Finance

Traders work on the floor at the New York Stock Exchange on June 23, 2025.
Brendan McDermid | Reuters

An aggressive trade war, Middle East escalation and AI competitions overseas — None of 2025’s big curveballs managed to spoil the market’s epic comeback from the year’s lows as stocks stand within reach of a new record. Here’s why.
The S&P 500 is just 0.85% away from closing at a new record, rebounding from a near 20% sell-off in April. The tech-focused Nasdaq 100 is already one step ahead, hitting an all-time high on Tuesday. The latest leg higher came as investors bet a ceasefire in the Middle East could prevent a major disruption to global oil supply.

“I’m surprised by the magnitude of the rebound,” said Kevin Simpson, portfolio manager at Capital Wealth Planning. “When you factor in the geopolitical backdrop — the ongoing conflict, volatility and uncertainty — I wouldn’t have expected the S&P 500 to snap back to new highs this quickly. This kind of strength speaks to just how much liquidity is still in the system and how eager investors are to buy dips in a market dominated by megacap tech and AI enthusiasm.” 

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Overall, the wall of worry has been crumbling little by little over the past four months. Perhaps most importantly, President Donald Trump backed off from the stiffest tariffs on key U.S. partners as countries continue to negotiate trade deals in the summer. Earlier this month, the U.S. reached a trade truce with China with Beijing agreeing to supply rare earths.
“We expect more trade deals to provide some additional clarity and eventually reduce corporate, consumer and investor anxiety,” Chris Haverland, global equity strategist at Wells Fargo Investment Institute., said in a note. “Deregulation, tax cuts and lower short-term borrowing rates should further bolster earnings.”
Also, corporate earnings have held up well despite policy uncertainty. For the second quarter, the S&P 500 earnings grew by 4.9%, marking the eighth consecutive quarter of year-over-year earnings growth for the index, according to FactSet.
Economy in good shape
Another reason for market resilience is the U.S. economy, which remains on solid footing. The unemployment rate remains low at 4.2% also the May nonfarm payrolls report showed only a slight softening in the labor market. The most recent inflation data also indicated that tariffs have done little to affect prices.

The Federal Reserve expects to make two rate reductions later this year, according to the closely watched “dot plot.” Fed Chair Jerome Powell reiterated that he expects policymakers to stay on hold until they have a better handle on the impact tariffs will have on prices.
“In our baseline scenario we believe a US recession will be avoided,” Dubravko Lakos-Bujas, chief global equity strategist at JPMorgan, said in a note to clients. “Recent weakness in some of the labour market indicators and limited pass-through from tariffs to inflation so far could prompt a Fed easing earlier than our December forecast.”
AI story intact
Meanwhile, the artificial intelligence story that has supported the market well over two years continues to be unfazed. The latest earnings season has restored investor confidence — Nvidia continued to grow at a rapid clip, while Big Tech’s spending on AI hasn’t slowed down. Investors were rattled at the beginning of the year as China’s DeepSeek startup raised the question whether the billions of dollars of investment was justified.

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Nvidia leading the rally

“The secular trend of AI remains robust, and recent adoption and monetization trends should underpin the next leg of the AI rally amid a supportive backdrop,” Ulrike Hoffmann-Burchardi, head CIO global equities at UBS, said in a note to clients.
JPMorgan estimated that AI could drive $1 trillion of spending by 2030, including investments in generative AI computing, networking and storage infrastructure.
Still, the next few weeks could bring more volatility to the market. Investors are bracing for a July 8 deadline for reciprocal tariff suspension, while more jobs data are on deck next week to gauge the health of the labor market.
“Markets often tend to see more volatility in the build up to conflicts and then rally or turn to other factors once it’s started,” said Carol Schleif, chief market strategist at BMO Private Wealth. More

Alibaba-affiliate Ant Group is doubling down on health care with a new app, based on artificial intelligence tech that it says could be rolled out overseas.
In a telling sign of global aspirations, the new health care app launched on Thursday has a straightforward English name — AQ — which the company says stands for “ask any question.”

Alibaba-affiliate Ant Group released a new AI-powered healthcare app on June 26, 2025.

BEIJING — Alibaba-affiliate Ant Group is doubling down on health care with a new smartphone app, based on artificial intelligence technology that the company says could be rolled out overseas.
It’s the latest sign of how China-developed AI is quickly building consumer applications. Ant, operator of the popular Alipay mobile payments app, has focused much of its AI development efforts on health care based on large language models from DeepSeek, Alibaba and Ant.

In a telling sign of global aspirations, the new health-care app launched on Thursday has a straightforward English name — AQ — which stands for “answer your question,” said Zhang Junjie, general manager of health-care business at Alipay.
Users can consult AI avatars of real-life medical specialists before getting priority access for a diagnostic appointment or hospital care if the situation is serious enough, he said. AQ can tap more than 5,000 hospitals and nearly 1 million doctors in China, according to Ant.
While Ant’s focus is on the mainland China market for now, the new app or its tech could be licensed out to a third party, Zhang said, without specifying a time frame. He said many foreigners in China have already used a pilot version of the app, and that Ant plans to release versions of the app in other languages.

