Tech led US stocks on Tuesday as a key consumer inflation print showed inflation accelerated in June, big banks kicked off earnings season, and Nvidia was set to receive a green light for trade with China from the Trump administration.

Treasury Secretary Scott Bessent’s comments and news of the resumption of H20 chip sales to China have excited Wall Street.

For strategists at JPMorgan Chase & Co. and Goldman Sachs Group Inc. as well as money managers in Hong Kong and Singapore, an opaque term has suddenly emerged as the catchphrase for deciphering Chinese policy intentions and navigating the stock market.

In April, the Trump administration blocked Nvidia from selling H20 GPUs in China, a decision that has already cost the company billions of dollars in revenue. Nvidia recently filed applications to resume selling H20 GPUs in China and has reportedly received assurances from the U.

Nvidia remains the dominant AI chipmaker in the market, but where is the stock headed for the rest of this year and into the next?

China Weighs Stock Market Rescue Package Backed by $278 Billion. China considers offshore money for stabilization fund: sources; Some policy measures could come as soon as this week

While there's still significant risk on the geopolitical front, allowing the sale of capable AI processors to China suggests the potential for a significant improvement in U.S. trade relations. If so, AMD stock could continue to see bullish business-specific catalysts in addition to valuation tailwinds for the broader market.

The Dow Jones index wavered Tuesday after the CPI inflation report. Nvidia stock surged on AI chip sales to China.