Stock Market Recovers Completely in the US
Hey there! This morning, we've got a dose of business news from the FT News Briefing podcast. Here's a wrap-up of the key points you need to know to start your day.
[MUSIC PLAYING]
OpenAI has changed its course, abandoning plans to restructure as a for-profit company amidst backlash. The decision comes after former co-founder Elon Musk filed a lawsuit, with critics arguing the company might lose focus on its mission to benefit humanity through AI. CEO Sam Altman ensured outside pressure didn't motivate the move, stating that the team remains dedicated to their goals.
[MUSIC PLAYING]
The stock market dusted itself off after a tariff-induced tumble back in April 2025. The S&P 500 took a hit of up to 19%, but it has since bounced back and is currently flirting with its former levels. It's been a rollercoaster ride as investors keep a close eye on potential trade deals and tariff negotiations.
My colleague Kate Duguid has been charting this comeback, and she shares her insights with us today. Hey, Kate!
Kate DuguidHi there! On Friday, the S&P 500 climbed by 1.5%, marking a milestone in this recovery journey. The rally was fueled by robust job market data that painted a picture of a resilient labor force, showing only minor impacts from the tariffs thus far.
Marc FilippinoSo, Kate, why have indices generally recovered their earlier losses?
Kate DuguidWell, there's hope that trade deals will be hammered out soon, possibly reducing tariffs. Investors are hoping for improvements in US-China relations, as well as streamlined deals with other trading partners. There's uncertainty surrounding the longevity of even 10% tariffs and their impact on earnings, labor markets, and the broader US economy.
Marc FilippinoAre we out of the woods yet, Kate?
Kate DuguidFar from it. Though the effects of tariffs haven't shown up in the economic data yet, we don't want to get complacent. Many companies are uncertain about what to expect in the coming quarters, with tariffs looming large over their guidance.
[MUSIC PLAYING]
remained steady last week, but investors are expecting the Bank of England to lower interest rates this coming Thursday. The BoE governor has indicated that tariffs will affect the UK economy. Some analysts predict a quarter-point rate cut this week, with a few members even suggesting a half-a-point reduction.
[MUSIC PLAYING]
Artificial intelligence copyright infringement takes center stage in a lawsuit against Meta. A group of authors are accusing the tech giant of using their work to train its Llama AI models without permission. Meta is using the fair use defense and argues that it offers transformational open-source AI models, enabling users to be more innovative and creative.
Stay tuned for more details as the trial unfolds. That's all for today's briefing. Check out our show notes for more information on these stories. Thanks for tuning in, and we'll catch you tomorrow!
- The business decision made by OpenAI to abandon plans of restructuring as a for-profit company may have been influenced by the backlash and lawsuits related to its shift in focus, potentially indicating a changing trend in the technology sector and its approach to artificial intelligence.
- The recent resilience of the S&P 500, despite initial tariff-induced losses, has been fueled by robust job market data and optimism about potential trade deals, but investors remain cautious as the impact of tariffs on the broader US economy is still unclear.
- The Bank of England is expected to lower interest rates this coming Thursday due to the potential negative impact of tariffs on the UK economy, with some analysts predicting a quarter-point reduction, hinting at growing concerns about the economy in the context of global trade tensions.
