Stocks sold off sharply on Friday 28th March 2025, pressured by growing uncertainty on U.S. trade policy as well as a grim outlook on inflation
The Dow Jones Industrial Average closed down 715 points at 41,583. The S&P 500 lost 1.97% to close 5,580 ending the week down for the fifth time in the last six weeks. The Nasdaq Composite plunged 2.7% to 17,322.
Shares of several technology giants also fell putting pressure on the broader market. Google-parent Alphabet lost 4.9%, while Meta and Amazon each shed 4.3%.
This week, the S&P 500 lost 1.53%, while the 30-stock Dow shed 0.96%. The Nasdaq declined by 2.59%. With this latest losing week, Nasdaq is now on pace for a more than 8% monthly decline, which would be its worst monthly performance since December 2022.
Dow Jones one-day chart (28th March 2025)
Dow Jones one-day chart (28th March 2025)
Stocks took a leg lower on Friday after the University of Michigan’s final read on consumer sentiment for March 2025 reflected the highest long-term inflation expectation since 1993.
Friday’s core personal consumption expenditures price index also came in hotter-than-expected, rising 2.8% in February and reflecting a 0.4% increase for the month, stoking concerns about persistent inflation.
Economists had reportedly been looking for respective numbers of 2.7% and 0.3%. Consumer spending accelerated 0.4% for the month, below the 0.5% forecast, according to fresh data from the Bureau of Economic Analysis.
The market is getting squeezed by both sides. There is uncertainty about reciprocal tariffs hitting the major exporting sectors like tech alongside concerns about a weakening consumer facing higher prices
Trump’s tariffs push will hit the U.S. harder than Europe in the short term, it has been reported.
Japan’s Nikkei enters correction as Trump’s tariff assault drives sell-off in Asia markets
U.S. tech giants are making bold strides in the development of humanoid robots, signalling a transformative shift in the robotics industry
Companies like Tesla, Google, Microsoft, and Nvidia are investing heavily in this cutting-edge technology, aiming to create machines that mimic human movement and behaviour.
These humanoid robots are envisioned to revolutionise industries ranging from manufacturing to healthcare, offering solutions to labor shortages and enhancing productivity.
Tesla’s Optimus project is a prime example of this ambition. CEO Elon Musk has announced plans to produce thousands of these robots, designed to perform repetitive and physically demanding tasks.
Optimus robots are expected to integrate seamlessly into factory settings, reducing the need for human intervention in hazardous environments.
Similarly, Boston Dynamics, known for its agile robots, continues to push the boundaries of what humanoid machines can achieve, focusing on tasks that require precision and adaptability.
The integration of artificial intelligence (AI) is a driving force behind these advancements. AI enables robots to learn from their environments, adapt to new tasks, and interact with humans in more intuitive ways.
Companies like Nvidia are leveraging their expertise in AI and machine learning are helping to develop robots capable of complex decision-making and problem-solving.
However, challenges remain. High production costs, limited battery life, and safety concerns are significant hurdles that need to be addressed before humanoid robots can achieve widespread adoption.
Despite these obstacles, the potential benefits are immense. From assisting the elderly to performing intricate surgeries, humanoid robots could redefine the boundaries of human capability.
As U.S. tech giants continue to innovate, the race to dominate the humanoid robotics market intensifies.
Tesla Optimus Gen 2
With China and other nations also making significant investments, the competition is fierce. Analysts warn that U.S. firms could lose out to China, which aims to replicate its success with electric vehicles in the robotics space race.
The future of humanoid robots promises to be a fascinating blend of technology, creativity, and global collaboration
U.S. companies that may benefit from this AI humanoid tech advancement
Tesla: Known for its Optimus humanoid robot project, Tesla is pushing boundaries in robotics and AI.
Google (Alphabet): A leader in AI and robotics research, with projects aimed at enhancing humanoid capabilities.
Microsoft: Investing in AI technologies that support robotics and automation.
Nvidia: Provides advanced AI chips and systems crucial for humanoid robot development.
Boston Dynamics: Famous for its agile robots like Atlas, focusing on precision and adaptability.
Agility Robotics: Creator of Digit, a humanoid robot designed for logistics and manufacturing.
Meta (Facebook): Exploring humanoid robots for social and interactive applications.
Apple: Investing in robotics and AI for potential humanoid advancements.
Amazon: Developing robots like Astro for home monitoring and other tasks.
Figure AI: Innovating humanoid robots like Figure 02 for various industries.
Bill Gates on AI
Bill Gates has shared some fascinating insights about AI recently. He reportedly believes that within the next decade, AI will transform many industries, making specialised knowledge widely accessible.
For example, he predicts that AI could provide high-quality medical advice and tutoring, addressing global shortages of doctors and educators.
Gates has also described this shift as the ‘age of free intelligence,’ where AI becomes a commonplace tool integrated into everyday life. While he acknowledges the immense potential of AI to solve global challenges – like developing breakthrough treatments for diseases and innovative solutions for climate change – he also recognises the disruptive impact it could have on jobs and the workforce.
Despite these concerns, Gates remains optimistic about AI’s ability to drive innovation and improve lives.
He has emphasised that certain human activities, like playing sports or hosting talk shows, will likely remain uniquely human.
However, despite all these predictions from powerful tech leaders – it does beg the question, do these ultra rich CEOs predict the future, or simply make it?
What if Quantum Physics coincides and collides with the ‘full’ arrival of AI and humanoid robots
Quantum computing could enhance the capabilities of AI-powered robots by solving complex optimisation problems, improving machine learning algorithms, and enabling real-time decision-making.
For instance, robots equipped with quantum sensors could navigate intricate environments, detect subtle changes in their surroundings, and interact with humans in more intuitive ways.
This fusion could revolutionise industries such as healthcare, manufacturing, and space exploration. Imagine humanoid robots performing intricate surgeries with precision, managing large-scale logistics, or exploring distant planets with advanced problem-solving abilities.
However, this convergence also raises ethical and societal questions. The potential for such powerful technologies to disrupt industries, impact employment, and challenge privacy norms must be carefully managed.
Collaboration between scientists, policymakers, and ethicists will be crucial to ensure these advancements benefit humanity as a whole.
The intersection of quantum physics, AI, and humanoid robotics is not just a technological milestone – it’s a glimpse into a future where the boundaries of human capability and machine intelligence blur.
It’s an exciting, albeit complex future humans are creating.
But will AI surpass human intelligence – and if it does what then for the human civilisation?
This news has sparked a surge in TMTG’s stock, which rose by approximately 9% in after-hours trading, despite a challenging year that saw the stock down 38% prior to this development. Will the gain hold?
The ETFs, branded under TMTG’s fintech arm are set to focus on a ‘Made in America’ theme, incorporating a mix of digital assets like Bitcoin and Cronos (Crypto.com’s native token) alongside traditional securities.
Crypto.com will play a pivotal role in this venture, providing backend technology, custody, and cryptocurrency supply for the ETFs.
The products are expected to be available internationally, including in Europe and Asia, through major brokerage platforms and the Crypto.com app, which boasts a global user base of 140 million.
This partnership marks another step in TMTG’s foray into the digital asset space, following previous ventures into non-fungible tokens (NFTs) and meme coins.
The move also highlights the growing intersection between traditional finance and cryptocurrency, as companies seek to innovate and diversify their offerings in a competitive market.
While the announcement has generated excitement, it also raises questions about the regulatory landscape and the sustainability of such ventures.
As TMTG and Crypto.com prepare to launch these ETFs later this year, pending regulatory approval, the financial world will be watching closely to see how this collaboration unfolds and its impact on the broader market
BYD, a leading name in the electric vehicle (EV) industry, has unveiled groundbreaking super-charging technology that could redefine EV adoption
The new ‘super e-platform’ boasts peak charging speeds of 1,000 kilowatts (kW), enabling vehicles to gain a range of 400 kilometers (249 miles) in just five minutes.
This innovation brings EV charging times closer to the convenience of refueling traditional gasoline vehicles.
Charging speeds of 1,000 kW would be twice as fast as Tesla’s superchargers whose latest version offers up to 500 kw charging speeds. Fast-charging technology has been key to increasing EV adoption as it is seen to help assure EV drivers’ concerns over being able to charge their cars quickly.
The announcement, reportedly made at BYD’s Shenzhen headquarters, marks a significant leap in addressing ‘charging anxiety’- a key concern for EV users. Founder Wang Chuanfu emphasised the company’s commitment to making EV charging as quick and seamless as possible.
This is the first time the industry has achieved megawatt-level charging power, setting a new benchmark.
To complement this technology, BYD plans to build over 4,000 ultra-fast charging stations across China.
The initial rollout will feature the super e-platform in two new models: the Han L sedan and Tang L SUV, priced from 270,000 yuan ($37,328). These vehicles will pioneer the use of this cutting-edge charging system.
As competition in the EV market intensifies, BYD’s innovation positions it as a formidable player, challenging established giants like Tesla and paving the way for a more electrified future.
Gold has reached a historic milestone, breaking the $3,000 per ounce barrier for the first time in history
This remarkable surge reflects a confluence of global economic uncertainties, geopolitical tensions, and shifting investor sentiment.
The rally has been fueled by a variety of factors. Central banks worldwide have significantly increased their gold reserves, seeking a hedge against inflation and a safeguard from potential economic sanctions.
This trend gained momentum following the freezing of Russian central bank assets in 2022, which underscored the vulnerabilities of holding reserves in foreign currencies.
Additionally, escalating trade tensions and fears of a global recession have driven investors toward safe-haven assets like gold. The U.S. administration’s aggressive tariff policies have amplified market volatility, prompting a flight to stability.
Gold-backed exchange-traded funds (ETFs) have also seen substantial inflows, further bolstering demand.
The psychological significance of crossing the $3,000 mark cannot be understated. It signals a shift in market dynamics, with gold outperforming many traditional asset classes.
Analysts predict that, barring a dramatic change in economic conditions, the upward trajectory may continue, potentially reaching new highs in the coming months.
This milestone underscores gold’s enduring appeal as a store of value in turbulent times, cementing its status as a cornerstone of global financial markets.
While some experts predict gold could reach $3,500 by the third quarter of 2025, others are more optimistic about the $4,000 mark being attainable in the near future.
The S&P 500 has officially entered correction territory, marking a significant shift in market sentiment
The index, widely regarded as a benchmark for the health of large U.S. companies, has fallen over 10% from its February 2025 peak.
This downturn follows a series of escalating trade tensions, with President Donald Trump announcing a 200% tariff on European alcoholic products in response to the European Union’s levies on American whiskey.
The correction reflects growing investor concerns over the potential economic fallout of these trade disputes. The Nasdaq Composite, another major index, had already entered correction territory earlier, signaling broader market unease. The Dow Jones Industrial Average also experienced a decline, marking its fourth consecutive day of losses.
Economists warn that the ongoing trade war could exacerbate fears of a recession, as businesses face rising costs and uncertainty. The Federal Reserve’s recent inflation reports suggest price growth remains elevated, adding to the challenges.
While corrections are not uncommon, they often serve as a wake-up call for investors. Historically, only a fraction of corrections evolve into bear markets, but the current environment of trade tensions and inflationary pressures has heightened concerns.
As markets navigate these turbulent waters, all eyes remain on policymakers and their next moves to stabilise the economy.
The announcement of Donald Trump’s Strategic Bitcoin Reserve has sparked a wave of criticism and debate, with detractors likening the initiative to ‘a pig in lipstick’ – a superficial attempt to dress up a flawed concept.
The reserve, which aims to stockpile or create a strategic reserve Bitcoin seized through criminal and civil forfeitures, has been touted as a bold move to position the United States as a leader in the cryptocurrency space. However, critics argue that the plan is fraught with risks and questionable motives.
One of the primary concerns is Bitcoin’s notorious volatility. Unlike traditional reserve assets such as gold or oil, Bitcoin’s value can fluctuate wildly, making it a precarious choice for a national reserve.
Economists warn that integrating such an unpredictable asset into government holdings could destabilise financial strategies rather than strengthen them.
Moreover, the initiative has raised eyebrows over its potential conflicts of interest. Critics point out that Trump’s administration has shown a growing affinity for cryptocurrency, with some officials previously holding stakes in digital assets.
This has led to accusations that the reserve could serve as a vehicle for personal or political gain rather than a genuine effort to bolster national economic security.
Supporters of the reserve argue that it represents a forward-thinking approach to embracing digital assets as ‘digital gold.’ They believe that retaining seized Bitcoin, rather than auctioning it off, could provide long-term financial benefits and signal the U.S.’s commitment to innovation in the crypto space.
However, even some crypto enthusiasts are skeptical, questioning whether the reserve’s creation is more about optics than substance.
In the end, the Strategic Bitcoin Reserve has ignited a broader conversation about the role of cryptocurrency in national policy. Whether it proves to be a visionary move, or a misguided gamble remains to be seen.
The United States has intensified its tariff policies, marking a significant shift in global trade dynamics
On 4th March 2025, President Donald Trump announced a sweeping increase in tariffs on steel and aluminum imports, raising them to 25% across the board. This move, aimed at bolstering domestic industries, has sparked widespread reactions both domestically and internationally.
The tariffs, which now include a broader range of products such as nuts, bolts, and soda cans, have drawn sharp criticism from key U.S. allies, including Canada, the United Kingdom, and Australia.
U.S and the EU
The European Union has responded with countermeasures, imposing tariffs on $28 billion worth of American goods, set to take effect on 1st April 2025. European Commission President Ursula von der Leyen expressed regret over the U.S. decision but emphasised the need to protect European consumers and businesses.
Domestically, the tariffs have been met with mixed reactions. While U.S. steel and aluminum producers have welcomed the measures, citing potential job creation and increased investment, downstream manufacturers that rely on these metals are bracing for higher costs.
Economists warn that the tariffs could lead to increased prices for consumers and potential disruptions in supply chains. Trump has indicated many times that the tariffs levelled at the U.S. are unfair and unequal.
The Trump administration has justified the tariffs as a means to encourage foreign companies to establish manufacturing facilities in the United States. However, critics argue that the policy could backfire, leading to retaliatory measures from trading partners and a potential slowdown in global economic growth.
As the global trade landscape continues to evolve, the long-term impact of these tariffs remains uncertain. Businesses and policymakers alike are closely monitoring the situation, weighing the potential benefits of protecting domestic industries against the risks of escalating trade tensions.
The coming weeks and months will be crucial in determining the effectiveness of this bold and possibly misguided economic strategy.
U.S. and Canada
The trade relationship between the U.S. and Canada has recently faced significant strain due to escalating tariff policies.
President Donald Trump announced a sharp increase in tariffs on Canadian steel and aluminum, raising them from 25% to 50%. This decision was reportedly in response to Ontario’s provincial government imposing higher electricity prices on U.S. customers.
However, after discussions between Ontario Premier Doug Ford and U.S. Commerce Secretary Howard Lutnick, Ontario agreed to pause the electricity surcharge.
As a result, the U.S. decided to maintain the original 25% tariff rate instead of doubling it. Despite this temporary resolution, tensions remain high, with Canada preparing to implement retaliatory tariffs on $30 billion worth of American goods.
These developments highlight the ongoing challenges in U.S. – Canada trade relations, with both nations navigating the complexities of economic and political interests.
U.S. and China
The U.S. – China trade tensions have escalated significantly in recent months. President Donald Trump recently imposed a 20% tariff on all imports from China, reportedly citing concerns over China’s role in the flow of fentanyl into the U.S.
This move has reignited the trade war that began during Trump’s first term.
In response, China has implemented retaliatory measures, including a 15% tariff on U.S. liquefied natural gas (LNG) and coal, as well as a 10% tariff on crude oil, agricultural machinery, and large-engine cars.
Additionally, China has restricted the export of rare earth minerals and metals, which are critical for U.S. tech and green energy industries.
Both nations have expressed a willingness to engage in dialogue, but the situation remains tense. The economic impact of these tariffs is being closely monitored, as they have the potential to disrupt global supply chains and affect industries worldwide.
U.S. and Mexico
The U.S. – Mexico trade conflict has intensified with the U.S. imposing a 25% tariff on Mexican imports, excluding oil and energy products, which face a 10% tariff.
This decision, aimed at addressing trade deficits and border concerns, prompted Mexico to announce retaliatory tariffs targeting $20 billion worth of U.S. goods. Critics argue these measures undermine the United States-Mexico-Canada Agreement (USMCA) and could disrupt supply chains.
Both nations are bracing for the economic impact, with businesses and consumers facing potential cost increases. This trade dispute highlights the challenges of balancing domestic priorities while maintaining strong international partnerships in a connected global economy.
And there’s more…
Russia and Ukraine peace deal according to Trump. Taking rare earth and other minerals from Ukraine in a ‘deal’. The potential reshaping of Gaza to become the riviera of the middle east. Talk of taking over Greenland. Making Canada the 51st state. etc. etc.
And this is just what we already know after 8 weeks of Trump in power!
Tesla’s sell-off on Wall Street intensified on Monday, with shares of the electric vehicle maker plunging a whopping 15%, marking their worst trading day on the market since September 2020
On Friday, Tesla wrapped up a seventh straight week of losses, its longest losing streak since debuting on the Nasdaq in 2010. The stock has fallen every week since CEO Elon Musk went to Washington, D.C., to take on a major role in the Trump ‘2’ White House.
Since peaking at $479.86 on 17th December 2024 Tesla shares have lost more than 50% of their value, wiping out upward of $800 billion in market cap. Monday 10th March 2025 marked the stock’s seventh worst day on record.
Tesla 3 month share chart as of close 10th March 2025 – down a total of 50% and 15% in one day
Tesla 3 month share chart as of close 10th March 2025 – down a total of 50% and 15% in one day
Tesla led a broader slump in U.S. equities, with the Nasdaq tumbling almost 4%, its steepest decline since 2022.
During an interview on Monday 10th March 2025, Musk was reportedly asked how he manages to run his businesses while fulfilling his role in the Trump White House. He reportedly said he’s doing so –‘with great difficulty’.
In addition to Tesla’s troubles, Musk’s social network X experienced several outages throughout the day on Monday 10th March 2025, and his company SpaceX is investigating two explosions in a row that occurred during test flights of its massive Starship rocket.
Elon Musk is also reported as saying that he expects to remain in the Trump administration for another year. He posted on X that ‘It will be fine long-term’, referencing Tesla’s steep stock price decline.
For seven consecutive weeks since Elon Musk travelled to Washington to join the Trump administration, shares in his automaker have declined, closing on Friday at $270.48.
This marks the longest losing streak for Tesla in its 15 years as a public company.
Tesla shares concluded the week a decline of over 10%, reaching their lowest level since 5th November 2024, U.S. Election Day, when they closed at $251.44.
Since their peak at $480 on 17th December 2024, Tesla has lost over $800 billion in market capitalisation.
Trump’s tariffs have created fresh concern and new volatility in the markets forcing a stock market reversal.
The tariffs, which include a 25% duty on imports from Mexico and Canada, as well as a 10% levy on Chinese goods, have led to significant market volatility.
Investors remain cautious as they assess the long-term implications of these trade restrictions. The tariffs are expected to raise inflation in the U.S. and could potentially lead to a severe market correction.
It’s a complex situation with far-reaching consequences for global trade and the economy.
The S&P 500 retreated on Monday, extending February’s rout and turning red for the year after President Donald Trump’s confirmation of forthcoming tariffs.
The S&P 500 index fell to end at 5849, marking its worst day since December 2024 and bringing its year-to-date performance to a loss of about 0.5%.
The Dow Jones Industrial Average dropped 649 points to finish at 43191. The Nasdaq Composite slid to close at 18350, weighed down by Nvidia’s decline of more than 8%.
Stocks took a notable leg down in the afternoon following President Trump’s reiteration that 25% levies on imports from Mexico and Canada would go into effect on Tuesday 5th March 2025, dashing investors’ hopes of a last-minute deal to avert the full tariffs on the two U.S. allies.
All three indexes traded in positive territory earlier in the day, with the Dow rising nearly 200 points at session highs.
China retaliated with reciprocal tariffs of 15% on some U.S. goods due to take effect 10th. March 2025.
President Donald Trump has announced the creation of a ‘strategic crypto reserve’ that will include Bitcoin, Ethereum, XRP, Solana, and Cardano.
This move aims to position the United States as the ‘crypto capital of the world’ and has already led to significant price increases for these cryptocurrencies.
The announcement was made on Truth Social, where Trump emphasised the importance of elevating the crypto industry after what he described as years of corrupt attacks by the previous administration.
This is the first time Trump has specified his support for a crypto ‘reserve’ versus a ‘stockpile’.
Many crypto investors feel strongly that a crypto reserve should hold only Bitcoin, while some reject the idea of a reserve holding digital assets altogether.
Cryptocurrencies instantly rallied after President Donald Trump announced the creation of a strategic crypto reserve.
Crypto coins have since lost some of those initial gains.
Rolls-Royce’s share price surged by 15% following the announcement of its impressive full-year earnings and positive outlook.
The British aerospace giant reported a 57% increase in operating profit, reaching £2.46 billion for 2024. This exceeded analyst expectations and was driven by strong performance in its jet engine and power systems divisions.
In addition to the robust earnings, Rolls-Royce reinstated its dividend, proposing a 6 pence per share payout, and launched a £1 billion share buyback program.
The company also upgraded its mid-term guidance, projecting operating profit to rise to between £3.6 billion and £3.9 billion.
The market reacted positively to these developments, with Rolls-Royce’s stock hitting a new 52-week high.
Rolls-Royce one-year chart (as of 28th February 2025 09:50 GMT)
Rolls-Royce one-year chart (as of 28th February 2025 09:50 GMT)
The company’s CFO, Helen McCabe, highlighted the significant progress made in their multi-year transformation journey, emphasising the expanding earnings potential and improving balance sheet.
This week has seen a decline in Bitcoin with the digital asset hitting a 3-month low, reversing gains that followed the election of U.S. President Donald Trump.
Bitcoin was trading at about $78,700 in trading in Asia, down 5.5% on the day and about 25% lower than an all-time high from December 2024.
Bitcoin 3-month chart as of 28th February 2025 (08:45 GMT)
Bitcoin 3-month chart as of 28th February 2025 (08:45 GMT)
Bitcoin slips
Bitcoin had enjoyed a surge in prices following Trump’s election victory in November 2024, with Trump having posed himself as a pro-crypto candidate during his campaign.
However, prices have slipped as investors turn-away from assets perceived to be too risky given the weakness in global equity markets and amid uncertainty surrounding the new President’s tariff policy and resolutions to the Russia-Ukraine and Israel-Gaza wars.
Investor sentiment was also soured by news that Bybit, a major cryptocurrency exchange, suffered a $1.5 billion hack in what’s estimated to be the largest crypto heist in history.
The Federal Reserve’s favourite recession indicator, the inverted yield curve, is flashing a danger sign once again.
This occurs when the U.S. yield on the 10-year Treasury note falls below that of the 3-month note. Historically, this has been a reliable predictor of economic downturns, with a strong track record over a 12-18-month timeframe.
The New York Fed closely monitors this indicator and provides monthly updates on the probability of a recession occurring within the next 12 months.
As of January 2025, the probability was just 23%, but this is expected to change significantly due to the recent inversion in the coming months.
The inversion suggests that investors are becoming more risk-averse and are anticipating a slowdown in economic activity.
While the yield curve inversion has a strong forecasting history, it is not perfect, and there is no certainty that growth will turn negative this time around
Nvidia recently reported its Q4 results, showcasing impressive growth driven by strong demand for AI technology.
The company achieved a record quarterly revenue of $39.3 billion, marking a 78% increase from the previous year.
This growth was primarily fuelled by the success of Nvidia’s Blackwell AI supercomputers, which saw billions of dollars in sales in their first quarter.
The data centre segment, which constitutes the bulk of Nvidia’s revenue, also performed exceptionally well, generating $35.60 billion, up 16% from the previous quarter. Nvidia’s adjusted earnings per share for Q4 were $0.89, surpassing analysts’ expectations of $0.84.
Looking ahead, Nvidia provided strong guidance for Q1, forecasting revenue of $43 billion, which exceeds market expectations of $42.05 billion. The company also projected a gross margin of 70.60% for the upcoming quarter.
The first-quarter forecast indicates a year-over-year growth of approximately 65%, a deceleration from the 262% annual growth recorded in the same period the previous year.
Nvidia’s CEO, Jensen Huang reportedly highlighted the rapid advancements in AI technology and the company’s successful ramp-up of Blackwell AI supercomputers as key drivers of this growth.
Despite facing competition from Chinese AI firms like DeepSeek, Nvidia remains optimistic about the demand for its AI chips.
The company’s robust performance and positive outlook signal continued growth and innovation in the AI sector.
Tesla shares sank 8% on Tuesday 25th February 2025 and have now lost most of their gains that followed President Donald Trump’s election victory in November 2024.
The stock has plunged 25% this year, while the Nasdaq is down 1.5%.
It was also reported on that the company’s long-awaited upgrade of its partially automated driving system in China left owners unimpressed.
Tesla 3-month chart as of 25th February 2025
Tesla 3-month chart as of 25th February 2025
Bump to slump?
The ‘Trump Bump’ – a term referring to the surge in stocks and other assets, such as cryptocurrency, following Donald Trump’s election and inauguration seems to have plateaued.
This is most evident in Tesla shares, which plummeted Tuesday 25th February 2025, wiping out most of the post-election gains linked to CEO Elon Musk’s association with Trump.
Concerns about Tesla pertain to the company’s and Musk’s significant amount of time spent in Washington, D.C.
Investors are increasingly worried about impact of Trump’s tariffs on the economy. A U.S. Conference Board survey indicated pessimism regarding job availability, business conditions, and future income, along with heightened expectations for inflation in 2025.
The 10-year Treasury yield, considered an indicator of growth expectations, declined on this news. Stocks continued to fall. If this trend does not reverse soon, we could be facing a ‘Trump Slump.’
The escalating AI competition between the U.S. and China has taken a new turn with the emergence of DeepSeek, a Chinese AI startup that has introduced a low-cost AI model capable of rivaling the performance of OpenAI’s models.
This development has significant implications for data centres and the broader technology sector.
The rise of DeepSeek
DeepSeek’s recent breakthrough involves the development of two AI models, V3 and R1, which have been created at a fraction of the cost compared to their Western counterparts.
The total training cost for these models is estimated at around $6 million, significantly lower than the billions spent by major U.S. tech firms. This has challenged the prevailing assumption that developing large AI models requires massive financial investments and access to cutting-edge hardware.
Impact on data centres
The introduction of cost-effective AI models like those developed by DeepSeek could lead to a shift in how data centers operate.
Traditional AI models require substantial computational power and energy, leading to high operational costs for data centers. DeepSeek’s models, which are less energy-intensive, could reduce these costs and make AI technology more accessible to a wider range of businesses and organizations.
Technological advancements
DeepSeek’s success also highlights the potential for innovation in AI without relying on the most advanced hardware.
This could encourage other companies to explore alternative approaches to AI development, fostering a more diverse and competitive landscape. Additionally, the open-source nature of DeepSeek’s models promotes collaborative innovation, allowing developers worldwide to customise and improve upon these models2.
Competitive dynamics
The competition between DeepSeek and OpenAI underscores the broader U.S.-China rivalry in the AI space. While DeepSeek’s models pose a limited immediate threat to well-funded U.S. AI labs, they demonstrate China’s growing capabilities in AI innovation.
This competition could drive both countries to invest more in AI research and development, leading to faster technological advancements and more robust AI applications.
Broader implications
The rise of DeepSeek and similar Chinese and other AI startups could have far-reaching implications for the global technology sector.
As AI becomes increasingly integrated into various industries, the ability to develop and deploy AI models efficiently will be crucial.
Data centres will need to adapt to these changes, potentially investing in more energy-efficient infrastructure and exploring new ways to support AI workloads.
Where from here?
DeepSeek’s emergence as a significant player in the AI race highlights the dynamic nature of technological competition between the U.S. and China.
While the immediate impact on data centres and technology may be limited, the long-term implications could be profound.
As AI continues to evolve, the ability to innovate cost-effectively and collaborate across borders will be key to driving progress and maintaining competitiveness in the global technology landscape.
Microsoft has unveiled a new chip called Majorana 1 that it says will enable the creation of quantum computers able to solve ‘meaningful, industrial-scale problems in years, not decades’.
What is Microsoft’s Majorana 1?
It is the latest development in quantum computing – tech which uses principles of particle physics to create a new type of computer able to solve problems ordinary computers cannot.
Microsoft has announced a game-changing development in the world of quantum computing: the Majorana 1 chip. This revolutionary chip integrates eight topological quantum bits (qubits), setting a new standard for stability and resistance to environmental interference.
Microsoft. The new Majorana 1 chip
The Majorana 1 chip is built on a unique combination of indium arsenide, a semiconductor, and aluminum, a superconductor. This cutting-edge design enables the chip to create a topological state, a new form of matter that encodes information in a way that is inherently noise-resistant. This means that the Majorana 1 chip can maintain its quantum state longer, making it more reliable for complex computations.
What sets the Majorana 1 chip apart is its use of topoconductors, a new class of materials developed by Microsoft’s researchers over nearly two decades. These materials provide a high level of error protection, which is essential for practical quantum computing applications. The Majorana 1 chip is a significant step toward the ultimate goal of creating quantum computers with millions of qubits, capable of solving complex industrial and societal problems.
While the Majorana 1 chip is still in the research phase and not yet available for commercial use, it represents a monumental leap forward in quantum technology. Microsoft’s commitment to advancing quantum computing is evident in the substantial investment of time and resources required to develop this groundbreaking chip.
In summary, the Majorana 1 chip is poised to transform the landscape of quantum computing, offering a more stable and reliable platform for future innovations. This development marks a pivotal moment in the quest for practical and scalable quantum computing solutions.
What is Quantum computing?
Quantum computing is a revolutionary technology that uses the principles of quantum mechanics to process information in a fundamentally different way than classical computers, allowing for exponentially faster calculations in certain tasks.
It leverages qubits, which can represent multiple states simultaneously, enabling complex problem-solving and data analysis beyond the capabilities of traditional computing.
Microsoft says powerful quantum computers will be a reality in years not decades.
Elon Musk’s AI company, xAI, has recently released its latest AI model, Grok 3.
This new AI model is designed to be significantly more powerful and capable than its predecessor, Grok 2.
Enhanced Capabilities: Grok 3 boasts 10 times more computing power than Grok 2 and has been trained on an expanded dataset, including court case filings.
Reasoning Models: Grok 3 includes reasoning models that can carefully analyze and fact-check information before providing responses. This helps in avoiding common pitfalls of AI models.
Benchmark Performance: Grok 3 has outperformed other leading AI models, including OpenAI’s GPT-4o and DeepSeek’s R1, on various benchmarks such as AIME (math questions) and GPQA (physics, biology, chemistry problems).
New Features: The Grok app now includes a ‘DeepSearch’ feature that scans the internet and xAI’s social network, X, to provide summarised responses to user queries.
Subscription Plans: xAI has introduced a new subscription plan called SuperGrok, which offers additional reasoning capabilities and unlimited image generation.
Grok 3 is being hailed as the ‘smartest AI on Earth’ by Musk, and it’s expected to have a significant impact on various industries.
Definition
Grok is a neologism (a newly coined word or expression), referenced by Robert A. Heinlein for his 1961 science fiction novel Stranger in a Strange Land. It means to understand something so deeply that you become one with it.
Grok is a term used in computer programming to mean to ‘profoundly understand something‘, such as a system, a language, or an algorithm.
It is supposed to have ‘a bit of wit, a rebellious streak’ and it should answer the ‘spicy questions’ that other AI might dodge, according to a statement from xAI.
The S&P 500 closed at a record high Tuesday 18th February 2025 after investors shook off headwinds on the global trade and inflation
The S&P 500 index gained 0.24% to close at a record of 6129 on 18th February 2025. The Nasdaq Composite closed up at 20041 while the Dow Jones Industrial Average added finished the day at 44556.
S&P 500 hits new record high to close at 6129 as of 18th February 2025
S&P 500 hits new record high to close at 6129 as of 18th February 2025
The energy sector was the top performer in the S&P 500, increasing by 1.9%. Halliburton and Valero Energy spearheaded the gains. Technology stocks also gained.
The general consensus is that the market is still trying to break out of the consolidation it’s been in since early December. This week we see retail earnings, but news on Trumps tariffs could continue to be a wild card for the markets.
Wall Street is coming off a winning week. The Dow Jones gained around 0.6% last week, while the S&P 500 advanced 1.5%. The Nasdaq rose 2.6%.
Much of last week’s gains occurred later in the week after President Donald Trump’s proposal for reciprocal tariffs on countries that impose levies on U.S. goods reassured investors who were concerned that the tariffs would be more severe.
When it comes to investing, two assets often come to mind: gold and Bitcoin.
Both have their unique advantages and disadvantages, and choosing between them depends on your investment goals, risk tolerance, and market outlook.
Historical performance
Gold has been a reliable store of value for thousands of years. Its price has seen steady growth, with a notable increase of 60% from 2010 to 20241.
During the 1970s inflation crisis, gold rose by 2,300%, showcasing its ability to hedge against inflation. Gold ETFs have grown to around $270 billion in assets under management (AUM) by 2024.
Impressive growth some would say but wait… there’s a new kid on the block.
Bitcoin, on the other hand, is a relatively new asset, introduced in 2009. Despite its short history, Bitcoin has seen explosive growth, surging from $4 in 2011 to over $106,000 in 2024 – a growth of more than 2 million percent.
During the 2020-2024 inflationary cycle, Bitcoin increased by 1,185%, highlighting its potential as an inflation hedge.
Volatility and risk
Gold is known for its stability and long-term value preservation. Its volatility index (VIX) is relatively low, making it a safe haven during economic downturns. Investors with long-term goals often prefer gold for its consistent performance and lower risk.
Bitcoin, however, is highly volatile. Its price can fluctuate dramatically within short periods, making it a riskier investment. While Bitcoin offers the potential for high returns, it also comes with the possibility of significant losses. Investors must be prepared for the market’s ups and downs and have a higher risk tolerance.
Inflation hedging
Both gold and Bitcoin are considered effective hedges against inflation. Gold has a long history of maintaining its value during inflationary periods, making it a trusted asset for wealth preservation.
Bitcoin, as a digital asset, has gained recognition as ‘digital gold’ and is increasingly seen as a viable alternative for hedging against inflation.
Regulatory environment
Gold is a well-established asset with a clear regulatory framework. Central banks worldwide hold significant gold reserves, underscoring its role in financial stability. Bitcoin, however, operates in a relatively new and evolving regulatory landscape.
While some countries have embraced Bitcoin, others have imposed restrictions or bans, adding an element of uncertainty to its future.
Accessibility and liquidity
Gold is a tangible asset that can be easily bought and sold. It is widely accessible and has a liquid market, allowing investors to enter and exit positions with ease.
Bitcoin, while also highly liquid, requires a digital wallet and an understanding of cryptocurrency exchanges. Its accessibility can be limited by regulatory and technological barriers.
Is there a conclusion?
Choosing between gold and Bitcoin depends on your investment goals and risk tolerance. Gold offers stability, long-term value preservation, and a lower risk profile, making it suitable for conservative investors.
Bitcoin, with its potential for high returns and inflation hedging, appeals to those with a higher risk tolerance and a belief in the future of digital assets.
Ultimately, diversifying your portfolio with both assets can provide a balanced approach, combining the stability of gold with the growth potential of Bitcoin.
From a business perspective, Musk’s achievements are undeniable and even astonishing. The companies he leads are not only market leaders but also pioneers in their respective fields – consider how Tesla initiated the electric vehicle industry or how SpaceX successfully commercialised spaceflight.
Paradoxically, achieving success on a broad scale can have adverse effects. Investors appear to be increasingly concerned that Musk, despite his business acumen, is becoming distracted.
Tesla shares have declined over the past five trading days, dropping more than 6% on Tuesday 11th February 2025 as Chinese competitor BYD seems to be surpassing the company in AI-enabled autonomous driving.
If hands-free driving becomes a reality at Tesla, it could allow Musk to engage in other ventures without negatively impacting the company’s shares.
What you need to know today
BYD is a Tesla threat – but this is Elon Musk we’re talking about
Tesla shares fell 6.3% Tuesday 11th February 2025 after Chinese EV maker BYD said it will integrate DeepSeek into its autonomous driving technology and offer it in nearly all its vehicles.
Shares of BYD, the Chinese electric vehicle (EV) giant, surged to a record high on Tuesday 11th February 2025, following the announcement of its new driver assistance technology.
This move is expected to significantly enhance the driving experience and safety features of BYD’s vehicles.
BYD’s founder and chairman, Wang Chuanfu, announced the launch of the DiPilot system at a livestreamed event, emphasizing that advanced smart driving will become a standard safety feature, akin to seatbelts and airbags (time will tell on that statement).
The system includes features such as remote parking and autonomous highway navigation. These features reportedly are being integrated into over 20 models. Budget-friendly options priced below 70,000 yuan ($9,555) will also have the system.
DeepSeek AI integration
The integration of DeepSeek’s AI technology is a game-changer for BYD. DeepSeek, known for its innovative chatbot that rivals U.S. competitors such as OpenAI and others brings high-quality AI capabilities to BYD’s autonomous driving systems.
This partnership allows BYD to offer advanced intelligent features at a competitive price, putting it ahead of its rivals in the fiercely competitive Chinese EV market.
Analysts have praised BYD’s strategic shift from price-cutting to upgrading vehicle functions and have noted that BYD is now dictating the pace of technological features in the market.
The company’s stock rose by 4.5% to a record high in Hong Kong, reflecting investor optimism about the new technology.
BYD’s move to integrate advanced driver assistance systems into budget models is expected to intensify the EV price war. The company’s aggressive pricing strategy, combined with cutting-edge technology, positions it well to capture a larger market share.
With more than 20 models featuring the new driver assistance tech, BYD is set to lead the way in smart vehicle innovation.
As BYD continues to expand its presence globally, the integration of DeepSeek’s AI technology marks a significant milestone in the company’s journey towards becoming a leader in the EV industry.
The future looks promising for BYD as it continues to innovate and push the boundaries of automotive technology.
DeepSeek’s impact probably isn’t yet fully reflected in U.S. stocks
The ramifications of the Chinese startup DeepSeek, with its promise of delivering cheaper and more energy-efficient alternatives to harness artificial intelligence (AI), have yet to be fully reflected in U.S. equities.
If DeepSeek ends up delivering a less costly way forward – it will make it much easier and cheaper for smaller more typical companies to create AI ‘agents’ or AI opportunities for their businesses.
Under this scenario there will be ‘useful’ and meaningful benefits from DeepSeek that could bring huge earnings potential for a broader mix of companies beyond the current AI heavyweights through greater efficiencies and productivity from less-expensive AI solutions.
It also put huge sums being pledged for AI infrastructure by U.S. mega cap tech companies under a microscope. Rather than back down, the U.S. spending race has intensified.
Meta’s Chief Executive Mark Zuckerberg spoke a week ago of spending ‘hundreds of billions of dollars’ on AI infrastructure in the coming years, after pledging $60 billion to $65 billion on AI this year.
Alphabet announced AI investment for 2025, a bigger figure than Wall Street was anticipating.
Google forecast $75 billion in capital expenditures in 2025, a bigger figure than Wall Street was anticipating.
Microsoft reported its cloud and AI spending grew 95% in its fiscal second quarter to $22.6 billion.
Amazon has reported big AI investment too.
The spending frenzy on anything AI sends the market into a spin. How much more has to be spent before we see capital expenditures reduced or decrease is anyone’s guess right now – but current levels of AI expenditure are high, and returns will be expected.
“When is enough, enough?”
Or more to the point you might ask – when is ‘enough’ too much?
Fresh AI-spending commitments helped lift shares of Nvidia on while we saw a slump for Tesla shares in the week.
China this week saw the U.S. slap new 10% tariffs, while Canada and Mexico saw Trump threaten but delay 25% tariffs by 30 days. China retaliated in kind.
Catching up with the ‘Magnificent Seven’
Despite the high scrutiny on AI stocks, there is also much renewed focus from investors on other areas of the market.
There has been a bit of a rotation – while tech has been under pressure, defensive and rate-sensitive parts of the market have been gaining. This seems to be an emerging pattern.
But there should be reason for caution. For one thing, the growth rate of ‘Magnificent Seven’ earnings has been tailing off in recent quarters, especially since the group reached a 61% yearly rate in the fourth quarter of 2023 – the spend on AI investment has yet to fully appreciate the full return.
Forward analysts’ expectations have this percentage reportedly closer to 16% to 18% for the end of this year.
But that also would move the group closer to the roughly 12% to 13% yearly growth rate expected for the rest of the companies in the S&P 500 index, potentially making the high valuations of the ‘Magnificent Seven’ tougher to justify.
One of the most surprising things of the past couple of weeks, given the news around DeepSeek and shocks on the trade front, is the fact that stocks were still close to their all-time highs.
The market is pretty resilient right now, but tech stocks are sitting at a very high valuation – a pullback is due, even a correction (in my opinion).
The arrival of DeepSeek creates an alternative ‘cheaper’ AI option and that will unravel the status quo.
