Highlights of the week: Powell speech, Meta and Google deal, EU accelerates with digital euro

Fed Chairman Jerome Powell gave hope for a rate cut in September at the annual economic forum in Jackson Hole. The White House confirmed the purchase of 10% of Intel. EU has accelerated work on the digital euro due to the passage of the U.S. Stablecoin Act. Meta struck a $10 billion deal with Google. Donald Trump met with Ukrainian President Vladimir Zelensky and European leaders in Washington. About the main events from August 18 to 22 - in our review.

US Federal Reserve Chairman Jerome Powell, speaking at an economic forum in Jackson Hole, hinted at a possible rate cut in September. "Over the course of this year, the U.S. economy has shown resilience amid sweeping changes in economic policy," he said. - The key rate is now 100 basis points closer to neutral than it was a year ago, the stability of the unemployment rate and other labor market indicators allows us to proceed cautiously as we consider possible policy changes."

The "dovish" signal of the head of the Federal Reserve System became a reason for the sharp growth of the US stock market. The main index of the U.S. market S&P 500 jumped by 1.65% in the course of trading, breaking a five-day decline. The Dow Jones blue-chip index soared by 1.5% and the Nasdaq Composite by more than 2%. Gold added more than 1%. The VIX index, which is called the "Wall Street fear index," collapsed 12%.

After Powell's speech, traders expect the probability of a rate cut at the Fed's September 16-17 meeting to be nearly 90%, although it was 80% a day earlier.

What else is there to read?

- Details of the Fed head's speech and Wall Street's reaction - in the Oninvest article "Powell did not rule out a rate cut in September. The main U.S. indices soared".

This week the details of negotiations between the administration of US President Donald Trump and Intel about getting a stake in the company became known. Bloomberg, citing sources, reported that it could be about 10%. The government wants to convert Intel's assistance in the form of grants under the CHIPS and Science Act into shares. Subsidies for commercial and military production Intel is $10.9 billion - about the same amount is worth 10% of the company at its current capitalization, writes Bloomberg.

Trump told reporters at the White House on Friday night that Intel had agreed to the deal, Bloomberg reported. Later, U.S. Commerce Secretary Howard Lutnick said the government had acquired a 10% stake in Intel, CNBC wrote.

As a result of the deal, the U.S. government will become the largest shareholder of the struggling chipmaker: Intel lost its position as a technological leader in the industry and has not yet regained it.

Not only the White House is claiming a stake in Intel - SoftBank has announced plans to invest about $2 billion in the company in exchange for its shares, which the chipmaker will issue to a Japanese investor. The purchase price is close to the market price - $23 per paper. Since the beginning of the year, Intel securities have risen in price by more than 23%.

What else is there to read about it?

- Why analysts doubt the success of the deal between the White House and the company - in the article by Oninvest correspondent Vladislav Osipov "Trump administration may get 10% of Intel shares. Why did the securities collapse?"

- The Trump administration is studying how, similar to Intel, to get stakes in other chipmakers. For more details, see "Trump targets stakes in Micron, TSMC and Samsung after Intel shares - Reuters" .

The EU has accelerated work on the digital euro after the US passed the GENIUS Act, a law aimed at developing stablecoins - tokens pegged to the dollar, the FT wrote, citing sources. The option of using public blockchains like Ethereum or Solana is not ruled out.

European officials fear that the GENIUS Act will accelerate the growth in the use of dollar-denominated tokens and believe the launch of the digital euro is necessary to protect the dominance of the single currency on the continent. If the digital euro runs on a public blockchain, it could be freely exchanged around the world, increasing the circulation and use of the currency.

Donald Trump met Monday in Washington with Ukrainian President Vladimir Zelensky and European leaders from Germany, France, Italy, Finland and the United Kingdom. Also present at the meeting were European Commission President Ursula von der Leyen and NATO Secretary General Mark Rutte.

They discussed the possibility of concluding a peace agreement between Russia and Ukraine, as well as security guarantees for Ukraine from European countries and the USA. The Financial Times wrote that during the talks, Ukraine offered to buy $100bn worth of US weapons from the USA using European financing.

After the talks, the US administration began preparations for a meeting between Russian President Vladimir Putin and Zelensky, US Secretary of State Marco Rubio said .

Trump said in an interview with radio host Todd Starnes on Thursday that he "may have to change tactics" in two weeks if a peace deal is not reached. Earlier, Russian Foreign Minister Sergey Lavrov said Russia should participate in discussions on security measures for Ukraine and security guarantees should be based "on the principle of collective security."

Several senior European officials and diplomats, on condition of anonymity, told Bloomberg they viewed the Russian foreign minister's comments as an attempt to delay the process and expressed doubt that the Russian leader was ready to conclude a peace deal.

