stocks

Billionaire Bill Ackman was busy in the second quarter, investing in two of the world’s largest tech companies. His hedge fund, Pershing Square Capital, started a new position in Amazon (AMZN 3.12%) and boosted its stake in Alphabet (GOOGL 3.10%) (GOOG 2.98%).

Ackman is a well-regarded investor known for running a concentrated portfolio: As of June 30, Pershing Square Capital’s portfolio had only 10 companies in it. So when it makes a big investment, it’s worth it for retail investors to pay attention and consider whether they want to follow.

Amazon

Pershing established a new position in Amazon in the second quarter, picking up 5.8 million shares. That made it the fund’s fifth-largest holding, accounting for 9.3% of its value as of Aug. 14.  

Amazon’s logistics network has always been the backbone of its e-commerce business, and now the company is employing artificial intelligence (AI) and even more robotics than before to make it even more efficient. The company is applying AI to such tasks as optimizing delivery routes, stocking warehouses more effectively, and directing drivers to hard-to-find drop-off locations in places like large apartment complexes.

Meanwhile, the company now has over 1 million robots working in its fulfillment facilities, and they’re being carefully orchestrated by its Deepfleet AI model. Its newer robots can do more than just lift heavy packages. Some can spot damaged goods better than humans (which lowers the number of returns), while some can even repair themselves. All of this saves money and speeds up shipping times.

AI is also strengthening Amazon’s advertising unit. Merchants can use its AI tools to create better product listings and ad campaigns. Advertising is a high-margin business that also has been one of the company’s fastest growing, with revenue up 23% last quarter.

Altogether, AI is helping drive strong operating leverage in Amazon’s e-commerce operations. Last quarter, its North American segment’s revenue rose 8% while its operating income climbed 16%. That kind of leverage is exactly what investors want to see.

Amazon’s cloud computing division, AWS, meanwhile, remains its most profitable segment and its fastest-growing. The company created the cloud infrastructure market and still holds a nearly 30% share of it. AI is now a major driver in that segment, too. Services like Bedrock and SageMaker allow customers to build and run models directly on AWS, while it recently introduced Strands and Agentcore to help customers build AI agents and safely run them in a secure, server-less environment. Meanwhile, the company’s custom-designed AI accelerator chips, Trainium and Inferentia, give it an edge in cost and performance. AWS continues to grow quickly: Revenue climbed 17.5% last quarter to $30.9 billion

Amazon is spending heavily on AI infrastructure, but history shows the company has a knack for winning big when it spends big. Trading at a forward price-to-earnings (P/E) ratio of about 30 based on analysts’ consensus 2026 estimates, the stock still looks appealing, particularly given its growth runway.

Alphabet

Amazon wasn’t the only tech stock Pershing was buying in the second quarter. It also picked up another 925,000 shares of Alphabet’s Class A stock. That increased its total stake in the company (which includes both Class A and Class C shares) by 8.6% to almost 10.8 million shares. Based on the latest public information, that made it the hedge fund’s third-largest holding, accounting for 15% of its value as of Aug 14.

Investors have worried that the growing use of AI chatbots will chip away at Alphabet’s Google Search business, but so far, that hasn’t happened. In fact, last quarter, Google Search’s revenue growth accelerated, increasing by 12% year over year to $54.2 billion. Alphabet has also built AI into its products. More than 2 billion people are already using AI Overviews in Google Search, and its new AI Mode is just starting to gain traction. The company is also using AI to advance its tools beyond simple text queries, with Google Lens and Circle to Search standing out as two prime examples. New commerce-focused tools like Shop by AI should also create new monetization opportunities for the company.

One key aspect of Alphabet’s competitive moat is distribution. Chrome currently controls two-thirds of the browser market, while its Android operating system runs more than 70% of smartphones. That makes Google the first touchpoint to the internet for billions of users. It also gives Alphabet a huge volume of data and search query histories that it can then funnel into its massive ad network.

Cloud computing is another big growth driver for Alphabet. Google Cloud’s revenue jumped by 32% in Q2 while its operating income more than doubled. Customers are drawn to Alphabet’s Gemini models, Vertex AI platform, and its custom-designed tensor processing units (TPUs). These TPUs lower costs for AI workloads and give Google Cloud a cost advantage. The business has finally reached scale and is now showing strong operating leverage.

Image source: Getty Images

Alphabet also has longer-term bets. It’s deploying its Waymo unit’s robotaxis into new cities as the driverless ride-share business shows strong momentum. Meanwhile, with its Willow quantum computing chip, it has made meaningful progress on error-reduction — one of the core challenges in quantum computing technology. These businesses are a long way from being mature, but their upside potential is enormous.

Despite all of this, Alphabet trades at just 19 times analysts’ 2026 earnings estimates. That is cheap for a company that’s an established leader in search, cloud, video streaming, mobile, and AI infrastructure. Among the big AI stocks, Alphabet looks the most attractively valued.

Solid buys

In my view, Amazon and Alphabet look like solid buys for long-term investors. While the stocks aren’t without risks, given their market positioning and current valuations, I think it makes sense to follow Ackman’s lead and own both stocks.

Dividend investing allows you to have the best businesses in the world automatically send cash to your account on a regular basis. Investors looking to boost their passive income can find attractive dividend yields right now in the consumer goods sector.

To give you some ideas, read why three Motley Fool contributors recently selected Home Depot (HD 3.84%), JD.com (JD 2.17%), and Target (TGT 1.98%) as strong buys right now.

Image source: Getty Images.

A clear industry leader

Jeremy Bowman (Home Depot): Long a leader in dividend growth, Home Depot could also regain its reputation for steady price appreciation soon.

The home improvement retailer has struggled over the last few years due to a sluggish housing market, but the business could reaccelerate soon. First, the company is delivering steady growth with comparable-store sales up 1.4% in the second quarter, and revenue up 4.9% to $45.3 billion. Earnings growth was flat.

Adjusting for one fewer week in the fiscal year, it sees full-year revenue up about 5%.

On the macro front, bets are increasing that interest rates could come down soon. As the labor market cools, investors have gotten more confident that the Federal Reserve will cut rates at its meeting in September, and mortgage rates have hit a nine-month low.

While Home Depot is showing that it can grow without help from the housing market, it would certainly benefit from a recovery in home demand.

Over the long term, the company has shown it can be consistently profitable as the leader in the huge home-improvement retail segment, with little direct competition aside from Lowe’s, and that duopoly seems to benefit both companies.

Home Depot should also benefit from pent-up demand related to the national housing shortage, which is now estimated at about 4 million homes.

It now offers a dividend yield of 2.3%, and its competition between growth and income is a great feature for any long-term investor.

A dividend stock with tremendous upside potential

John Ballard (JD.com): JD.com is China’s second-largest e-commerce company, behind Alibaba. Macroeconomic headwinds over the past few years have weighed on consumer spending and sent JD.com shares down 71% from their previous highs. But this has driven its dividend yield up to an attractive 3.21% based on its last annual payout in April.

JD.com distinguishes itself from its larger competitor by using a direct-sales model. Unlike Alibaba, it invests in its own inventory that it can deliver through its extensive warehouse network to nearly anyone in China within one day.

It is investing in artificial intelligence to improve its supply chain efficiency, which could lead to margin expansion and benefit the stock. Management credited improving supply chain capabilities for increasing its operating margin from 3.9% in the second quarter of 2024 to 4.5% a year later.

Revenue is growing at healthy rates. The company reported a top-line increase of 22% year over year in the second quarter, with quarterly active customers growing 40%.

The improving financials of the retail business only make the stock’s yield more attractive. It pays a dividend only once per year, but the recent $1 payment could increase over the next few years if margins and revenue continue to rise, which is likely in a growing economy.

With JD.com trading at a low forward price-to-earnings multiple of 12, investors could see exceptional returns just from the stock climbing to a higher earnings multiple. The 3% yield is a nice bonus while you wait for the market to re-rate the shares with a higher valuation.

Low price, high yield

Jennifer Saibil (Target): Target stock continues to slide, and it fell further after results for the 2025 fiscal second quarter (ended Aug. 2) were reported last week. Revenue dropped less than 1% from last year, but comparable-store sales fell 1.9%. Earnings per share (EPS) of $2.05 were down from $2.57 last year, but they beat Wall Street expectations by $0.01.

The main disappointment for the market, though, wasn’t the quarterly report. CEO Brian Cornell had announced a few months ago that he was ready to step down, and along with the second-quarter report, the company announced the incoming CEO as current chief operating officer Michael Fiddelke. He’s a Target lifer, having started as an intern when he was in business school. The market was looking for an outsider to breathe new life into the company, not more of the same.

Fiddelke says that Target has fallen behind in leading with style, leaning into core categories without the extra touch that has always made it stand out. In addition to his goal of bringing back that magic, he noted that operations have become a bit messy, with stores often out of merchandise due to acting as delivery hubs. While that’s been great for its digital program, which continues to thrive, it’s been less so for the store experience.

Can Fiddelke bring Target back to growth? That remains to be seen. But it has nearly 2,000 stores, a successful digital business, and many loyal fans. So its turnaround chances are strong, especially once the economy becomes more hospitable. Over the long term, it offers excellent potential for the patient investor.

In the meantime, shareholders can enjoy an amazing dividend. Target is a Dividend King, having raised its dividend annually for the past 54 years, an impressive track record that means it’s super reliable. At the shares’ current low price, Target’s dividend yields a high 4.5%, making this an excellent entry point for years of passive income and wealth generation.

In the stock market, $500 might not seem like much, where the top tickers often trade at hundreds or thousands of dollars per share. But with commission-free trades and fractional trading, it’s never been easier to get investing with just a few hundred dollars.

It might be tempting to invest that $500 in high-risk plays like meme stocks and cryptocurrencies to chase bigger and faster gains. However, it would be more prudent to park that cash in some stable blue-chip dividend stocks that can generate big long-term gains through their reinvested dividends.

