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All eyes in the investment world were on Nvidia (NASDAQ:NVDA) today (August 28) as the tech giant prepared to release its eagerly anticipated Q2 2025 earnings report after the closing bell.

Amid growing concerns about overvaluation and potential market correction, Nvidia’s performance over the last few quarters has captured the attention of investors and analysts alike.

With high stakes and major implications for the broader market, the release of Nvidia’s Q2 earnings report is poised to have a substantial impact on the company’s trajectory and the tech sector as a whole.

Contextualizing Nvidia’s Q2 2025 results

While all the major tech stocks have seen dramatic price swings, Nvidia has been in a league of its own. After its Q1 earnings report in May exceeded analyst expectations, Nvidia has seen dramatic price fluctuations in its stock value throughout the summer. Investors have responded to a confluence of factors that have created uncertainty and volatility in the markets, such as fluctuating inflation data on a weekly basis and the ongoing speculation surrounding the overvaluation of AI stocks.

The technology sector has experienced a meteoric rise in recent years, with many tech companies achieving impressive growth and profitability. Nvidia has led the pack, accumulating a market capitalization of over US$3 trillion since the launch of ChatGPT in November 2022. Its stock price has also grown by over 160 percent year-to-date. However, this has led to concerns that AI stocks may be overvalued and susceptible to a correction.

Shortly after New Research analyst Pierre Ferragu downgraded Nvidia from “buy” to “neutral” on July 5, the company’s stock price exhibited heightened volatility, highlighted by a series of sharp reversals throughout the month.

Ferragu stated at the time that Nvidia stock is “getting fully valued” and that further growth “will only materialize in a bull case, in which the outlook beyond 2025 increases materially, and we do not have the conviction on this scenario playing out yet.”

By July 30, Nvidia had fallen by a total of 23.1 percent from its highest valuation that month. However, it rebounded the next day, adding US$329 billion to its valuation and ending July with a new record for single-day earnings.

Nvidia’s outsized position on the S&P 500 stock index has also been cause for concern. The company accounts for 6.67 percent of the market-capitalization-weighted index, trailing Apple by just 0.27 percent. Bloomgberg’s John Authers has likened Nvidia’s earnings reports to a macro event akin to the August 5 market rout that led the index to experience its largest single-day loss since 2022. On that day, Nvidia’s losses exceeded 15 percent compared to its closing price on August 2.

Challenges ahead for Nvidia

In addition to the stock market turbulence, Nvidia is grappling with critical factors that could impact its business. Sources for The Information reported on August 5 that engineering issues would delay the release of the company’s highly anticipated Blackwell chip series, adding pressure to an already turbulent market landscape.

The Blackwell delay has exacerbated concerns about Nvidia’s ability to deliver on the promises of its technology and meet the high expectations placed upon it by investors. The US Department of Justice is also reportedly investigating Nvidia for anti-competitive practices.

Nvidia’s customer base, which includes billion-dollar companies such as Google (NASDAQ:GOOGL), Meta (NASDAQ:META), and Microsoft (NASDAQ:MSFT), has invested significantly in Nvidia’s AI infrastructure, leading investors to grow increasingly cautious when these companies report earnings that often highlight further investment plans rather than immediate returns.

Analysts speculated ahead of Nvidia’s Q2 earnings report today that it could cause an over US$300 billion swing in its shares, with an anticipated stock move of nearly 10 percent — the largest in the last three years. Analysts predicted that earnings per share would increase to US$0.64 and revenue would reach US$28.7 billion.

NVIDIA’s Q2 results come in above analyst predictions

Nvidia’s Q2 2025 results for Q2 ending July 28, 2024 were released as the markets closed on Wednesday and revealed quarterly revenue of US$30.04 billion, a 15 percent increase from Q1 and a 122 percent increase year over year.

The company cited demand for its Hopper graphic processing units and anticipation for the Blackwell series as drivers of its performance in the second quarter. Data center revenue was US$26.3 billion, up 16 percent from last quarter and 154 percent year-over-year.

Earnings per share came in at US$0.67, 12 percent higher than Q1 and a 168 percent boost from Q2 2024. Both revenue and earnings per share came in above analyst expectations.

Nvidia also announced a second share repurchase authorization worth US$50 billion, adding to the US$7.5 billion remaining from its repurchase authorization in Q1 and bringing the total available to US$57.5 billion.

For its Q3 2025 period, the company projects revenue of around US$32.5 billion, plus or minus 2 percent.

Nvidia’s share price closed at US$125.61. The market’s initial reaction sent Nvidia stock up by over 2 percent immediately after the closing bell, only for it to fall by nearly 10 percent roughly 30 minutes after the report’s release. Its share price at 5:00 p.m. EST was US$120.50, a decline of over 4 percent.

