Evening digest: Trump drops Hormuz fee, DeepSeek eyes IPO filing

On Tuesday, President Donald Trump withdrew his proposed 20% fee on cargo shipments through the Strait of Hormuz in favor of investment commitments from Gulf states.

Chinese AI startup DeepSeek has begun preparing for an initial public offering while pursuing fresh private funding.

Meanwhile, gold prices climbed after softer-than-expected US inflation data boosted expectations of a less hawkish Federal Reserve, and oil settled at a one-month high as renewed US-Iran tensions kept supply concerns in focus.

Trump withdraws 20% Strait of Hormuz transit fee

President Donald Trump on Tuesday reversed his plan to impose a 20% charge on cargo shipments passing through the Strait of Hormuz, just a day after announcing the proposal.

Instead of collecting what he had described as a "United States Reimbursement Fee," Trump said Gulf states would make direct investments into the US economy.

He did not disclose the size of those investments or identify participating countries.

Speaking to reporters, Trump said representatives from Saudi Arabia, Qatar, Bahrain, Kuwait and the United Arab Emirates urged him to pursue financial commitments instead of introducing a transit fee.

The proposal had drawn criticism from traders, analysts and industry experts, who questioned both its practicality and its potential impact on global trade.

Some warned that any toll on one of the world's busiest oil shipping routes could set a precedent for similar charges elsewhere.

Oil prices briefly pared gains following Trump's announcement before recovering later in the session as geopolitical tensions remained elevated.

DeepSeek begins IPO preparations

Chinese artificial intelligence startup DeepSeek has started preparing for an initial public offering, with plans to file as early as this year for a potential listing in 2027, Bloomberg reported.

According to people familiar with the matter, the Hangzhou-based company is working with accounting and banking advisers while preparing its financial statements.

The company is also seeking additional private funding only weeks after completing a record $7 billion fundraising round.

DeepSeek is targeting a pre-money valuation of at least 480 billion yuan ($71 billion) and aims to raise at least 10 billion yuan, although the final amount could be significantly higher depending on investor demand.

Founded in 2023 and owned by Zhejiang High-Flyer Asset Management, DeepSeek gained international attention after developing an AI model that demonstrated strong performance while using fewer computing resources.

The company plans to continue investing heavily in computing infrastructure and AI research as it expands into agentic AI.

Gold climbs as softer inflation boosts Fed expectations

Gold prices rose more than 2% on Tuesday after US inflation data came in softer than expected, prompting investors to scale back expectations of near-term Federal Reserve rate hikes.

Spot gold traded at $4,052.14 per ounce during the afternoon session, while US gold futures settled at $4,057.80.

The US dollar weakened following the inflation report, making gold more attractive for holders of other currencies.

June consumer inflation slowed to 3.5% year over year from 4.2% in May, while core inflation remained unchanged on a monthly basis.

Traders subsequently reduced bets that the Federal Reserve would raise interest rates at its July meeting.

Despite the rally, analysts noted that renewed conflict between the US and Iran could keep inflationary pressures elevated through higher energy prices, potentially limiting further gains in gold.

Oil reaches one-month high on renewed US-Iran tensions

Oil prices settled at their highest levels in about a month as renewed military tensions between the United States and Iran heightened concerns over global crude supplies.

Brent crude rose 2.3% to settle at $85.29 per barrel, while West Texas Intermediate gained 2.1% to close at $79.78 per barrel.

Markets remained focused on developments around the Strait of Hormuz, through which roughly one-fifth of global oil supplies normally pass.

Although Trump abandoned the proposed transit fee, renewed hostilities and attacks on oil tankers continued to support prices.

Investors also monitored expectations for US crude inventories ahead of official government data.

Analysts estimated a draw of 2.7 million barrels for the latest week, which would mark another significant decline in stockpiles if confirmed.