Let’s take a look at two stable dividend plays that are well-suited for most income investors: Brookfield Asset Management (BAM 3.37%) and Ares Capital (ARCC 0.16%).

Image source: Getty Images.

1. The conservative play: Brookfield Asset Management

Brookfield Asset Management is one of the world’s top alternative asset management firms. Instead of investing in “traditional” assets like stocks, bonds, and T-bills, it invests in “alternative” assets like real estate, infrastructure projects, private equity, and credit markets. As an asset management firm, Brookfield’s growth can be gauged by its fee-bearing capital (FBC), or its total managed capital from its clients; its fee-related earnings (FRE), or its total earnings from its management and advisory fees; and its distributable earnings (DE), which represents its available cash flow for covering its dividends and interest payments.

From 2022 to 2024, Brookfield grew its FBC at a CAGR of 14%, its FRE at a CAGR of 8%, and its DE per share at a CAGR of 6%. Analysts expect its DE per share to rise 11% in 2025 and 17% in 2026. It aims to pay out at least 90% of its DE per share as dividends, and its latest dividend hike this February — which boosted its annual rate to $1.75 (a forward yield of roughly 2.9%) — actually exceeds its projected DE of $1.61 per share for 2025.

That payout ratio exceeds 100%, but it isn’t a red flag because its core business is still growing at a healthy rate. Over the next few years, Brookfield’s growth should be driven by the cloud and artificial intelligence (AI) markets, which are generating tailwinds for its investments in the infrastructure and renewable energy markets; and the inflation-driven rotation toward alternative assets. Its stock isn’t cheap at 31 times next year’s DE per share, but its stability justifies that higher valuation.

2. The high-yield play: Ares Capital

Ares Capital is the world’s largest business development corporation (BDC). BDCs provide financing to “middle market” companies that struggle to secure loans from traditional banks because they’re considered higher-risk clients. In exchange for taking on that risk, BDCs charge higher interest rates than traditional banks. They’re also required to distribute at least 90% of their taxable earnings as dividends to maintain a lower tax rate.

Ares spreads out its investments across 566 companies backed by 245 different private equity sponsors in its $27.1 billion portfolio. It allocates 58.6% of its portfolio to first lien secured loans, 5.7% to second lien secured loans, and 5% to senior subordinated debt. That diversification limits its exposure to single companies and protects it from potential bankruptcies. Ares provides floating-rate loans that are pinned to the Fed’s benchmark rates. It needs interest rates to stay in a “Goldilocks” zone to thrive: low interest rates will throttle its profit growth, but high interest rates could choke the fledgling companies in its portfolio.

Analysts expect the Fed’s recent rate cuts to reduce Ares’ EPS 14% to $2.01 in 2025 and another 2% to $1.98 in 2026, but it can still easily cover its forward dividend rate of $1.92 per share — which equals a whopping forward yield of 8.6%. Its earnings growth should rise again as interest rates stabilize, and its stock looks dirt cheap at 11 times next year’s earnings. So for now, it’s a great place to invest a few hundred dollars and earn some big dividends.

The financial sector is dominated by big banks which mainly focus on generating stable profits instead of breakneck growth. However, a new generation of fintech companies — which are modernizing traditional payment and banking services with their tech platforms — are growing a lot faster than those aging industry leaders.

But it can be tough to separate the winners and losers in that fragmented fintech market. So today, I’ll discuss three potential winners which have plenty of long-term growth potential: Upstart (UPST 8.34%), Adyen (ADYE.Y 2.86%), and Nu Holdings (NU 1.94%).

Image source: Getty Images.

1. Upstart

Upstart is an online lending marketplace that uses AI to approve loans. Instead of using traditional data like an applicant’s annual income or credit score, it uses non-traditional data points like standardized test scores, GPAs, and previous jobs to approve a broader range of loans for younger and lower-income applicants with limited credit histories.

Upstart doesn’t provide any loans of its own. It only serves as an AI-powered middleman for its partners, which mainly include banks, credit unions, and auto dealerships. It generates most of its revenue by charging those partners processing fees for approving their loans.

Upstart suffered a severe slowdown in 2023 as soaring interest rates curbed the market’s appetite for new loans. But its growth accelerated again in 2024 as interest rates declined, and analysts expect its revenue and adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) to grow at a CAGR of 36% and 245%, respectively, from 2024 to 2027. Those are incredible growth rates for a stock that trades at 21 times next year’s adjusted EBITDA. The near-term concerns about slower interest rate cuts are likely squeezing its valuations, but its stock could soar a lot higher once those headwinds dissipate.

2. Adyen

Adyen is a Dutch fintech company that doesn’t provide any consumer-facing payment apps. Instead, it develops backend software for processing payments, analyzing customer data, and organizing financial information. Its software works behind the scenes and can be directly integrated into a merchant’s existing online, mobile, and on-store payment platforms. It also enables merchants to develop their own digital wallets and branded payment cards.

That flexibility makes it popular choice for businesses that don’t want to lock themselves to a bigger payments platform like PayPal (PYPL 3.43%). That’s probably why eBay, PayPal’s former parent company and top e-commerce partner, chose Adyen to replace PayPal as its preferred payment platform in a five-year transition from 2018 to 2023.

Adyen’s revenue growth accelerated during the pandemic as more customers ramped up their online spending, but it suffered a slowdown in 2022 and 2023 as it lapped those gains. Rising interest rates, geopolitical conflicts, and other macro headwinds exacerbated its slowdown.

But Adyen’s growth accelerated again in 2024, and analysts expect its revenue and adjusted EBITDA to rise at a CAGR of 22% and 28%, respectively, from 2024 to 2027. Adyen still looks reasonably valued at 22 times next year’s adjusted EBITDA, and it should keep growing as it pulls more merchants away from centralized payment platforms.

3. Nu Holdings

Nu Holdings owns NuBank, the largest digital bank in Latin America. It’s based in Brazil, and it also provides its services in Mexico and Colombia. Without any brick-and-mortar branches, it expanded much faster than traditional banks. It served 122.7 million customers at the end of the second quarter of 2025, compared to 33.3 million customers at the end of 2021. As Nu gained more customers, it increased the stickiness of its platform with credit cards, e-commerce services, and cryptocurrency trading tools.

As a result, its average revenue per active customer (ARPAC) jumped from $4.50 in 2021 to $12.20 in its latest quarter. Its average cost for serving each customer also held steady, and its margins expanded. Nu has plenty of room to grow because about a quarter of Latin America’s adult population remains unbanked.

From 2024 to 2027, analysts expect Nu’s revenue and net income (which turned positive in 2023) to rise at a CAGR of 23% and 36%, respectively. Yet its stock still looks dirt cheap at 18 times next year’s earnings per share (EPS) — presumably because investors are concerned about the persistent inflation and political instability in its top markets. If you expect Nu to overcome those challenges — as it did in the past — then it deserves a much higher valuation.

Brookfield Asset Management (BAM -0.61%) manages over $1 trillion in assets, making it one of the largest alternative investment managers in the world. The company is growing briskly as more investors look to diversify into alternative assets.

The company’s robust growth potential makes it one of the best financial stocks you can buy today. Here’s a look at its impressive growth profile.

Image source: Getty Images.

Rapidly rising fee-based income

Of Brookfield’s $1 trillion in assets under management (AUM), about $563 billion currently generates fees. Over the past year, this fee-bearing capital produced $2.7 billion in fee-related earnings. Brookfield returns most of this income to shareholders through a dividend that currently yields close to 3%.

Brookfield sees strong growth ahead for its fee-bearing assets, earnings, and dividend payments through 2029. The company expects to more than double its fee-bearing capital to $1.1 trillion by the end of the decade by putting more of the capital it has already raised from investors to work and attracting new capital. Key growth drivers include rising investor demand for alternatives, new fund launches, and expanding into new capital sources, such as insurance companies and high-net-worth investors.

As Brookfield’s fee-bearing capital grows, the company expects it to drive 17% compound annual fee-related earnings-per-share growth through the decade. Distributable earnings per share are on track to rise even faster at 18% annually, helped by the realization of carried interest (its share of the profits from funds it manages above certain return thresholds). By 2029, Brookfield estimates it will generate $2 billion in carried interest alone.

With earnings rapidly rising, Brookfield expects to grow its dividend by more than 15% per year. This combination of rising earnings and dividends positions the company to deliver strong total returns over the next five years.

Data by YCharts.

The S&P 500 (^GSPC -0.40%) slipped 25.6 points, or 0.4%, to 6,370.17 on Thursday, marking its fifth straight daily decline. Losses were broad, with weakness across technology and cyclical sectors, as investors grew cautious ahead of key central bank commentary.

The Nasdaq Composite (^IXIC -0.34%) also moved lower, dropping 72 points, or 0.3%, to finish at 21,100.31. Tech stocks continued to face pressure amid uncertainty over how the Federal Reserve will balance slowing labor market signals with still-sticky inflation.

The Dow Jones Industrial Average (^DJI -0.34%) joined the decline, falling 152.81 points, or 0.3%, to 44,785.50. Financials and industrials slipped alongside technology, leaving all three major benchmarks in negative territory.

Looking ahead, attention is squarely on the Jackson Hole Economic Symposium, where Fed Chair Jerome Powell is set to speak on Friday. Markets are searching for clarity on whether policymakers will move toward easing or maintain a cautious stance given the mixed economic backdrop. Powell’s remarks could prove pivotal in shaping expectations for the September meeting and the broader trajectory of rates.

Market data sourced from Google Finance and Yahoo! Finance on Thursday, Aug. 21, 2025.

Published on
12/08/2025 – 15:34 GMT+2

ADVERTISEMENT

Russian markets are reacting positively to the upcoming visit by President Vladimir Putin to the United States — his first since 2015 — with the MOEX Russia Index climbing above 2,950 points, its highest level since late April.

The index initially rose last Wednesday as Putin met with Donald Trump’s special envoy Steve Witkoff in Moscow. It then began to climb again as the location of the Trump-Putin summit was announced on Friday.

On Tuesday at around 15.15 CEST, the MOEX was trading at 2,959.63, a bump of 1.2% compared to its close at around 2,924.63 on Friday.

Investors are hopeful about a diplomatic breakthrough at the upcoming Trump–Putin meeting in Anchorage, Alaska, likely counting on an easing of sanctions or new trade channels being unlocked.

The jump was buoyed by Russian energy giants, with Gazprom shares climbing 3.65% and Novatek surged 5.44%, according to the Moscow Times.

Geopolitical buzz

Geopolitical buzz can swing markets as investors are encouraged by the possibility of conflict resolution or escalation.

Just the prospect of high-level talks can trigger climbs in sectors tied to trade, energy or infrastructure.

However, uncertainty or lack of results can just as quickly reverse the gains, which could happen if the much-anticipated summit does not produce any tangible results — something that is likely due to the fact that European powers are so far not involved in the talks between Trump and Putin.

It also remains unclear how Ukrainian President Volodymyr Zelenskyy will be incorporated in the talks, as he and European powers insist there can be no lasting deal without Kyiv agreeing to it as well.

Before the 2022 sanctions caused by the full-scale invasion of Ukraine, the MOEX Russia Index was trading near record highs above 3,800 points in late 2021, backed by strong oil prices and post-pandemic recovery momentum.

ADVERTISEMENT

European equities have entered what is historically the most challenging stretch of the calendar year, as August and September consistently deliver the weakest returns for the region’s stock markets.

Following a strong first half in 2025 and a slightly positive July, history suggests that the summer momentum in European equities often loses steam as August arrives.

The month is typically defined by thinner trading volumes, greater market sensitivity to economic and geopolitical headlines, and a consistent pattern of higher volatility.

August: The weakest month for European indices

Analysis of the past three decades reveals a clear seasonal downturn in August.

The EURO STOXX 50, Europe’s blue-chip benchmark, has averaged a 1.66% decline during the month over the past 30 years, making it the worst-performing month of the year.

It has ended August in positive territory only 43% of the time, and the broader STOXX Europe 600 tells a similar story.

Over the past 24 years, this index has fallen by an average 0.7% in August, also with a 43% winning ratio. The most brutal August came in 1998, when the EURO STOXX 50 plunged 14.4%, followed closely by 2001’s 13.79% loss.

Country indices echo August’s negative trend

Zooming in on national markets, the pattern of August weakness is equally pronounced.

This period is the weakest month for Germany’s DAX, which posts an average decline of 2.2% and finishes in positive territory just 47% of the time.

In France, the CAC 40 drops by 1.47% on average in August, narrowly ahead of September’s 1.49% average fall, and sees only a 37% winning rate.

Italy’s FTSE MIB and Spain’s IBEX 35 also see the negative sign, logging average August losses of 0.7% and 0.9%, respectively.

German stocks: Some of the weakest August seasonality

A group of Germany’s blue chips consistently show downward August bias, with some of them marking it as their worst month of the year, both in terms of returns and win probability.

According to TradingView data, some of the hardest-hit stocks include:

• Thyssenkrupp AG leads the decline, tumbling an average 4.6% in August with a win rate of just 30%, meaning it has posted gains in only 9 of the past 30 years.

• BMW AG averages a 4.1% loss in August with just a 37% win rate. Volkswagen AG, meanwhile, falls 3.3% and ends the month higher only 27% of the time — proof that even automakers aren’t spared from late-summer volatility.

• Deutsche Bank AG, Germany’s largest lender, averages a 3.47% drop in August and matches Thyssenkrupp’s 30% win ratio.

• Utility giant E.ON SE and industrial titan Siemens AG also feel the seasonal drag, both slipping by nearly 2%, with win rates of 37% and 40%, respectively.

• Deutsche Börse AG, operator of Germany’s stock exchange, and consumer goods firm Beiersdorf AG both see their weakest performance in August, falling 1.72% and 1.66% on average, with win rates of 48% and 39%, respectively.

Bottom line: August’s seasonal slump hard to ignore

With the EURO STOXX 50 and STOXX 600 up 8% and 7%, respectively, European equities have delivered a solid year-to-date performance.

Much of this rebound has come on the back of a strong recovery from April’s tariff-induced downturn, mirroring a broader global equity upswing.

But history warns that August marks a persistent seasonal soft spot — particularly for Germany’s corporate heavyweights, which tend to underperform more than their European peers.

From broad indices to blue-chip stocks, the month shows a consistent pattern of lower returns, thinner liquidity, and heightened vulnerability to negative news flow.

While no seasonal trend guarantees future performance, August remains, by many measures, the most challenging month for European investors.

ADVERTISEMENT

Investors reacted to US strikes on Iran over the weekend as Iran and Israel continued to trade missile fire on Monday morning.

The price of Brent crude oil rose around 1.53% to $78.19 a barrel as of around 7.15 CEST, while WTI rose 1.48% to $74.93 a barrel.

