Finance

2025 Kicks Off with a Stock Market Slump — What Could Spark a Recovery?

Stocks have had a rough start to 2025, with uncertainty surrounding President Trump's tariff policy making investors uneasy. Recent economic data has been disappointing, and even the best year-over-year corporate earnings growth in three years hasn't been enough to pull stocks out of their slump.

With the S&P 500 (^GSPC) essentially flat for the year and about 5% off its all-time high, strategists believe a rebound in economic growth is essential for the index to climb higher.

"We think that an improvement in the US economic growth outlook is necessary to fully reverse the recent weakness in the equity market," wrote Goldman Sachs US equity strategist David Kostin in a note to clients on Friday.

The recent market sell-off has been driven by declines in many of the "momentum" stocks that had been performing well in recent months. These are typically stocks that keep rising. However, some of this year's momentum leaders, such as Meta (META) and Palantir (PLTR), have struggled recently amid the market downturn. Other high-flying stocks from the past few years, including Nvidia (NVDA) and Tesla (TSLA), have also stumbled in 2025.

TECH

China Pledges Increased Support for AI and Science Innovation

On Wednesday, China announced plans to enhance support for the application of artificial intelligence (AI) models and the growth of venture capital investment, aiming to drive more technological breakthroughs and boost self-reliance. These initiatives were outlined in a government document prepared for the annual meeting of the National People's Congress (NPC), China's legislature.

The country aims to cultivate "industries of the future," including biomanufacturing, quantum technology, embodied AI, and 6G technology. To achieve this, China plans to explore new models for national laboratories and place significant support and "important responsibilities" on young scientists and engineers.

The report highlighted plans to back the application of large-scale AI models and the development of next-generation intelligent terminals and smart manufacturing systems. This marks the first mention of AI models in the work report, following global attention around the Chinese AI startup DeepSeek.

"China will work to create a conducive environment for innovation that encourages exploration and accepts failure," the report stated. Additionally, it outlined plans to accelerate the improvement of basic data systems and promote cross-border data flows.

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CRYPTO

Bitcoin on the Rise: The Catalysts Behind the Recent Price Jump

Bitcoin (BTCUSD) saw an uptick on Wednesday, with its price climbing amid growing speculation that the U.S. may scale back its tariff policies. This potential shift in trade relations helped trigger a broader market rally, boosting investor sentiment across various assets, including cryptocurrencies. The optimism surrounding possible tariff reductions contributed to increased demand for riskier assets, with Bitcoin benefiting from this renewed market confidence.