Securities Disclosure: I, Meagen Seatter, hold no direct investment interest in any company mentioned in this article.

This post appeared first on investingnews.com

The NFL’s most exclusive club just let in new members.

At a special league meeting in Eagan, Minnesota, on Tuesday, National Football League owners voted in favor of allowing select private equity firms to buy up to a 10% stake of a team. Each fund or consortium will be able to do deals with up to six teams.

The initial approved firms include Ares Management, Sixth Street Partners and Arctos Partners, in addition to a consortium nicknamed “The Avengers” that includes Dynasty Equity, Blackstone, Carlyle Group, CVC Capital Partners and Ludis, a platform founded by investor and former NFL running back Curtis Martin.

The firms collectively have $2 trillion in assets and intend to commit $12 billion of capital to be raised (inclusive of leverage) over time, according to people familiar with the matter, who asked not to be identified to speak about terms that were not public. With at least four investor groups able to invest in up to six teams each, that works out to $500 million of added capital on average for each team that receives an investment.

NFL Commissioner Roger Goodell told CNBC in July that the league has had tremendous interest from private equity.

The league created a committee last September to look at the possibility of welcoming private equity funding and has been meeting with the selected firms more recently.

The NFL is the last major sports league to allow private equity investment, and it’s still treading lightly on the issue by allowing only a select group to participate and at a lower rate than the other professional sports leagues.

The National Basketball Association, Major League Baseball, the National Hockey League and Major League Soccer all allow private equity ownership of up to 30%.

Goodell told CNBC in July that he believes the 10% is a complement to the existing ownership structure and that the percentage could be raised at some point in the future.

As NFL team valuations rise, it’s meant a smaller pool of owners have the money to foot the price tag when teams become available.

That dynamic was on display during the sale of the Washington Commanders last year. The franchise sold for a record $6.05 billion to an ownership group that included Apollo co-founder Josh Harris and 20 other investors.

Harris said in June that the process “created a little bit of a wake-up call at the NFL.”

“Unless you’re one of the wealthiest 50 people [in the world], writing a $5 billion equity check is pretty hard for anyone,” Harris told CNBC at the CNBC CEO Council Summit at the time.

As the NFL opens its doors to fresh capital, the money will also free up funding for new stadiums and related projects.

The Buffalo Bills and Tennessee Titans are both currently in the process of building new stadiums, while the Cleveland Browns, Chicago Bears and Washington Commanders are actively pursuing new stadiums in the future.

This post appeared first on NBC NEWS

Even as mortgage interest rates were rising, home prices reached the highest level ever on the S&P CoreLogic Case-Shiller U.S. National Home Price Index.

On a three-month running average ended in June, prices nationally were 5.4% higher than they were in June 2023, according to data released Tuesday. Despite being a record high for the index, the annual gain was smaller than May’s 5.9% reading.

The index’s 10-city composite rose 7.4% annually, down from 7.8% in the previous month. The 20-city composite was 6.5% higher year over year, down from a 6.9% increase in May.

“While both housing and inflation have slowed, the gap between the two is larger than historical norms, with our National Index averaging 2.8% more than the Consumer Price Index,” noted Brian Luke, head of commodities, real and digital assets at S&P Dow Jones Indices, in a release. “That is a full percentage point above the 50-year average. Before accounting for inflation, home prices have risen over 1,100% since 1974, but have slightly more than doubled (111%) after accounting for inflation.”

New York saw the highest annual gain among the 20 cities, with prices climbing 9% in June, followed by San Diego and Las Vegas with annual increases of 8.7% and 8.5%, respectively. Portland, Oregon, saw just a 0.8% annual rise in June, the smallest gain of the top cities.

Since housing affordability has been a major talking point in this election cycle, this month’s report also broke out home values by price tier, dividing each city’s market into three tiers. Looking just at large markets over the past five years, it found that 75% of the markets covered show low-price tiers rising faster than the overall market.

“For example, the lower tier of the Atlanta market has risen 18% faster than the middle- and higher-tiered homes,” Luke wrote in the release.

“New York’s low tier has the largest five-year outperformance, rising nearly 20% above the overall New York region,” he continued. “New York also has the largest divergence between low- and high-tier prices. Conversely, San Diego has seen the largest appreciation in higher-tier homes over the past five years.”

Prices in the overall San Diego market are up 72% in the past five years, but the high tier is up 79% versus 63% for the lower tier.

The increase in prices came even as mortgage rates rose sharply from April through June, which is the period averaged on the index. Usually when rates rise, prices cool.

