CNBC Daily Open: Washington escalates on two fronts; Nvidia earnings in focus

Hello, this is Anniek Bao writing to you from Singapore. Welcome to another edition of CNBC's Daily Open.

Two fights Washington has been building toward this year came to a head Monday.

The Trump administration rolled out its toughest sanctions campaign yet against Iran and made clear China won't be spared, while the U.S.-Canada trade relationship deteriorated further as Washington threatened to double auto tariffs to 50%.

Markets, meanwhile, are bracing for more tests this week: Nvidia's earnings on Wednesday, an inflation reading, and the Fed's Jackson Hole symposium.

Bessent unveils Iran sanctions plan

The Trump administration is threatening a forceful economic blow to force capitulation from Iran, which has long refused to bow to U.S. demands despite months of military hostilities and decades of sanctions.

Treasury Secretary Scott Bessent threatened economic punishment against any country doing business with Iran as part of what he called an "economic D-Day" campaign to isolate the Islamic Republic.

"We are launching an economic onslaught against Iran's financial connections around the globe," Bessent said at a press conference on Monday.

The U.S. will start by sharing deadlines with individual countries to "shut down activities we have identified," Bessent said. "Any entity that facilitates money laundering on behalf of Iran will be removed from the U.S. dollar system," he said. "The clock just started ticking."

U.S.-Canada trade war escalates

The U.S.-Canada trade relationship deteriorated further Monday, with President Donald Trump vowing to double tariffs on Canadian autos, trucks, auto parts and steel to 50%, effective Jan. 1, 2027, following a breakdown in trade negotiations last week.

"Canada has been ripping off the United States of America for years," Trump wrote in a Truth Social post, accusing the longtime trading partner of hurting U.S. farmers through its own tariff policies.

U.S. Trade Representative Jamieson Greer shifted the blame to Ottawa in an interview with CNBC on Monday. "They wanted more," Greer said, arguing that Canada's domestic politics derailed the deal that was close to completion.

Canadian Prime Minister Mark Carney similarly accused the U.S. of upending the deal by proposing "last-minute changes" that were "unfair, uneconomic."

Markets wobble into a big week

Wall Street traders started the week on a downbeat note.

The S&P 500 index fell 0.28%, while the Nasdaq Composite lost 0.76%, weighed down by chip stocks, while the Dow Jones Industrial Average bucked the trend, edging up 0.26%.

Stock futures steadied as investors turned cautious ahead of Nvidia's earnings, which could set the tone for the AI trade heading into the fall.

Traders will be keeping a close tab on inflation as well, with the personal consumption expenditure price index reading for July out on Wednesday.

Investors have another date circled with Fed Chairman Kevin Warsh, who is taking the stage at Jackson Hole, Wyoming, on Friday. His remarks could send fresh ripples through both equities and Treasuries.

Bessent eyes the Treasury's war chest

Bessent could tap the Treasury General Account — which holds close to $1 trillion — to help fund an expanded bond-buyback program, according to two senior Treasury officials. Using the TGA would provide the Treasury with considerable firepower to influence long-term bond yields. 

Treasury has already moved to expand its buyback operations, doubling the size of liquidity-support purchases in the 10- to 30-year sector ⁠over the next quarter to at least $4 billion.

The department made no mention of how it would fund the purchases, prompting speculations that it would do so by selling short-term bills.

Groq racks to come online

Nvidia said the first computing racks built on technology from its $20 billion Groq deal, the Groq 3 LPX, will be operational later this year, with Nebius as the launch customer.

In December, Nvidia bought assets from the AI chip startup for about $20 billion in its largest deal on record and hired Groq founder Jonathan Ross, president Sunny Madra and a group of engineers.

The race to get Groq chips into customers' hands underscores the growing premium on low-latency inference, the speed that keeps AI agents feeling responsive, especially for coding tools.

With Nvidia's earnings due Wednesday, investors will be listening for how much of that inference opportunity — and the Groq investment — shows up in the guidance.

— Anniek Bao

Here's what Jim Cramer says stock investors need to know about the bond market

CNBC's Jim Cramer said Monday investors can't ignore the bond market as stubborn inflation and surging corporate borrowing are keeping long-term rates elevated and pressuring stocks.

"Normally, I don't like to talk about bonds, because you don't want to hear about bonds," the "Mad Money" host said. "Unfortunately, it's very important now that long-term interest rates are on the rise."

The 10-year Treasury yield has climbed from below 4% in February to nearly 4.7%, while the 30-year Treasury yield recently topped 5.3%, its highest level in nearly two decades. Concerns intensified earlier this month when a 30-year Treasury auction drew weaker demand than the prior month, despite elevated yields.

— Alexa LoMonaco