On Sunday, US forces attacked three Iranian nuclear and military sites, stating that Tehran must not be allowed to possess a nuclear weapon.

President of Iran Masoud Pezeshkian said that the country “will never surrender to bullying and oppression”, while Iranian foreign minister Abbas Araghchi has arrived in Moscow for talks with Russian president Vladimir Putin.

Futures for the S&P 500 slipped 0.13% to 6,010.25 and Dow Jones Industrial Average futures dropped 0.2% to 42,431.00. Nasdaq futures fell 0.18% to 21,804.50 on Monday morning.

In Asian trading, Tokyo’s Nikkei 225 index fell 0.19% to 38,331.12, the Kospi in Seoul dropped 0.3% to 3.012,88, and Australia’s S&P/ASX 200 declined 0.37% to 8,474.40.

Hong Kong’s Hang Seng and the Shanghai Composite Index were in positive territory, with respective gains of 0.35% to 23,611.68 and 0.13% to 3,364.29.

The conflict, which flared up after an Israeli attack against Iran on 13 June, has sent oil prices higher linked to Iran’s status as a major oil producer.

The nation is also located on the narrow Strait of Hormuz, through which much of the world’s crude oil passes.

Investors are concerned that Tehran might decide to bomb oil infrastructure in neighbouring countries or block tankers from travelling through the Strait of Hormuz.

Shipping company Maersk said on Sunday that it was continuing to operate through the strait, adding: “We will continuously monitor the security risk to our specific vessels in the region and are ready to take operational actions as needed.”

According to vessel tracking data compiled by Bloomberg, two supertankers Coswisdom Lake and South Loyalty U-turned in the Strait of Hormuz on Sunday.

The situation now hinges on whether Tehran decides to opt for aggression or a more diplomatic response to US and Israeli strikes.

Iran could attempt to close the waterway by setting mines across the Strait or striking and seizing vessels. Even so, this would likely be met by a forceful response from the US navy, meaning the oil price spike may not be sustained.

Some analysts also think Iran is unlikely to close down the waterway because the country uses it to transport its own crude, mostly to China, and oil is a major revenue source for the regime.

If Tehran did successfully close the Strait, this would cause a wider price spike for transported goods and complicate the deflationary process in the US, potentially keeping interest rates higher for longer.

On Monday morning, Trump also floated the possibility of regime change in Iran.

“If the current Iranian regime is unable to make Iran great again, why wouldn’t there be regime change?” said the US president on Truth Social.

Vice-president J.D. Vance had commented earlier that the administration did not seek regime change in Iran.

Crude oil prices jump more than 4 percent amid fears the US may join Israel’s offensive against Iran.

Oil prices have spiked amid fears that the Israel-Iran crisis could spiral into a broader conflict involving the United States.

Brent North Sea Crude and West Texas Intermediate – the two most popular oil benchmarks – rose 4.4 percent and 4.3, respectively, on Tuesday as US President Donald Trump demanded “unconditional surrender” from Tehran.

The benchmarks stood at $76.45 per barrel and $74.84 per barrel, respectively, following the jump.

Oil prices edged up further in early trading on Wednesday, with both benchmarks about 0.5 percent higher as of 03:30 GMT.

US stocks fell on the rising geopolitical tensions overnight, with the benchmark S&P500 and tech-heavy Nasdaq Composite declining 0.84 percent and 0.91 percent, respectively.

Israel has bombed multiple oil and gas facilities in Iran since Friday, including the South Pars gasfield, the Fajr Jam gas plant, the Shahran oil depot and the Shahr Rey oil refinery.

While there has been little disruption to global energy flows so far, the possibility of escalation – including direct US involvement in Israel’s military offensive – has put markets on edge.

On Tuesday, Trump ratcheted his rhetoric against Iran, adding to fears that his administration could order a military strike against Iran’s uranium enrichment facility at Fordow.

In a thinly veiled threat against Iranian Supreme Leader Ayatollah Ali Khamenei, Trump said in a Truth Social post that the US knew his location but did not want him killed “for now”.

Iran has the world’s third-largest reserves of crude oil and second-largest reserves of gas, though its reach as an energy exporter has been heavily curtailed by US-led sanctions.

The country produced about 3.99 million barrels of crude oil per day in 2023, or 4 percent of global supply, according to the US Energy Information Administration.

Iran also sits on the Strait of Hormuz, which serves as a conduit for 20-30 percent of global oil shipments.

Nearly all of Iran’s oil exports leave via the Kharg Island export terminal, which has so far been spared from Israeli bombing.

“In the context of seeking to destabilize Iran, Israel may choose to strike its oil exports, believing that working to finish off a hostile regime is worth the risk of alienating allies concerned with potential price escalation,” Clayton Seigle, a senior fellow at the Center for Strategic and International Studies in Washington, DC, wrote in an analysis on Monday.

“Israeli strategists are likely well aware that Iran’s oil export capacity is quite vulnerable to disruption. Its offshore oil export terminal at Kharg Island accounts for nearly all of its 1.5 million barrels per day average export volume.”