The average rate on the 30-year fixed started April just below 7% and then shot up to 7.5% by the end of the month, according to Mortgage News Daily. Rates stayed over 7% before falling back under that level in July. The 30-year fixed is now right around 6.5%.

“Mortgage rates have fallen since June, but there is evidence that even the decline in rates has not been enough to bring buyers back into the market,” said Lisa Sturtevant, chief economist at Bright MLS. “Some buyers are waiting for home prices — and not just interest rates — to come down,”

While home prices should ease month to month going into the fall, due to seasonal factors and more inventory on the market, they are unlikely to drop significantly, and are expected to still be higher than they were last fall.

This post appeared first on NBC NEWS

Home goods retailer Lowe’s is paring back its efforts to promote LGBTQ inclusion — the latest large company to respond to a growing cultural backlash led by conservatives targeting queer representation in public life.

In an internal company memo being widely shared among media organizations, Lowe’s told employees it was ending its participation in surveys for the Human Rights Campaign (HRC), the country’s largest LGBTQ advocacy group, and would also combine company resource groups designed to support minority employees into one umbrella organization.

The company said it would also end sponsorship and participation in community events such as parades, festivals or fairs — a reference to Pride parades. As recently as 2019, Lowe’s was a sponsor of the Pride parade in Charlotte, North Carolina.

A company spokesperson did not respond to a request for comment.

Though some media reports suggested Lowe’s was reversing its diversity efforts writ large, the changes appear to specifically target LGBTQ representation. Lowe’s has previously won praise as a diversity champion — it earned a perfect score in HRC’s most recent corporate equity index that examines its policies protecting LGBTQ workers.

Since 2018, Lowe’s has been led by an African American CEO, Marvin Ellison; in June, Ellison was named Ethical Leader of the Year by the Society for Human Resource Management, the country’s largest HR organization.

As of Tuesday morning, Lowe’s continued to operate a webpage dedicated to its diversity efforts.

“We’re committed to fostering a culture where every member of the Lowe’s team truly feels they belong,’ it says. ‘When associates can be their authentic selves at work, they perform at their best — and when that happens, we all win.”

The page features a quote from its director of human resources: ‘On our team, we care about the whole you. We’ve built an environment where different viewpoints and backgrounds are respected and valued.’

Lowe’s changes follow closely on the heels of announcements by Harley Davidson and Jack Daniel’s parent, Brown-Forman, as well as similar changes this year by Tractor Supply, John Deere and Best Buy. The New York state comptroller, which manages the state’s $207 billion public pension fund, which has investments in Best Buy, then questioned the company’s commitment to inclusivity and supporting the LGBTQ community.

The unofficial leader of the corporate pressure campaign is Robby Starbuck, a video streamer and right-wing online activist. Monday, Starbuck posted on X claiming that he helped provoke the changes at Lowe’s, saying he received an email from a Lowe’s executive in response to a warning he sent the company that he planned to ‘expose’ its ‘woke’ policies.

‘We’re now forcing multi-billion dollar organizations to change their policies without even posting just from fear they have of being the next company that we expose,’ he wrote. ‘We are winning and one by one we WILL bring sanity back to corporate America.’

Starbuck did not immediately respond to an emailed request for comment.

Lowe’s reversal shows a conservative push against queer rights that began with Target and Bud Light in previous years continues apace, and it has helped clarify that the campaign against ‘woke’ is more often than not an effort to silence LGBTQ voices.

In a statement, Orlando Gonzales, HRC’s senior vice president of programs, research and training, said in an emailed statement: “Hasty, shortsighted decisions contrary to safe and inclusive workplaces will create a snowball effect of negative long-term consequences for companies, cutting them off from top talent, turning off LGBTQ+ and other consumers, and impacting companies’ bottom line.”

‘Retreating from these principles undermines both consumer trust and employee success,” Gonzales said.

This post appeared first on NBC NEWS

When hundreds of Russian missiles and drones assaulted Ukraine on Monday morning, Victoria Novorzhytska’s power went out first. The water supply was cut immediately after that.

She knew immediately the day would turn into a struggle. She works from her home in Zhytomyr, west of Kyiv, and no power means no work.

Russia launched its biggest ever aerial attack against Ukraine on Monday, hitting energy infrastructure across the country. More strikes landed on Tuesday morning, killing five people and raising the death toll from this week’s attacks to 12.

The Ukrainian government and the country’s major energy companies would not disclose the scale of the disruption from the onslaught, but it is clear it knocked out power for millions.

Ukraine’s largest private energy company DTEK announced rolling blackouts for number of regions on Monday, including Kyiv, Odesa, Dnipropetrovsk and Donetsk.

