Week in Review: Trade Wars, Central Bank Pivots, and the AI Wealth Surge

The Quick Take

• US-Canada trade relationship hits 30-year low as 25% tariffs bite into cross-border supply chains
• Japan CPI acceleration pushes BOJ toward another rate hike, rattling yen carry trades globally
• Nvidia overtakes Apple as S&P 500's largest holding as AI capex supercycle shows no signs of slowing

The week's defining macro story was the accelerating breakdown in US-Canada trade relations, with 25% tariffs on Canadian goods pushing the Canadian dollar to a 30-year low and triggering a fresh round of supply chain stress across automotive, energy, and agriculture sectors. Cross-border freight volumes fell sharply as manufacturers began rerouting supply chains away from Canada-dependent inputs, creating second-order pressure on US domestic producers reliant on Canadian intermediate goods. Equity markets in both countries absorbed the shock unevenly: Canadian financials and industrials led declines, while US defense and domestic manufacturing names outperformed. The tariff standoff has now persisted long enough to show up in hard economic data, with Canadian export volumes falling for the third consecutive month.

Japan's latest CPI print — accelerating to levels last seen in the late 1990s — reinforced the Bank of Japan's tightening trajectory, with markets now pricing a 75% probability of another rate hike at the October meeting. Yen carry trades unwound sharply through Thursday, creating contagion pressure on emerging market currencies across Southeast Asia and reinforcing a defensive posture heading into the weekend. Separately, investors positioned cautiously ahead of Jackson Hole, where Federal Reserve Governor Warsh is expected to deliver remarks that could reframe the Fed's rate path narrative. With services inflation remaining sticky, analysts are divided on whether a September cut is still live — the Warsh speech could settle that debate or deepen the uncertainty.

Nvidia's formal ascension as the S&P 500's largest component by market capitalization — surpassing Apple for the first time — cemented the AI capex supercycle as the week's most durable equity theme. Warren Buffett's Berkshire Hathaway, sitting on a record cash pile exceeding $300 billion, has conspicuously avoided the AI buildout frenzy, creating a striking divergence between the market's largest passive holding and its most-watched active allocator. Meanwhile, the humanoid robotics sector attracted fresh institutional attention as Agility Robotics moved closer to a public market debut. Looking ahead, the key catalysts are Warsh's Jackson Hole speech, Japan's machinery orders on Monday, and US durable goods data on Wednesday — any hawkish surprise from Jackson Hole could reprice the September Fed meeting overnight.

Synthesized from 930 weekly articles.