Key Takeaways
- President Donald Trump announced that Intel (INTC) has agreed to a deal for the U.S. government to take a 10% equity stake in the chipmaker, a move that sent Intel shares surging by as much as 6.6% on Friday.
- Federal Reserve Chair Jerome Powell signaled a potential interest rate cut as early as September, acknowledging a "challenging situation" with rising employment risks and persistent inflation, even as President Trump continued his public criticism of the Fed's policy.
- Trump set a two-week deadline to assess peace talks between Russia and Ukraine, expressing dissatisfaction with the current progress and hinting at significant decisions, including potential sanctions or tariffs, if a resolution is not reached.
- The Intel deal represents a significant government intervention, converting $10.86 billion in federal grants from the 2022 CHIPS and Science Act into an equity share, marking one of the largest such actions since the 2008 auto industry bailout.
President Donald Trump made significant financial and geopolitical announcements on Friday, revealing a deal for the U.S. government to acquire a 10% equity stake in chipmaker Intel (INTC) and setting a two-week deadline for progress in Russia-Ukraine peace talks. Concurrently, Federal Reserve Chair Jerome Powell hinted at a possible interest rate cut in September, navigating persistent criticism from the President.
Trump's Intel Deal and Market Reaction
President Trump confirmed on Friday that Intel (INTC) has agreed to a deal where the U.S. government will take a 10% equity stake in the company. This unprecedented move is poised to be formally announced on Friday, according to sources familiar with the plan. The agreement involves converting up to $10.86 billion in federal grants, initially pledged under the 2022 CHIPS and Science Act, into an equity share, potentially making the government one of Intel's largest shareholders.
The news propelled Intel's shares (INTC) to extend gains by as much as 6.6% during Friday's trading, building on earlier advances. This surge reflects investor optimism regarding robust government backing for the struggling chipmaker, which has faced challenges in regaining its technological edge and attracting customers for new factories. The deal is part of a broader Trump administration strategy to enhance domestic semiconductor production and reduce reliance on foreign supply chains, though critics have raised concerns about government intervention in private enterprise.
Fed's Stance on Interest Rates Amid Trump's Pressure
Federal Reserve Chair Jerome Powell, in his closely watched speech at the Jackson Hole Economic Policy Symposium on Friday, indicated that a potential interest rate reduction could occur during September's central bank meeting. Powell acknowledged a "challenging situation" with mounting concerns about employment conditions and persistent inflation risks. He stated that with policy in "restrictive territory," the "baseline outlook and the shifting balance of risks may warrant adjusting our policy stance."
This signal comes despite continuous and aggressive criticism from President Trump, who has repeatedly called Powell "too late" in reducing interest rates and has even labeled him a "numbskull" and "moron." Trump has argued that the Fed's current interest rate range, maintained between 4.25% and 4.50% since December, is detrimental to the housing industry and the broader economy. Powell's remarks, however, emphasized the Fed's data-driven approach and its commitment to ensuring that tariffs do not lead to sustained inflation.
Geopolitical Tensions: Russia-Ukraine Conflict
President Trump also addressed the ongoing Russia-Ukraine conflict, setting a two-week timeframe for assessing peace talks. He expressed dissatisfaction with the current state of discussions, stating, "I'm not happy about what's happening in Russia-Ukraine talks." Trump indicated that within this period, a clear direction would emerge, and if peace prospects falter, the U.S. might "take a different tack."
The President suggested that the decision regarding Russia would be significant, potentially involving "massive sanctions or massive tariffs or… do we do nothing and say it's your fight." This follows a recent summit with Russian President Vladimir Putin in Alaska, which failed to yield an accord, and subsequent meetings with Ukrainian President Volodymyr Zelenskyy and European allies. However, Russian Foreign Minister Sergey Lavrov cast doubt on the readiness for a Putin-Zelenskyy summit, claiming the agenda was "not ready at all" and that Ukraine did not seem interested in "long-term" peace. Zelenskyy, conversely, accused Moscow of trying to "wriggle out" of a meeting and not wanting to end the war.
Broader Economic and International Remarks
In other remarks, Trump mentioned considering New York and Chicago as cities to help, and indicated a willingness to deploy regular military forces in Washington D.C. if needed. He also expressed a desire to maintain "very good" relations with Canada.
Separately, expectations for German business confidence in August showed mixed signals. While some anticipated an increase following the EU-US trade deal, others projected the first decline this year, driven by disappointment over the trade agreement and Germany's economic performance in Q2 2025. The Ifo business expectations index for Germany had previously hit a high in July 2025, buoyed by the prospect of a trade agreement capping US tariffs on EU imports at 15%.
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.