For people on the western outskirts of the capital, this meant six hours of darkness followed by two hours of power between 2 a.m. and 4 a.m.

The scheduled cuts add inconvenience to people’s lives, but they at least allow them to plan around power outages – so that residents of high-rise apartment blocks don’t get stuck outside when the elevators are not working, and that people charge up vital electronic devices while the power is on.

That these blackouts are already needed in the summer is particularly worrying. This situation could be far worse in a few months’ time, when demand for electricity tends to be higher in the cold, dark winter.

“The key task is to get through the winter, to provide energy supply to critical infrastructure, people and the economy,” Ukraine’s Prime Minister Denys Shmyhal told reporters on Tuesday.

Shmyhal said the focus now was on repair and rebuilding. “We do this all the time, after each Russian shelling billions are allocated (and) equipment is brought to Ukraine.”

Powering up

Ukrainians have become used to living under the constant threat of blackouts. Monday’s attack stood out because of its massive scale, but it was not unusual in terms of the means Moscow used and the targets it chose. Energy infrastructure has long suffered from Russian strikes.

In Kyiv, authorities have set up “points of invincibility,” tents and other areas where people can charge their electronics and use the internet during power cuts.

The frequent attacks on energy infrastructure have also led many Ukrainian cities to invest in solar power. Kyiv mayor Vitaliy Klitschko said the city has been subsidising the purchase of generators and solar panels by housing cooperatives and condominiums so that they can be independent of the energy network. The government has also put tax cuts and grants into place to help people get the equipment.

The vast majority of businesses, from tiny food stalls to huge shopping malls, now have their own generators, their deep rumble synonymous with blackouts.

Maksym Holubchenko, a 25-year-old barista in Kyiv said his cafe’s generator saves it from having to shut down every time there is a power cut after Russian strikes. It happens about once a month at the moment, he said.

Kyiv was hot on Monday and the thermometer on the wall in Holubchenko’s cafe showed 34 degrees Celsius (93 degrees Fahrenheit). The generator is not powerful enough to cover the needs of a normal service in the the cafe, so Holubchenko has to make compromises.

“In the winter we have enough power from the generator. In the summer we have to switch off the air conditioner and… parts of the coffee machine,” he said.

The cafe has sockets ready for customers who need to charge up their phones and other gadgets, as well as use the internet during power cuts.

Russia has been targeting Ukraine’s energy grid since its full-scale invasion in February 2022 but this year Moscow began specifically targeting power generation facilities: thermal power plants, hydroelectric power stations and even energy storage facilities.

Olha Matskiv, a legal expert at Global Rights Compliance, an international NGO that is advising Ukraine on investigating and prosecuting war crimes, said the attacks are “creating conditions inside Ukraine that are incompatible with life.”

“This is a tactic that the Russian army is using to drain Ukraine’s internal reserves, both human and financial, slowing down the country’s economy, which cannot develop when businesses are closing due to lack of electricity,” she added.

The government has been trying to fortify Ukraine’s energy network so that it can withstand strikes, first wrapping them to protect them from shrapnel and then using reinforced concrete defenses that can withstand some direct hits.

On Tuesday, Prime Minister Smyhal said the measures are working. “Dozens of missiles attacked substations on Monday and we lost a very small amount of our equipment out of dozens of hits yesterday thanks to the protection,” he told reporters.

He added that Ukraine is experimenting with huge protective structures the size of three football fields to cover bigger power stations.

“They are extremely expensive, and their economic feasibility is still not clear. The cost of such protection for six substations is 188 billion hryvnia ($4.5 billion). This is an incredible amount of money that partners are not ready to give and that is not in the state budget,” Smyhal said.

This post appeared first on cnn.com

Mexico’s President Andrés Manuel López Obrador is halting diplomatic relations with the US and Canadian embassies after their ambassadors criticized his proposal to have judges elected by popular vote.

López Obrador announced the move during his daily press conference on Tuesday, saying the “pause” is with the embassies and not the countries. He said relations will be reestablished once the diplomats are “respectful of the independence of Mexico, of the sovereignty of our country.”

López Obrador’s proposal for judicial reform is part of a package of constitutional changes he has been seeking, which have yet to been approved. On Monday, a congressional committee approved the proposal, and it now requires two-thirds approval in both chambers of Congress.

The reforms include a range of issues in areas like pensions and the energy sector, but they also include controversial judicial and institutional reforms, which critics say would weaken the separation of powers and see the disappearance of some independent regulatory agencies.

US Ambassador to Mexico Ken Salazar said last Thursday that he believes a “popular direct election of judges is a major risk to the functioning of Mexico’s democracy.” Salazar stressed that judicial reformneed to ensure the judiciary would be strengthened and not “subject to the corruption of politics.”

The ambassador also said the move could impact the US-Mexico trade relations. The US and Mexico are each other’s top trading partners.

Canada’s ambassador in Mexico, Graeme Clark, has warned of investor worries due to the proposed judicial reforms, and voiced concern about the “disappearance” of some autonomous bodies.

After López Obrador’s press conference on Tuesday, Salazar posted a note on X reiterating the “significant concerns” the US has over the judicial reform.

Several US lawmakers also expressed their concern on Tuesday, saying judicial reform will jeopardize “critical economic and security interests shared by our two nations” including a regional trade pact.

“We are also alarmed that several other constitutional reforms currently under discussion may contradict commitments made in the U.S.-Mexico-Canada Trade Agreement, which is scheduled for review in 2026,” read a statement from the US Senate’s Foreign Relations Committee.

The constitutional reforms include eliminating several independent regulatory bodies and merging others that the government claims are duplicating functions. López Obrador is seeking to shutter the Personal Data Protection Institute (INAI). The regulator in February launched an investigation against López Obrador after he disclosed the personal phone number of a New York Times journalist.

The Mexican leader previously hit back at the criticism of his planned reforms saying that he is seeking “to establish constitutional rights and strengthen ideals and principles related to humanism, justice, honesty, austerity and democracy.”

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Ukrainian President Volodymyr Zelensky said the incursion into Russia’s Kursk region was the first part of Kyiv’s victory plan, which he intends to present to US President Joe Biden in September.

At a press conference in Ukraine’s capital on Tuesday, Zelensky said he plans on attending the United Nations General Assembly in September, where he would meet Biden. He added that the plan’s success largely depends on the US.

“The success of this plan depends on him. Will they give what we have in this plan or not. Will we be free to use what we have in this plan or not,” he asked.

He said the plan would be presented to both Vice President Kamala Harris and former President Donald Trump. “As we don’t know who the president of the US will be and we want to conduct this plan,” he said.

While light on details, Zelensky said the four-stage plan began with the cross-border incursion into Kursk, which he said “is already done.”

“Second direction is Ukraine’s strategic place in the security infrastructure of the world,” Zelensky continued. “Third direction is the powerful package of forcing Russia to end the war in a diplomatic way, and the fourth direction is economical.”

“Kursk region is part of our plan. The plan of our victory. It may sound ambitious for someone, but it’s a very important plan for us,” he said.

He stopped short of giving more information, saying “he can’t say everything.”

Ukraine’s surprise military incursion this month left Russia struggling to shore up its own territory. Kyiv seems to have multiple goals with the assault, from boosting morale after a torrid few months to stretching Russia’s resources.

It also raised questions on how it would end aggressions as Russia has continued to advance in eastern Ukraine and is closing in on the city of Pokrovsk in Donetsk region, where authorities are scrambling to evacuate tens of thousands of residents

Speaking at the heads of state institutions forum in Kyiv, Syrskyi claimed around 30,000 Russian forces have already been redeployed to Kursk, adding that the “figure is growing.”

At the same forum, Zelensky hailed Ukraine’s development of what he described as a new long-range rocket drone, called “Palianytsia,” which he has previously suggested was Ukraine’s “own way to take real action” amid restrictions by Western allies on the use of long-range weapons within Russia.

“Palianytsia” is a Ukrainian word for a type of bread that is typically reputed to be difficult to pronounce by Russians. Since the start of the war, Ukrainians have used the word to identify saboteurs or members of the Russian military.

As the fighting continues on several fronts, Russia launched its biggest ever aerial attack against Ukraine on Monday, hitting energy infrastructure across the country. More strikes landed on Tuesday morning, killing five people and raising the death toll from this week’s attacks to 12.

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Nicaragua’s strongman President Daniel Ortega has offered to send “Sandinista fighters” to Venezuela in support of his embattled fellow authoritarian leader Nicolas Maduro, in case there is an attempt at an “armed counterrevolution” following July’s disputed presidential election.

Maduro has been under some pressure since his declaration of victory in the vote sparked widespread suspicion among the opposition and abroad. Thousands of Venezuelans have since taken to the streets in protest and political violence has killed at least 24 civilians and one soldier. The government’s security forces have detained at least 2,000 opposition sympathizers.

Ortega, speaking at a virtual summit with heads of state from other Latin American countries on Monday, offered his support to Maduro in the case of an “armed counterrevolution,” assuring him that if “battle were to come, they (Maduro’s government) will have Sandinista fighters accompanying them.”

In Nicaragua, “Sandinista” generally refers to members of the left-wing political movement, the Sandinista National Liberation Front (FSLN) that came to power in the Nicaraguan Revolution at the end of the 1970s. Ortega’s party is the FSLN.

However, Ortega didn’t specify whether he was offering up police, soldiers from the military, or pro-government armed groups that rights groups have accused of conducting crackdowns alongside the police in Nicaragua, which Ortega has denied any links to.

Ortega also criticized other leaders of Latin American nations, including Brazil’s Luiz Inácio Lula da Silva (also known as Lula) and Colombia’s Gustavo Petro – both leftists – for not recognizing Maduro as the winner of what is set to be his third consecutive six-year term. The Nicaraguan strongman himself is serving a fifth term as president and has been accused of rigging elections in the past.

During the summit, Ortega said it was “shameful” that Lula hadn’t recognized Maduro and accused him of “dragging” himself before the US. The president made similar comments about Colombia’s Petro.

Petro responded to Ortega in a post on X saying, “At least I do not drag down the human rights of the people of my country, much less those of my comrades in arms and those fighting against dictatorships.”

According to Venezuela’s electoral council, which is controlled by government sympathizers, Maduro won his reelection bid with just over 50% of the vote. But the country’s opposition coalition, as well as electoral observers from the United Nations and the Carter Center have questioned the council’s numbers. The US, the EU and various other countries and multilateral institutions have urged Venezuela to release granular data showing the results by polling station.

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A stretch of uninhabited, low-lying reefs in the South China Sea is fast becoming a dangerous new flashpoint between China and the Philippines, dealing a blow to recent efforts to de-escalate tensions in one of the world’s most vital waterways.

Over the past week, Chinese and Philippine vessels have engaged in multiple collisions and face-offs near Sabina Shoal, a disputed atoll lying just 86 miles from the Philippines’ west coast and 745 miles from China, which claims almost all of the South China Sea as its sovereign territory despite an international ruling to the contrary.

The violent confrontations came just weeks after Beijing and Manila struck a temporary deal to lower tensions that had been rising all summer at another nearby reef, where China’s increasingly aggressive tactics had raised alarm across the region as well as in Washington, a mutual defense ally of the Philippines.

Renewed tension in the South China Sea is expected to be on the agenda of meetings between US national security adviser Jake Sullivan and Chinese Foreign Minister Wang Yi during Sullivan’s visit to China this week.

Following a particularly violent encounter at the Second Thomas Shoal in June, which saw Chinese coast guard personnel brandishing axes at Filipino soldiers and slashing their rubber boats, Chinese and Philippine officials sat down for talks and agreed to de-escalate.

For a while, tensions appeared to be cooling, but the detente proved short lived.

On August 19, in the middle of the night, coast guard ships from China and the Philippines collided near Sabina Shoal. Manila said the Chinese ships rammed into its vessels, tearing a 3.6-foot hole in one and a 3-foot-wide gap in another. Beijing blamed the Philippines for the collisions.

Then, last Sunday afternoon, another clash took place, with the Philippines accusing China of ramming and firing water cannons at a vessel from its fisheries bureau in an encounter with eight Chinese ships, including a warship from the People’s Liberation Army Navy. China said the Philippine ship “refused to accept control” by a Chinese coast guard vessel and “deliberately collided” with it.

The following day, in yet another tense encounter, the Philippines said China deployed “an excessive force” of 40 ships – including three PLA Navy warships – to block two Philippine Coast Guard vessels. Beijing said it took “control measures” against two Philippine ships that “intruded” into waters near Sabina Shoal.

Analysts say Sabina Shoal is fast becoming the latest confrontation zone in what is already a highly contested part of the world, where a mistake could quickly spiral into a conflict with hugely damaging consequences.

“All indications seem to point to the fact that this is an emerging third flashpoint” after the Second Thomas Shoal and another atoll to the north named the Scarborough Shoal, said Collin Koh, research fellow at the S. Rajaratnam School of International Studies in Singapore.

“Manila is trying to avoid what they call a repeat of the Scarborough Shoal,” which China seized in 2012 after a long standoff with the Philippines and on which it has maintained a permanent presence since, Koh added.

China, on the other hand, is trying to see off another Second Thomas Shoal, where the Philippines ran aground a World War II-era ship in 1999 to stake its claim over the reef and has stationed a small group of marines since.

The violent clashes around Second Thomas Shoal earlier this summer occurred during Beijing’s attempts to block Manila’s missions to resupply its soldiers stationed on the rusting BRP Sierra Madre.

Resupply missions

A similar blockade is playing out at Sabina Shoal, which is about 40 miles closer to the Philippine coast than the Second Thomas Shoal. Both lie within the Exclusive Economic Zone (EEZ) of the Philippines.

Since April, the Philippines has deployed a coast guard vessel to Sabina Shoal to monitor what it said were signs of China’s illegal land reclamation activities, after Filipino scientists discovered piles of crushed corals on the sandbars amid an increased presence of Chinese ships in the area. China has denied the accusation.

Displacing 2,300 tons, the 318-foot-long BRP Teresa Magbanua anchored at Sabina Shoal is one of the two largest ships that the Philippine Coast Guard has and is its flagship. Acquired from Japan in 2022, it is also one of the newest ships in Manila’s fleet, carrying a crew of 67.

“This has really annoyed China and they want that (Philippine) vessel to go away,” said Ray Powell, director of SeaLight, a maritime transparency project at Stanford University’s Gordian Knot Center for National Security Innovation.

“China refers to it … as a ‘quasi-grounding,’ so they’re basically treating it like it’s the Sierra Madre all over again even though it is not grounded, it’s anchored.”

And Beijing has been gradually upping the pressure on Manila.

In July, China anchored one of its “monster” coast guard ships, the 12,000-ton CCG-5901, near Sabina Shoal. The CCG-5901 is more than five times the size of the Philippines’ Teresa Magbanua and larger than any other regular coast guard ship in the world.

“Initially the Chinese were trying to warn Manila to roll back at Sabina Shoal. That’s why they send the monster ship just to create an impression,” Koh said.

“But the Filipinos were sitting still and not moving at all. So I guess the Chinese likely have reached a point where they concluded that they need to up the pressure on the Filipinos, which is why we saw what’s happening recently.”

In recent weeks, Chinese state media have accused the Philippines of trying to establish a long-term presence at Sabina Shoal to occupy the reef and indicated that China will not allow any resupply missions to proceed.

“China will never be deceived by the Philippines again,” Chinese state news agency Xinhua said in a commentary about the Sunday faceoff, citing Manila’s grounding of the Sierra Madre at the Second Thomas Shoal back in 1999.

On Monday, the Philippine Coast Guard said it had deployed two ships on a “humanitarian mission” to deliver vital food and supplies to its personnel stationed abroad the Teresa Magbanua, including “a special ice cream treat” in honor of the country’s National Heroes’ Day.

(Teresa Magbanua, one of the heroes commemorated on the day, was one of the few women to lead Filipino troops in battles against Spanish colonizers during the Philippine Revolution and against American forces in the Philippine-American war.)

But the mission failed due to the obstruction of 40 Chinese ships, according to the Philippine Coast Guard.

If China continues to block the Philippines from resupplying the Teresa Magbanua with food, water and fuel or rotating its crew, the Philippine ship will have to sail away, Powell said.

‘High-stakes game’

For now, neither Beijing nor Malina appear willing to back down.

“It’s a high-stakes game for Manila,” Koh said. “The domestic circumstances all point to the very fact that now Sabina Shoal is where you could not yield an inch to the Chinese… Marcos Jr is definitely right on the chopping board for that,” he added, referring to Philippine President Ferdinand Marcos Jr.

Since coming to power in 2022, Marcos Jr has strengthened Manila’s alliance with the US and increasingly challenged China’s expansive claims in the South China Sea, which an international tribunal said had no legal basis in a landmark ruling in 2016.

His predecessor Rodrigo Duterte, a firebrand populist who launched a notoriously brutal anti-drug war, favored a much warmer relationship with Beijing and was much less willing to confront Beijing over the South China Sea.

Manila’s current “transparency initiative” to expose China’s growing assertiveness in the disputed waters has won it international support, especially from Western countries, but Beijing is not deterred by negative press, Powell said.

“China seems to be speeding up its agenda for taking control of West Philippine Sea features,” he said. “They have the capacity and they have the will, and they have not seen anything yet that says to them that the cost is going to be too high.”

Meanwhile, both Beijing and Manila are watching closely for how Washington will react.

American officials have repeatedly pledged to defend the Philippines from any armed attack in the disputed waters, stressing Washington’s “ironclad commitment” to a 1951 defense treaty between the two allies.

Samuel Paparo, commander of the US Indo-Pacific Command, said Tuesday that American ships could escort Philippine vessels on resupply missions in the South China Sea, describing what he called an “an entirely reasonable option” that required consultation between the treaty allies, according to Reuters.

But being dragged into another global conflict will not be in US interests, especially in the run-up to its presidential election, Koh said, adding that Washington is already occupied with Russia’s invasion of Ukraine and the raging war between Israel and Hamas in Gaza.

“The Chinese know that Manila has very limited options if they could not depend on US help,” Koh said. “China is deliberately escalating the situation, with a likely intention to test how far Washington would support Manila.”

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Ukraine’s military incursion into Russian territory in the Kursk region is covering some of the same territory on which the Soviet Union scored one of its most important victories over German invaders in World War II, one that some historians say turned the tide of the war in Europe almost a year before the D-Day invasion of Normandy.

The June 6, 1944, landings on the beaches of France are often thought of in the West as the turning point in Nazi leader Adolf Hitler’s conquest of Europe, but the die was cast for Germany’s defeat from July 5 to August 23, 1943, when millions of troops and thousands of tanks and armored guns did battle around Kursk, the historians say.

With victory in Kursk, “the Soviets seized the initiative in the east and never surrendered it until the end of the war,” said Michael Bell, executive director of the Jenny Craig Institute for the Study of War and Democracy at the National World War II Museum in New Orleans.

What was the Battle of Kursk?

In the spring of 1943, Hitler’s army in the east was badly wounded by the Battle of Stalingrad, where the Germans lost almost a million men in their attempt to take the city on the Volga River, rout a battered Soviet army, and capture oil fields in the southern Caucasus that could provide the fuel for Germany’s full conquest of Europe.

Soviet leader Josef Stalin ordered Stalingrad defended at all costs and German advances during the late summer and fall of 1942 were pushed back during the winter, and what was left of the German forces in the city surrendered by February 1943.

As German forces were pushed back along the Eastern Front after Stalingrad, Hitler’s generals looked for a way to regain the initiative in the east and settled on trying to pinch off a Soviet salient, a 150-mile, north-to-south bulge in the German lines, defended by more than a million men and centered on Kursk.

The generals wanted to attack in the spring, but Hitler pushed back the start of the operation, dubbed Operation Citadel, so some of Germany’s newest tanks could be dispatched to the battlefront.

This gave the Soviets ample time to prepare defenses for what was an obvious point for an attack, said Peter Mansoor, a professor of history at The Ohio State University and former US Army armored cavalry commander.

“It was pretty easy to tell that the Germans would have an interest in squeezing this bulge out of the front,” Mansoor said.

Germany would commit as many as 800,000 troops and around 3,000 tanks to take that salient.

But they faced formidable defenses.

Bell, from the World War II museum, said the Soviets prepared a series of defensive lines, dug 3,000 miles of anti-tank ditches and laid 400,000 land mines to defend the bulge, while putting 75% of its armor and 40% of its manpower on the Eastern Front in the Kursk salient or in reserve behind it.

While the new tanks Hitler wanted in the battle were more powerful than Soviet armor, Stalin’s forces had the numerical advantage, Bell said.

“The Germans have some superior equipment, but the superiority in numbers is clearly on the Soviet side,” Bell said.

Some estimates of Soviet strength in the Battle of Kursk surpass 2 million troops and more than 7,000 tanks.

The numerical advantage tipped even further to the Soviet side when on July 9, Allied forces landed on the Italian island of Sicily, opening a new front Hitler had to defend and prompting him to transfer some forces from the Eastern Front to Italy, the historians said.

The German forces that remained could not break the Soviet defenses, falling well short of objectives and never penetrating deep into rear areas.

The cost to Hitler’s forces was steep, with casualty figures ranging up to 200,000 or more killed and around 1,000 tanks lost, according to histories of the battle.

“The Germans were never able to mass forces again to the magnitude that they attempt with this battle,” Bell said.

“What Kursk did was eliminate the German armor reserves and thereby made it impossible for the Germans to successfully defend the Russian front for the rest of the war,” Mansoor said.

“After Kursk, the Germans could no longer replace their manpower losses and they lost the cream of their armored corps there,” he said.

The Kursk battlefield today

When Ukrainian forces crossed the border into the Kursk region on August 6, they had an advantage that the Germans didn’t have in 1943 – surprise.

The offensive was planned in complete secrecy, and troop movements were made to look like reinforcements of defensive positions or an exercise inside Ukraine.

And Russia was not prepared to defend that territory like it was in portions of Ukraine which it has taken, Mansoor said.

In fact, the defenses Russia set up – layers of trenches, mines, anti-tank weapons backed by artillery and armor – in parts of the Donbas region of Ukraine which it occupies are much like the Soviet defenses of Kursk in 1943, he said.

“The Russians have not changed their way of war all that much,” Mansoor said.

And that may play to Ukraine’s advantage today, said the former US Army armored cavalry officer.

Ukraine has created maneuver space inside Russian territory using combined arms warfare – successfully synchronizing infantry, long-range artillery and aviation in support of each other – something Kyiv’s forces had not been able to do before.

“It really changes the nature of the war, at least in that area of the front line,” Mansoor said.

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