctions on Russian crude and impact global oil supply. West Texas Intermediate (WTI) crude held near $64 a barrel, while Brent crude futures were around $65.88 a barrel. Traders are monitoring the outcome closely, as a resolution could diminish the geopolitical risk premium currently factored into oil prices.
US and China Extend Tariff Pause
In a move to de-escalate trade tensions, the United States and China have agreed to extend a pause in tariff hikes for another 90 days, pushing back the previous August 12 deadline. This extension prevents an immediate surge in levies on goods exchanged between the world's two largest economies, offering a crucial window for further negotiations. The agreement follows recent trade talks in Stockholm, where both sides discussed working towards extending the pause. Prior to this extension, the U.S. had threatened tariffs of up to 245% on Chinese goods, with China retaliating with threats of 125% levies on U.S. products. Current baseline tariffs stand at 10% for Chinese imports to the U.S. and around 30% for U.S. exports to China.
Nvidia and AMD Agree to Revenue Share on China Chip Sales
In an unprecedented development, President Donald Trump has defended a new agreement under which Nvidia (NVDA) and AMD (AMD) will pay a 15% cut of their revenue from AI chip sales to China to the U.S. government. This "revenue sharing" arrangement is a condition for obtaining export licenses for advanced AI chips, such as Nvidia's H20 and AMD's MI308, which were previously banned by the Trump administration in April over national security concerns. Analysts suggest this highly unusual deal could funnel more than $2 billion to the U.S. government if sales return to previous levels, with Nvidia's H20 chips alone projected to generate $15 billion in sales to China and AMD's MI308 chips $800 million. The deal has drawn criticism, with some experts questioning whether it compromises national security for financial gain.
U.S. Stock Markets Close Lower
Major U.S. stock indices concluded the trading day in negative territory. The S&P 500 (SPX) closed down 16.85 points, or 0.26%, settling at 6,372.60. The Nasdaq (IXIC) Composite declined 87.30 points, or 0.41%, to 21,362.72. The Dow Jones (DJI) Industrial Average saw a drop of 223.35 points, or 0.51%, closing at 43,952.26.
US Steel Clairton Plant Incident Under Investigation
U.S. Steel (X) confirmed an incident at its Clairton Plant involving Coke Oven Batteries 13 and 14, stating the plant remains stable and an investigation is underway. While the company indicated stability, reports from earlier this year and historical records indicate that incidents at the Clairton Coke Works have previously involved explosions, emissions, and injuries, leading to ongoing monitoring by health authorities.
Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications.