The Trump administration has shown a casual attitude towards the recent decline in stock market values, with Treasury Secretary Scott Bessent describing market corrections as "healthy" and "normal". The drop in the S&P 500 index, down 8% from its peak in February, is partly attributed to President Trump's tariff policies and the administration's relaxed approach. This market slump is concerning given the significant exposure of American households to stocks, with $38 trillion invested in listed companies at the end of last year, and a 128% increase in the value of these holdings over the past six years. A prolonged market downturn could have serious implications for both the economy and political landscape.
A key concern is the risk of a downward spiral between falling stock prices and weakened consumer confidence, with a notable drop in confidence recorded in early March. This has a direct impact on consumer spending, as lower stock values reduce household wealth. Additionally, many Americans have overextended themselves by taking margin loans to invest in stocks, further amplifying the potential risks.
The effects of the downturn are also politically significant, with Democrats more concerned about the economy than Republicans, reflecting a growing partisan divide in attitudes towards the market. Moreover, wealth from stocks is concentrated among high earners, meaning a market slump would disproportionately affect wealthier individuals, a group that has seen significant growth in consumption. The Trump administration’s indifference to stock market fluctuations may stem from the belief that its poorer voter base is less affected by such declines, but if the wealthy are hit hard, it could have broader consequences, potentially hurting both political parties.

Chinese stocks have outperformed American ones this year, with the MSCI China index surpassing its US counterpart by 20 percentage points, driven by excitement over tech firms like DeepSeek and Manus AI. However, foreign investment in China has fluctuated, dropping from 6.4% of domestically listed stocks in 2021 to 4% by 2024, due to slowing growth and government crackdowns on private firms.
The current market upswing has benefitted Hong Kong-listed high-tech stocks, with Chinese tech firms appearing cheaper than their American counterparts. Despite this, mainland stocks still face reluctance from investors due to three key issues: the aftermath of China's tech crackdown, a sluggish economy affected by the property industry slump, and tense political relations, especially with the US.
While some progress has been made, particularly in improving government-business relations, foreign investment remains cautious. Political tensions, especially with the US, have raised barriers for American investors, though investors from other countries may still see China as an opportunity. For Chinese policymakers, there is potential to capitalise on growing foreign interest, but more work is needed to fully revive investor confidence.

The recent surge in AI development from China has sparked concerns that the US is losing its leadership in the field. Some policymakers are even suggesting a new "Manhattan Project" to maintain American dominance. However, a rush towards superintelligent AI could be impractical and destabilising. The original Manhattan Project succeeded due to secrecy, which is now impossible to replicate, given the visibility of data centres and the international nature of AI research. Moreover, the exclusion of top researchers, many of whom are Chinese nationals, would harm America's AI development.
Pursuing superintelligent AI could also have destabilising military consequences, such as undermining nuclear deterrence or creating uncontrollable AI systems through "intelligence recursion". Furthermore, rival nations like China and Russia would likely respond with countermeasures, leading to potential escalation.
Instead of focusing on superintelligence, America could boost its competitiveness by strengthening its domestic supply chains for critical AI infrastructure and developing strategies to deter rivals from pursuing destabilising AI projects. This would include cyber-measures and espionage to disrupt foreign AI advancements. Ultimately, striving for superintelligence would be too risky, and America should focus on advancing AI applications that have practical benefits, while preventing rivals from gaining unchecked power in this area.

Norway’s sovereign wealth fund, Norges Bank Investment Management (the oil fund), is purchasing a 49% stake in two offshore wind energy projects from German utility company RWE for approximately 1.4 billion euros ($1.52 billion). The stake is in the Nordseecluster and Thor wind farms, which are currently under construction. RWE will continue overseeing the construction and operations of the projects. Located off the coasts of Germany and Denmark, the wind farms are expected to generate enough electricity to power over 2.6 million households. The deal is expected to close in the third quarter.

Apple and Elon Musk's SpaceX are in a rivalry over satellite-based communications, aiming to provide better cellphone connectivity in areas lacking traditional wireless signals. Apple has invested heavily in satellite technology through a partnership with Globalstar, while SpaceX has launched its own satellite network via Starlink. The competition centres around securing limited spectrum rights for signal transmission. Recently, SpaceX and T-Mobile sought Apple’s cooperation to integrate Starlink into iPhones, which resulted in an agreement for seamless satellite service on newer iPhones.
While the two companies are in competition, they also rely on each other’s technology to achieve their respective goals. Apple’s satellite service, enabling emergency texting and communication in remote areas, could potentially save lives. However, SpaceX has pushed federal regulators to block Apple’s expansion plans, further escalating tensions. Despite these conflicts, the companies continue to negotiate, with Apple exploring partnerships with other satellite providers to support its growing demand for satellite-based connectivity.

President Trump's tariffs are exacerbating inflationary pressures, particularly in goods prices, which had previously experienced deflation for two decades. Before the pandemic, prices for core goods had fallen, contributing to a low overall inflation rate. However, since 2023, goods prices have started rising again, partly due to tariffs on steel, aluminum, and Chinese imports. These tariffs are expected to push core inflation higher than the Federal Reserve's target of 2%.
The article explains that deflation in goods, driven by factors like trade and technological advancements, had previously kept prices stable. However, the lack of new low-cost imports, coupled with tariffs, is pushing prices up. As a result, companies are raising prices, particularly those dependent on tariffed countries like China, Canada, and Mexico. The increase in tariffs has also led to higher transportation costs and reduced competition, which allows domestic producers to raise prices. While tariffs may only cause temporary inflation increases, they could contribute to long-term inflationary pressures, requiring the Fed to maintain higher interest rates to control inflation.

Tesla investors are preparing for disappointing first-quarter delivery figures, which are expected to show a decline in global demand for the electric carmaker. The company will release its delivery data on 2 April, with forecasts predicting a 7% drop compared to the same period last year, largely due to a backlash against CEO Elon Musk. Protests targeting Musk and Tesla have occurred globally, and analysts have reduced their expectations, with one predicting deliveries will fall between 355,000 and 360,000 units, down from an initial estimate of 400,000.
Musk's involvement in US government affairs, particularly his role in cost-cutting initiatives, has damaged Tesla's brand, with some analysts suggesting his leadership is alienating the company's core customer base. Additionally, consumers are waiting for updates to the popular Model Y, contributing to the soft demand. Some analysts believe Musk’s polarising presence is hurting Tesla’s appeal, especially among its liberal consumer demographic.
Tesla is also facing challenges from tariffs imposed on foreign-made cars, including parts for its US-manufactured vehicles, which could lead to higher prices across the auto industry. Despite these issues, Musk acknowledged the impact of the tariffs but maintained that Tesla would weather the storm.

Hyundai is facing legal action from a customer, Elliott Ingram, who alleges that the company failed to warn him about a significant security vulnerability in its popular Hyundai Ioniq 5 electric car. Ingram’s car was stolen in under 20 seconds using a device that mimics the car's electronic key, a method now believed to be widely used by criminals. Ingram, who later had his car recovered, is seeking compensation and claims Hyundai should have informed customers about this security risk. He argues that, had he been aware, he could have taken additional precautions.
The thefts are linked to keyless technology that can be exploited by criminals using devices available online. Hyundai has acknowledged the issue, stating it is working with police to combat this form of theft and developing software updates to reduce the risk. The company insists its vehicles meet UK security standards and is offering updates for cars sold before February 2024. However, it has not planned a recall. The rise in car thefts has prompted government action, with new laws being introduced to ban the devices used for keyless theft, alongside tougher penalties for offenders.

Wall Street’s major indices saw sharp declines on Friday, with the S&P 500 falling 2%, the Dow Jones dropping 1.7%, and the Nasdaq slumping 2.7%. This was prompted by data highlighting persistent inflationary pressures, particularly in the Personal Consumption Expenditures (PCE) price index, which showed a rise in core inflation to 2.8% in February, above the Federal Reserve's 2% target. The report also revealed a rebound in consumer spending, adding to concerns over inflation.
Further market anxiety was caused by the Trump administration's tariff policies, especially the upcoming 25% tariff on auto imports, which negatively impacted stocks of companies like General Motors and Ford. Investors remain uncertain about the future economic direction, with concerns that Trump's fluctuating policies could lead to higher inflation and slower growth, complicating the Fed’s decision-making. As a result, market sentiment weakened, with consumer confidence also dropping to its lowest point since 2022. Attention is now on new tariffs expected to be unveiled on 2 April, with the EU reportedly considering concessions to Trump.

Saudi Arabia is facing increased pressure on its vast spending plans due to weak oil prices, which are hovering around $70 per barrel - well below the level required to balance its budget. The kingdom, which is pursuing ambitious projects under Crown Prince Mohammed bin Salman's Vision 2030, is likely to cut expenditure further beyond the planned 3.7% reduction for 2025. The country is also preparing to unwind its crude production cuts, starting in April, which is expected to drive prices even lower.
Despite a drop in oil revenues, Saudi Arabia continues to fund its extensive projects, including the Neom city development and major international events like Expo 2030 and the World Cup in 2034. These projects are funded largely through oil revenues and the Public Investment Fund (PIF). However, with oil prices at a three-year low, Saudi Arabia faces increasing challenges, including a projected budget deficit and declining dividends from state-owned Aramco.
To address the fiscal strain, the government is likely to increase borrowing, while keeping tight control over spending. Non-oil revenue has been rising, but it still makes up a small portion of total revenue, which remains heavily reliant on oil. Analysts have warned that further debt and slowed economic growth could negatively impact the kingdom’s credit rating.

Sweden’s Prime Minister, Ulf Kristersson, has warned that Europe must make its capital markets more attractive to prevent technology companies from listing on US stock markets. Sweden has already seen several homegrown tech firms, such as Spotify and Klarna, choose New York over Stockholm for their initial public offerings (IPOs). Kristersson highlighted that despite Europe producing more start-ups, the continent struggles to keep them due to better access to capital and investment in the US. He stressed the need for Europe to implement a capital markets union, which would create a unified investment market across the continent. While Sweden's IPO market has been strong, Kristersson acknowledged the challenge of competing with US markets, where valuations are more attractive. Tech executives echoed these concerns, pointing out the difficulty of avoiding the US for listings due to the capital and talent available there. Kristersson also discussed the importance of maintaining strong transatlantic ties, despite concerns over US policies.

Indonesia's rupiah has fallen to its weakest level against the US dollar since the 1998 Asian financial crisis, driven by concerns over President Prabowo Subianto’s policies and their impact on the country’s fiscal health. The currency dropped as much as 0.5%, briefly hitting 16,640 to the dollar, nearing its 1998 record low. While Bank Indonesia intervened in the market to stabilise the rupiah, investors are worried about Prabowo's costly fiscal plans, including a $28bn programme for free school lunches and support for pregnant mothers, which has strained government finances. Additionally, signs of an economic slowdown and the potential for interest rate cuts are adding pressure. The rupiah has been the worst-performing currency among major Asian economies this year, and the Jakarta stock index has also declined significantly. Analysts are concerned about Indonesia's fiscal policies and the political influence on its new sovereign wealth fund, which could add to market volatility.