What else is there to read about it?

- The ceasefire negotiations may influence the markets counterintuitively. Why - in the commentary by Askar Akhmedov, Investment Director at ATLAS Capital, "Markets are watching the negotiations on Ukraine. What could be the reaction of investors?"

Meta Platforms has agreed to buy cloud services from Google, The Information and Bloomberg reported, citing sources.

The company will pay a minimum of $10 billion over six years to use Google Cloud servers and storage. The company is third in the cloud market behind Amazon's AWS and Microsoft's Azure. Google confirmed the deal but did not disclose details. Meta declined to comment.

This is the first major cloud computing deal between the two companies. It will allow Meta to quickly provide its "superintelligence" team with computing power. Meta already has more than two dozen of its own data centers, with new ones under construction, including a 4 million-square-foot project in Louisiana. However, some of them will not be operational until several years from now.

Reuters reported in June that OpenAI, the creator of ChatGPT, had also agreed with Google to use its cloud service to train its AI models.

What else is there to read on this topic?

- Last week, OpenAI CEO Sam Altman backed Merge Labs, a startup developing brain-computer interfaces, which intensified its competition with Elon Musk's Neuralink. How the neural interface race is turning into a new battleground between Silicon Valley leaders is the subject of Oninvest columnist Roman Kutuzov's article "The Great Merger: Why Billionaires Get in Our Heads".

On Friday, June 22, it was reported that Nvidia is halting production of AI chips for China following Beijing's directive to local companies to stop purchasing them. The Information wrote that Nvidia asked the American Amkor Technology, which packs H20 AI chips for the Chinese market, and South Korea's Samsung Electronics, which supplies memory chips for them, to stop production. In addition, Reuters, citing sources, reported that Nvidia has also asked Foxconn to suspend work related to the H20 chip.

Earlier this month, it was reported that the White House authorized Nvidia and AMD to resume shipments of AI chips to China on the condition that they contribute 15% of those sales to the U.S. budget. But news of the suspension has cast doubt on the H20's return to the Chinese market, CNBC notes.

Nvidia did not deny the information: "We are constantly managing our supply chain to respond to market conditions," a company spokesperson told CNBC.

The U.S. and the EU in a joint statement revealed details of the framework trade agreement the partners announced in late July.

The EU will receive promised discounts on cars, pharmaceuticals and semiconductors, subject to legislative initiatives to reduce its own levies on manufactured goods from the U.S. and give preferential treatment to a range of U.S. agricultural and seafood products.

The U.S. has imposed a 15% rate on most European goods, including European pharmaceuticals, semiconductors and timber. Although Trump had previously threatened to impose a prime rate of 30%. Additional exemptions are possible in the future, the countries said in a statement. In addition, the U.S. will not reduce duties on European cars from the current level of 27.5% until the EU passes laws to reduce duties on U.S. goods.

The agreement has sparked complaints from European winemakers: with 15 percent duties, France alone will lose more than 1 billion euros a year, Bloomberg wrote. The document also failed to answer a number of key questions about how the EU will fulfill its promise to invest $600 billion in the U.S. or purchase about $750 billion of U.S. energy resources - including LNG, oil and nuclear products - by 2028.

Shares of cosmetics maker Estée Lauder fell sharply on Wednesday, August 20, following the release of its quarterly report and earnings outlook for the new fiscal year (ending June 30, 2026). The company expects U.S. duties to reduce its earnings by about $100 million. Estée Lauder forecast adjusted earnings per share in a range of $1.9 to $2.1, the midpoint of that range notably below analysts' consensus of $2.2 per share, Barron's noted.

For the quarter ended June 30, adjusted earnings came in at 9 cents per share, while revenue fell 12% year-over-year to $3.41 billion. Analysts surveyed by FactSet had forecast earnings per share in line with the company's forecast, but anticipated slightly lower revenue of $3.39 billion. Sales of skin care products fell 12%, makeup fell 5%, and hair care fell 10%. Perfumes were up 2%.

Weak demand in China and competition from other cosmetics sellers on platforms such as Amazon and TikTok have been headwinds for Estée Lauder this year. Still, the stock is up nearly 22% since the start of 2025, while the S&P 500 index has added 10%.

What else is there to read about Estée Lauder ?

- Investor Michael Burry, who predicted the mortgage crisis of 2007 - 2008, doubled his stake in Estée Lauder, compared to December 2024. Why he believed in the business, the net profit of which fell six times in three years - in the material of journalist Peter Kiryan "Heavy luxury storms the Internet: why Michael Burry sold everything but Estée Lauder".

This article was AI-translated and verified by a human editor