The U.S. government is granting Intel up to $7.87 billion to help fund new chip plants in four states, the largest award in the Biden administration program aimed at reviving American chip-making. The funds are less than the $8.5 billion estimated for Intel in the preliminary award in March. That is because of previously announced funding of up to $3 billion to build secure facilities producing microchips for U.S. military and intelligence applications, according to senior administration officials. The grant money, set aside under 2022’s Chips Act, aims to fund a resurgence of U.S. manufacturing to counteract Covid-era supply-chain disruptions and address growing geopolitical tensions with China. Much of the world’s chip production has shifted to Asia in recent decades, leaving the U.S. with around 12% of the world’s manufacturing in 2020. The funds will be disbursed to Intel based on specific milestones, and Intel will get at least $1 billion in funds later this year, the administration officials said. Under the funding agreement, Intel has agreed to not engage in stock buybacks for five years, according to the Commerce Department.

After a weak start and a subsequent long spell in negative territory, the Switzerland market briefly moved above the flat line around mid afternoon on Tuesday but retreated soon and finally ended the day's session with a moderate loss. The benchmark SMI closed down 45.71 points or 0.39% at 11,632.88, after scaling a low of 11,590.67 and a high of 11,690.90 intraday. UBS Group closed down 2.1%, weighed down by a Reuters report that the lender's Chinese joint venture partner Beijing State-owned Asset Management is auctioning off its 33% stake in UBS Securities for 1.5 billion yuan. The sale potentially paves the way for the Swiss banking group to take full control of the joint venture, in which it owns a 67% interest. Schindler Ps and SIG Group lost about 2% and 1.9%, respectively. Holcim closed down 1.51%, while Sika, Lindt & Spruengli, VAT Group, Swisscom, ABB, Geberit, Roche Holding, Swiss Life Holding and Sandoz Group ended lower by 0.8 to 1.1%. Sonova, Adecco, Julius Baer, Givaudan and Straumann Holding also closed weak. Alcon climbed about 1.8%. Richemont advanced nearly 1%, and Lonza Group gained 0.84%. Trump said he would impose 25% tariff on all products from Mexico and Canada on his first day in office, blaming the countries for the influx of illegal immigrants and illicit drugs into the U.S.

Europe
European stocks closed weak on Tuesday as trade war fears resurfaced after U.S. President-elect Donald Trump pledged to impose tariffs on all imports from Mexico, Canada and China immediately after taking office in January 2025. This is in response to illegal immigration and 'crime and drugs' coming across the border from these countries to the United States, according to him. French political tensions also weighed on markets after far-right leader Marine Le Pen said on Monday that she could bring down France's minority government by the end of the year unless changes are made to the country's budget bill. Meanwhile, traders awaited the release of the FOMC minutes later in the day for insights into the Fed's policy path. The pan European Stoxx 600 ended down 0.57%. The U.K.'s FTSE 100 closed down 0.4%, Germany's DAX and France's CAC 40 settled lower by 0.56% and 0.87%, respectively. Switzerland's SMI finished 0.39% down. Among other markets in Europe, Austria, Belgium, Finland, Ireland, Netherlands, Norway, Poland, Portugal, Russia, Spain, Sweden and Turkiye closed weak. Denmark, Greece and Iceland ended on a positive note. In the UK market, Beazley, ICG, Glencore, Rentokil Initial, Lloyds Banking Group, Prudential, Weir Group and Halma closed down 2 to 3.6%. Persimmon, Rio Tinto, Mondi, Berkeley Group Holdings, JD Sports Fashion, B&M European Value Retail, Experian, Barratt Redrow, Frasers Group, Kingfisher and Legal & General lost 1.4 to 2%. Melrose Industries rallied 7.7%. Intertek Group climbed about 3.3%. Imperial Brands, Scottish Mortgage, WPP, Pershing Square Holdings, Sage Group and Compass Group gained 1 to 2%. Halfords jumped nearly 15%. The bicycle and car products retailer has asked for more business support from the government to cope with the cost implications from the recent U.K. budget. In the German market, Daimler Truck Holding ended nearly 6% down. Bayer closed down 4.8%. Volkswagen, Fresenius Medical Care, Zalando, BASF, Deutsche Post, Beiersdorf, Siemens Energy, Fresenius, BMW, Mercedes-Benz, HeidelbergCement and Deutsche Bank ended lower by 0.9 to 2.5%. MTU Aero Engines gained about 2%. Rheinmetall and Puma also closed with strong gains.

United States
After turning in a mixed performance early in the session, the major U.S. stocks all moved to the upside over the course of the trading day on Tuesday. The Dow recovered from early weakness to end the day at another new record closing high. The Dow fell by as much as 0.7 percent in early trading but ended the day up 123.74 points or 0.3 percent at 44,860.31. The S&P 500 also climbed 34.26 points or 0.6 percent to a record closing high of 6,021.63, while the Nasdaq rose 119.46 points or 0.6 percent at 19,174.30. The higher close by the major averages came as traders shrugged off President-elect Donald Trump's latest threats to impose increased tariffs on Mexico, Canada and China. In a post on his social media platform Truth Social, Trump said he would impose a 25 percent tariff on all products from Mexico and Canada on his first day in office, blaming the countries for the influx of illegal immigrants and illicit drugs into the U.S. Software stocks turned in a strong performance on the day, driving the Dow Jones U.S. Software Index up by 1.4 percent to a record closing high. Utilities and pharmaceutical stocks also saw considerable strength, with the Dow Jones Utility Average and the NYSE Arca Pharmaceutical Index climbing by 1.3 percent and 1.2 percent, respectively. On the other hand, housing stocks moved significantly lower, dragging the Philadelphia Housing Sector Index down by 1.8 percent. Zoom Communications posted better than expected third-quarter financials on Monday. Zoom reported third-quarter adjusted earnings of $1.38 a share on revenue of $1.18 billion. Analysts surveyed by FactSet were expecting the video communications platform to report earnings of $1.31 a share on revenue of $1.16 billion. In the same period last year, Zoom posted earnings of $1.29 a share on revenue of $1.14 billion.

Asia
The trend on the stock markets in East Asia and Australia was mixed on Wednesday. In Tokyo, the yen put the brakes on. It continued its upward trend from the previous day and rose to 152.72 per dollar. At the high for the day at the beginning of the week, it was still 154.30. Trade sources say that the yen is currently being sought in its function as a safe haven in view of the uncertainty caused by the announced US tariff increases. In addition, Japan is also on course to raise interest rates, while elsewhere interest rates are falling.

Bonds
In the U.S. bond market, treasuries gave background after soaring in the previous session. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, rose 3.7 basis points to 4.302 percent.

Analysis
Bank of America raises Siemens Healthineers target to 60 (57) EUR/Buy – Trader
UBS raises Grand City Properties target to 12 (11) EUR/Neutral – Trader
Deutsche Bank lowers Air France-KLM target to EUR 8.50 (10) – Hold

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