Nvidia Surprises in Return to China: 8 Key Items Shaping the Stock Market Wednesday

These are the early headlines and other items poised to influence the market at the start of the trading day. As we share this collection of market drivers, U.S. equity futures point to a mixed market open later this morning.

1. Iran has weighed attacking US military targets in Europe should Donald Trump escalate the war, according to people close to the regime, as Tehran considers its options to increase the stakes of the conflict. Two regime insiders told the FT that Iranian forces have assessed striking US assets in south-eastern European countries such as Bulgaria, which last month approved the use of its Bezmer air base for US refueling aircraft. (FT)

Several independent U.S. oil producers are expected to sign production contracts with Venezuela’s state-run oil company in the coming days, according to three industry representatives familiar with the plans — a step forward for the Trump administration’s efforts to boost production in the beleaguered South American nation. (Politico)

Weighing an attack is one thing, carrying it out is another. Should Iran attack U.S. military targets in Europe there is a high probability it would further escalate the conflict, and that in turn would drive oil prices and uncertainty higher. While the thought is that oncoming production capacity from Venezuela would help keep a lid on oil prices, the reality is that over the next year, those investments are only expected to add up to 300,000 barrels a day to Venezuela oil production. In its August 2026 update, the U.S. Energy Information Administration now sees ongoing disruptions of about 0.6 million barrels per day lasting through the end of next year from the Middle East.

2. President Trump said he would pause a 50% tariff on certain goods from Canada for three days while the two countries seek to finalize an agreement… The new 50% tariff was set to cover $20 billion worth of Canadian goods — about 5% of Canada’s annual exports to the U.S. — ranging from hockey sticks and electronics to plastics and building materials. (WSJ)

The tariffs that were set to be imposed would have been the first use of Section 338 of the Tariff Act of 1930 by the White House. The law allows the White House to implement duties of up to 50% on any foreign trading partner that “discriminates” against U.S. commerce. A potential sticking point in the talks between the two companies is automobile duties, with U.S. reportedly not want to go below 15% from the current 25%.

The postponement of tariffs would last until the end of the day Friday, and that means one way or another there should be more news to come on this front. The outcome will likely shape similar Section 338 negotiations with other countries.

3. Target Corp. lifted its full-year guidance after results outpaced estimates in the latest quarter, suggesting the big-box retailer may be moving past a lengthy sales slump. The company now expects net sales to increase about 5% in the current fiscal year, which ends in early 2027 — a percentage point higher than the previous guidance. Target also raised its adjusted earnings target after second-quarter sales surpassed analyst estimates. (Bloomberg)

While the markets seem to be receiving Target’s (TGT) quarterly earnings report on Wednesday morning in a positive fashion, we’re not as excited given the company’s top-line for the reported July quarter rose 5.3% year over year. That compares to the 6.6% year-over-year figure for Retail-only sales for the same three-month period found in the July Retail Sales report.

While Target likely outperformed in other areas, such as snacks, beverages and grocery, those tend to be lower margin items for the company. It’s also an area where it will face stiff competition from the likes of Kroger (KR), Walmart (WMT) and others. We’ll have more to say on Target’s results and guidance after Wednesday morning’s earnings call.

4. Home-improvement retailer Lowe’s said on Wednesday it now expects no growth in annual comparable sales, ‌as consumers remained cautious on expensive renovation projects and discretionary spending… Higher mortgage rates and limited housing turnover have continued to weigh on demand for larger projects such as kitchen remodels, bathroom renovations and flooring installations. (Reuters)

Toll Brothers reported 2,508 contracted homes in the third quarter, falling short of the 2,610 analysts had expected, according to FactSet. Homes contracted today are future deliveries. They may also just be awaiting commentary from management. Toll Brothers will discuss results on a call with investors at 8:30 a.m. Eastern on Wednesday. (Barron’s)

When we review the earnings call comments from Toll Brothers (TOL) later on Wednesday morning, we’ll be focused on what is said about the use of incentives to win homebuyers. We’ll also be listening for what is said about the move to structured products like the ones supplied by Builders FirstSource (BLDR) as Toll and other homebuilders look to manage costs. Meanwhile, the comments from Lowe’s (LOW) about cautious repair and remodel spending is likely to weigh on building product companies such as Masco (MAS), Sherwin Williams (SHW), Mohawk Industries (NHK) and Interface (TILE).

5. Samsung Electronics has raised prices for some advanced contract chipmaking services by up to 15% for new orders, two people familiar with the matter said, as demand for AI chips tightens ‌capacity in a business long dominated by TSMC. Demand from Chinese customers has been particularly strong, but Samsung has been unable to meet all orders because it must serve U.S. customers and reserve part of its capacity to support its own chip production… (Reuters)

Tight capacity is a boon for pricing and that is what Samsung (SSNLF) and others in the chip industry are capitalizing on. It’s also a tailwind for bringing on incremental chip capacity, which is the Portfolio’s play with its position in Applied Materials (AMAT). Near term, the above is another reminder of the headwind blowing for PC, smartphone and other connected hardware companies as the chip sector focuses on meeting AI and data center demand.

6. Small batches of Nvidia’s H200 chips, one of the company’s most powerful AI ‌chips, have been allowed to enter mainland China, the Financial Times reported on Tuesday, citing two people with knowledge of the matter. ByteDance and Tencent have each received about 10,000 H200 processors in recent weeks, while a few other Chinese technology firms could soon secure similar shipments, the report said. Although the U.S. has cleared the companies to purchase up to 100,000 H200 chips each, Beijing wants them to keep the hardware outside mainland China to support the ‌growth of domestic chipmakers, according to the FT report. The report added that Chinese regulators have told companies they can ship the processors to Hong Kong, which operates outside mainland China’s customs border, and use them there. (Reuters)

An interesting workaround by Chinese regulators, but one that means Nvidia (NVDA) will start to recognize chip sales to China customers. Remember, that revenue potential was not baked into Nvidia’s guidance when it reported back in May. The timing of this development bodes well for the forward comments from Nvidia when it reports its quarterly results on August 26.

For the October 2026 quarter, the market is already forecasting EPS of $2.35 on revenue of $103.4 billion, with once again a wide revenue range between $92 billion to $112 billion in play. To the extent NVDA shares rally into that earnings report, odds are market whisper expectations for Nvidia’s guidance will do the same.

7. Economic data today per TipRanks: MBA Mortgage Applications (Weekly), EIA Crude Oil Inventories (Weekly), FOMC Minutes (July).

8. Companies reporting today per TipRanks: AM – Analog Devices (ADI), Estee Lauder (EL), Lowe’s (LOW), Target (TGT), TJX (TJX). PM – Coty (COTY), Nordson (NDSN), Webull (BULL), Wolfspeed (WOLD).

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At the time of publication, TheStreet Pro Portfolio was long AMAT, BLDR, TJX and NVDA.