Breakfast News: Copper Tariff Turmoil

Source: Image Created by Jester AI.

1. Trump Slaps Tariff on Copper Imports

S&P 500 and Nasdaq futures remain flat after President Donald Trump revealed a 50% tariff on copper imports and up to 200% on pharmaceuticals. Commerce Secretary Howard Lutnick said he expects the new copper rate -- matching the levies on steel and aluminum -- to take effect by the end of July, maybe Aug. 1. The president suggested pharma companies could have up to a year and a half to move production to the U.S.

• "The price is going to rise significantly." Plusmining consultancy founder Juan Carlos Guajardo predicted a lot of buying ahead of the tariff date, as the New York copper price climbed to a 24% premium over the global benchmark.
• "US copper producers would face significant shortages of supply." Copper importer Southwire said U.S. production "cannot increase fast enough to fill the supply gap," as costs for factories are already rising.

2. Starbucks Eyes Up China Sale

Potential buyers for a stake in Starbucks (SBUX 1.45%) China have made offers valuing the Chinese chain at up to $10 billion, says CNBC. The report suggests a fair valuation of $9 billion, based on an 8% contribution to total revenue and a Starbucks market cap of $108 billion.

• "We remain committed to China and want to retain a meaningful stake." The company could retain up to 30% of the Chinese business as part of its "Back to Starbucks" strategy reset, following a second quarter that saw revenue and earnings both miss Wall Street expectations.
• "I think they'd love to be partnering up with us." CEO Brian Niccol previously spoke of strong investor interest, as Luckin Coffee majority shareholder, Centurium Capital, and private equity firms Carlyle and KKR, have been named as possible bidders.

3. Merck's Verona Bid to Boost Pipeline

Pharma giant Merck (MRK 0.58%) is close to a deal to buy Verona Pharma (VRNA -4.65%) for around $10 billion, according to a Financial Times report. The acquisition would add COPD treatment Ohtuvayre to Merck's pipeline, with estimates suggesting U.S. sales could approach $4 billion by the mid 2030s.

• Patent cliff: A deal -- which the report says could be announced as soon as today -- would be Merck's largest since the 2023 takeover of Prometheus Biosciences for $10.8 billion. It would help offset a hit from blockbuster drugs patent expiry.
• Down 35% in 12 months: Merck stock has been falling as top-selling cancer drug Keytruda -- which generated 2024 revenue of almost $30 billion -- approaches the end of patents starting in 2028.

4. Super Micro Bets on European AI

Super Micro Computer (SMCI 4.25%) CEO Charles Liang, in an interview with CNBC at the Raise Technology Summit in Paris, said the company will accelerate its Europe investments and boost artificial intelligence (AI) server manufacturing in the region.

• "We continue to grow our fundamental technology." The company's servers, powered by Nvidia (NVDA 1.10%) chips, are used for training large AI models, and Liang says he expects growth opportunities "will be still very tremendous, very big."
• Third-quarter guidance miss: Super Micro stock is down 48% over the past 12 months, after the company reported Q3 revenue and earnings falls compared to the second quarter, though the CEO appears unfazed by short-term concerns.

Tom Gardner's Message to Investors

Motley Fool Co-Founder and CEO Tom Gardner just released a timely message about the state of investing and how he's thinking about markets today, including what he sees as the No. 1 investing mistake, where to invest today, and what his biggest question is right now. You won't want to miss Tom's candid perspective -- find out why one YouTube commenter said, "I'm going to put this on a loop and sleep to it!" [https://www.youtube.com/watch?v=dswPvAP-K9A]

5. Your Take

Apple (NASDAQ:AAPL) dominates the smartphone, tablet, and high-end laptop segment. Yet there's still plenty of competition -- and there are no sure things in business. If you were the CEO of Apple for a day, what's one thing you would do to improve the business? Become a member to hear what your fellow Fools are saying.