CNBC Daily Open: A U.S. yen intervention dressed in euros

• The U.S. sold euros rather than dollars for yen intervention to prevent Japan from dumping large quantities of Treasurys, which could destabilize bond markets
• Amazon crossed $3 trillion market cap after strong earnings, benefiting from AI investment gains in OpenAI and Anthropic alongside tech peers
• HSBC reported 60% year-over-year profit growth with $10.1 billion in pre-tax profit, while Saudi Aramco beat expectations amid elevated oil prices from Middle East tensions

Summary

Key Development:

The U.S. reportedly sold euros instead of dollars to fund its yen intervention supporting Japan, marking a strategic shift from previous operations. This approach aims to avoid destabilizing sensitive Treasury markets and prevent Japan from dumping large quantities of U.S. Treasurys for unilateral intervention. The euro strengthened to 1.1558 against the dollar on Monday, its highest level in nearly two months.

Corporate Earnings Highlights:

• Amazon surpassed $3 trillion in market capitalization for the first time following better-than-expected results, benefiting from significant investment gains in AI companies OpenAI and Anthropic.

• HSBC, Europe's largest bank by assets, reported Q2 pre-tax profit of $10.1 billion, beating analyst estimates. Profit rose 60% year-over-year, driven by stronger banking net interest income and a $2.6 billion favorable impact from notable items.

• Saudi Aramco exceeded earnings expectations amid high oil prices and disruptions through the Strait of Hormuz. Results align with blowout quarterly profits reported by oil supermajors, benefiting from elevated fossil fuel prices during U.S.-Iran hostilities.

AI Competition:

Hugging Face CEO Clément Delangue warned that China is dominating the open-source AI model race and could match U.S. frontier model makers by year-end or 2027. He attributed China's advantage to collaborative ecosystems, while criticizing U.S. companies for "building in silos."

Market Implications:

The unconventional currency intervention strategy signals concerns about Treasury market stability, while tech and energy sectors continue benefiting from AI investments and geopolitical tensions driving oil prices higher.