June 13 (UPI) — Oil and gold prices jumped Friday as stocks fell in response to Israeli airstrikes on Iran Thursday night.

Crude oil futures have been in the green all day so far, with an open of $68.90 that rose as high as $77.62 before falling back a bit, as by 11:29 a.m. the price was $72.24, which still stands as a 6.17% upsurge.

The stock market on the other hand is down all around, with the Dow Jones Industrial Average being the hardest hit so far, down to 42,509.25 as of 11:36 a.m., which is actually up from its worst point of the day when it plummeted to 42, 259.84 at 10:30 a.m.

The Nasdaq Composite also crept up from a 10:30 a.m. low of 19,381.74 to 19,539.49 at 11:34 a.m., which is still down 0.63%. The S&P 500 also saw a 10:30 a.m. worst at 5,975.91, but rose to 6,012.26 by 11:36 a.m., still pointed downwards at 0.55%.

Aside from oil, gold has been a bright spot for investors Friday, as gold futures were $3,448.80 at 11:28 a.m., just a tick down from its $3465.80 peak of the day so far, still up 1.36% and not far from its record high of $3,500.05, set in April.

Israel reported to have attacked nuclear facilities and missile factories in Iran Thursday that also killed some Iranian military commanders. Iran has since retaliated by launching several drones at Israel in what could evolve into a prolonged conflict.

Published on
03/06/2025 – 15:44 GMT+2

ADVERTISEMENT

Major European steel giants saw their share prices falter on Tuesday afternoon, as investors continue to weigh the impact of US President Donald Trump’s plan to double steel and aluminium tariffs from 25% to 50%, with the latter set to take effect from 4 June. 

The announcement has escalated trade tensions and drawn significant criticism from worldwide trade partners. Trump, meanwhile, claims the move will make the US steel industry even stronger. 

He said in a post on his social media platform Truth Social: “Our steel and aluminum industries are coming back like never before. This will be yet another BIG jolt of great news for our wonderful steel and aluminum workers. MAKE AMERICA GREAT AGAIN!”

German steel company Thyssenkrupp’s share price declined 0.5% on Tuesday afternoon on the Frankfurt Stock Exchange. Salzgitter AG’s share price also declined on the exchange, by 0.4%.

Following the trend, ArcelorMittal SA’s stock dipped 1.1% on the Euronext Amsterdam exchange on Tuesday afternoon, while Austrian steel company Voestalpine AG’s share price declined 0.8% on the Vienna Stock Exchange. 

On the other side of the Atlantic, however, major US steel companies such as Cleveland-Cliffs, Nucor, and Steel Dynamics saw their share prices surge on Monday. 

Cleveland-Cliffs’ share price closed 23.2% higher, whereas Nucor’s share price jumped 10.1%. Steel Dynamics’ share price also closed higher, up 10.3% on Monday. 

US businesses risk significant harm due to tariffs

The unpredictability of recent US tariffs continues to pose considerable risks to US businesses, despite Trump’s reassurances that tariffs will benefit the economy. This is mainly because several US companies with international operations could be forced to scramble to find alternative foreign suppliers and customers.

It is also remains unclear how long steel and aluminium tariffs could stay at the 50% level proposed, as Trump continues to negotiate other tariffs with various countries. 

Felix Tintelnot, professor of economics at Duke University, told TIME: “We’re talking about expansion of capacity of heavy industry that comes with significant upfront investments, and no business leader should take heavy upfront investments if they don’t believe that the same policy [will be] there two, three, or four years from now.

“Regardless of whether you’re in favour [of] or against these tariffs, you don’t want the President to just set tax rates arbitrarily, sort of by Executive Order all the time,” he added.

Tintelnot also highlighted that increasing the price of aluminium, which is a very common input material in several sectors such as automotive and construction, would, in turn, hurt those industries, even if there may be some advantages to the domestic US steel and aluminium sectors.

By Tina Teng

Published on
27/05/2025 – 7:49 GMT+2

ADVERTISEMENT

Shares of BYD, the largest Chinese electric vehicle brand, tumbled 8.6% on Monday following news that the company offered steep discounts in some models, sparking concerns about a fresh price war in China’s EV markets.

The decline continued in Tuesday’s Asian session, with BYD shares falling a further 4% in Hong Kong as of 5am CEST. Despite the drop, the stock remains up more than 50% year-to-date on the Hong Kong Stock Exchange. In contrast, global competitor Tesla saw little change in its share price on Monday, but remains down 13% year-to-date in 2025.

The aggressive pricing strategy has raised concerns over slowing EV demand amid persistent weakness in the Chinese economy and heightened US-China trade tensions. Other major Chinese EV makers also saw declines on Monday, with shares of Geely, Great Wall Motor, and Xpeng falling between 4% and 9% due to fears that deeper discounts could squeeze sector profit margins.

A sweeping price cut

BYD announced broad price reductions across 22 electric and plug-in hybrid models, effective until 30 June, according to a post on the company’s official Weibo account. The discounts, which range from 10% to 30%, apply to vehicles from its Ocean and Dynasty series. The most significant cut was for the Seal 07 DM-i model, with a discount of 53,000 yuan (€6,460), or 34%.

Analysts expect rival Chinese carmakers to follow BYD’s lead as domestic competition intensifies. The pricing strategy also appears aimed at reducing the excess inventory of older models. In the first four months of 2025, BYD’s dealer inventory rose by approximately 150,000 units, equal to around half a month’s worth of retail sales, according to CnEVPost.

Citi analysts estimate that the price reductions could drive a 30% to 40% weekly surge in sales. This may potentially offset margin pressure.

BYD growth remains robust, surpassing Tesla in European sales

Despite investor concerns, BYD remains on a strong growth trajectory and continues to challenge Tesla in global markets. In April, BYD reported 380,089 sales of new energy vehicles (NEVs), a 21% year-on-year increase. Overseas sales also set a new record for the fifth consecutive month.

In a key milestone, BYD outsold Tesla in Europe for the first time last month, with 7,231 new battery-electric vehicles registered, a 169% year-on-year jump. By comparison, Tesla’s sales have fallen across Europe in 2025, a trend attributed in part to growing anti-Tesla sentiment linked to CEO Elon Musk’s political involvement.

During the first quarter, BYD sold nearly 1 million vehicles, placing it firmly on track to achieve its 2025 target of 5.5 million annual vehicle sales. The company reported a net income of 9.15 billion yuan (€1.11 billion), with a gross profit margin of 20%. This compares with Tesla’s $409 million (€359 million) and a 16% margin over the same period.

BYD is also investing in advanced driver-assistance systems. The company’s adoption of DeepSeek’s R1 AI model is expected to rival Tesla’s Full Self-Driving (FSD) technology, potentially at a significantly lower cost.

In addition, BYD is China’s second-largest battery manufacturer after CATL, giving it a competitive edge in cost control and vertical integration.

BYD is likely to remain less impacted by US tariffs as it does not sell passenger vehicles to the US. Instead, it is focusing on Southeast Asia and South America for international growth. The company is also establishing a manufacturing plant in Hungary, which is expected to boost European sales.

ADVERTISEMENT

Risk-on sentiment continued to dominate global market trends during Monday’s Asian session after officials from the US and China signalled “substantial progress” following two days of trade negotiations in Switzerland over the weekend.

China’s Vice Premier, He Lifeng, described the meeting as “an important first step” towards resolving differences, with both sides agreeing to establish a mechanism for further discussions. However, no specific details were provided regarding the points of agreement or the timeline for subsequent meetings. US Treasury Secretary Scott Bessent stated that more information would be shared on Monday, while he noted that a joint statement would be released.

Risk-on prevails

Optimism toward a potential de-escalation in trade tensions between the US and China fuelled risk-on sentiment, with stock markets rallying and safe-haven assets declining.

As of 5:30 am CEST, US stock futures had surged, with the Dow up 1.12%, the S&P 500 rising 1.46%, and the Nasdaq Composite gaining 1.93%. European equities were also poised for a higher open. Among major stock futures, Germany’s DAX advanced 0.85%, reaching a fresh high; the Euro Stoxx 600 rose 0.8%; and the UK’s FTSE 100 climbed 0.36%.

Asian equity markets also posted gains. Hong Kong’s Hang Seng Index rose 0.9%, Japan’s Nikkei 225 added 0.1%, the ASX 200 gained 0.28%, and South Korea’s Kospi advanced 0.7%.

Conversely, gold prices declined sharply as demand for safe-haven assets eased. Spot gold fell 1.4% to $3,279 per ounce, marking its lowest level since 5 May.

Meanwhile, haven currencies, including the euro, the Japanese yen, and the Swiss franc, weakened further against the US dollar, falling to their lowest levels since 10 April.

Markets await details of trade talks

Uncertainty remains as investors await further information regarding the trade discussions between the world’s two largest economies.

“Greater clarity on these matters, to provide firm backing to the apparent more conciliatory tone of rhetoric seen from both sides, will be needed to give markets additional confidence that the peak of trade uncertainty and tit-for-tat tariffs is indeed in the rear-view mirror, and to unlock the door to a more durable and sustainable firming in risk appetite,” wrote Michael Brown, a senior research strategist at Pepperstone Group in London.

“For the time being, however, given the prevailing uncertainty, I’m inclined to fade this strength in the dollar and equities — at least in the short term,” he added.

The S&P 500 has rebounded nearly 10% since US President Donald Trump indicated a substantial cut to tariffs on China in late April. Nonetheless, the benchmark index remains negative year-to-date, down 3.8%. Meanwhile, the US dollar index (DXY) has dropped more than 7% this year, despite the recent rebound.

According to Bloomberg, the US is considering reducing tariffs on Chinese goods to below 60% as a first step, while seeking to negotiate the removal of Chinese restrictions on rare earth exports to the US. In early April, Beijing announced export restrictions on a wide range of critical minerals — including germanium, gallium, antimony, and magnets — potentially disrupting production in American electric vehicles and other electronic devices.