Chinese companies from startups to more established companies such as Tencent and Ping An Insurance have long sought to capitalize on the integration of internet and software with health care. In the last several months, U.S.-based tech giants such as Microsoft and Amazon.com have also announced progress on AI-powered health-care tools.
In China, a large data pool and nationwide emphasis on digitalization have helped provide a foundation for AI-powered health-care functions, according to a report last month from the Cheung Kong Graduate School of Business. It pointed out that China’s national health insurance system covers more than 95% of the country’s 1.4 billion people, while about 70% of hospitals have digital record-keeping systems.

A proven user base

Alipay is one of the two major mobile payments apps in mainland China. In addition to payments, the app can be used to pay the water bill, hail a taxi or order groceries from Alibaba’s supermarket chain.
The payments app has also branched into health care over the last decade, with features such as allowing users to digitally make an appointment at one of China’s notoriously crowded public hospitals, instead of having to wait in line for a ticket.
Those Alipay health-care services have already reached nearly 800 million users in China, Zhang said.
The standalone AQ app incorporates those features, along with AI-powered functions such as doctor recommendations, medical report analysis and personalized medical advice.
Alipay has expanded to users outside China, as has its mobile payments rival WeChat.
— Correction: This story was updated to reflect the correct number of users in China that Alipay health-care services have reached. More

According to Tommy Norris—a tough oilman with a complicated love life, played by Billy Bob Thornton in “Landman”—the ideal price for a barrel of oil is $78. At that level, he explains, producers make a healthy profit and have spare money for exploration, while consumers are broadly comfortable. Today the price of Brent crude, the global benchmark, is $65. Not only is that too low for Mr Norris, it is also too volatile: in recent weeks prices have swung in response to missiles in the Middle East. More

Hedge funds will go to great lengths in pursuit of profits, whether it is by counting cars in satellite photos of parking lots or shipping gold across the Atlantic. Building a compiler—a piece of software that turns human-written code into programs a computer can execute—for your homegrown language? That still raises eyebrows. More

An investor’s desire to minimise his dues is nothing new. “The avoidance of taxes”, said John Maynard Keynes, “is the only intellectual pursuit that still carries any reward”. What is new is the scale and speed at which the desire is transforming financial intermediaries, wealth management and even the notion of passive investing. Once the preserve of the ultra-rich, the drive to minimise taxes has reshaped America’s financial system. More

Chinese Premier Li Qiang’s speech comes amid a pullback of U.S. support for Western-led institutions such as the World Bank and the IMF.
China launched a regional development program called the Belt and Road Initiative in 2013.
The AIIB provides loans to developing countries, largely for infrastructure projects such as water supply and transportation.

Chinese Premier Li Qiang spoke at the opening ceremony of the ASEAN-China-GCC Economic Forum in Kuala Lumpur, Malaysia, on May 27, 2025.
Sopa Images | Lightrocket | Getty Images

BEIJING — Chinese Premier Li Qiang on Thursday urged the Asian Infrastructure Investment Bank to increase its support for Beijing’s Belt and Road Initiative.
His speech at the opening ceremony of the bank’s 10th annual meeting comes amid a pullback of U.S. support for Western-led institutions such as the World Bank and the International Monetary Fund, which U.S. President Donald Trump claims unfairly benefit other nations.

“I hope that the AIIB will stay committed to open regionalism and persevere in promoting connection and communication among Asian countries and countries across the world,” Li said in Mandarin through an official English translation.
“It is important to strengthen the synergy between the bank and the Belt and Road Initiative and Global Development Initiative,” Li said, referring to two Beijing-led programs.
Premier Li’s “comments signal China’s ongoing attempts to capitalize on the chaos caused by Trump’s trade and economic policies,” said Stephen Olson, a visiting senior fellow at the Institute of Southeast Asian Studies and a former U.S. trade negotiator.
“China is also very aware that the U.S. is trying to pressure countries to tilt away from China (as we saw in the U.K. trade deal) and this is part of its strategy to counteract those efforts,” Olson said in an email.
When asked by CNBC about Li’s comments, outgoing-AIIB President Jin Liqun said at a press conference that China would like to improve the quality of the Belt and Road projects, and that the Chinese government has been “impressed” by the “high quality” of the AIIB’s work.

Jin said the AIIB assesses projects proposed by its 110 members. China has the largest stake in the multilateral bank, with a 26.5% voting share.
While the U.S. isn’t a member of AIIB, the U.K., France, Germany are listed among the 110 members of the China-led bank, as are Russia, Israel, Singapore and Vietnam.
Responding to a question about the bank’s work in the Middle East, Jin said the bank would be “very, very happy” to contribute to a needed restructuring of economies in the region, as well as improved education for young people. He did not directly address the Israel-Iran conflict.
Under Chinese President Xi Jinping, now in his third term, China launched a regional development program called the Belt and Road Initiative in 2013.
The program is widely viewed as Beijing’s effort to boost its global influence through the development of rail, sea and other transportation routes connecting Asia to Europe and Africa. Critics argue that China’s massive infrastructure project has forced developing nations to take on high debt while benefiting Chinese companies, often state-owned entities.
Xi subsequently announced a broader “Global Development Initiative” in 2021 to promote Beijing-led efforts around poverty alleviation, public health and food security, aligned with the UN’s 2030 Sustainable Development Goals.
The AIIB this week announced that Zou Jiayi, a former Chinese vice finance minister, will become its next president starting in January. Zou also previously represented China as an alternate governor at the World Bank. The former anti-corruption official is also a member of the ruling Chinese Communist Party’s Central Committee, the third-highest circle of power in the country.

AIIB’s current president, Jin Liqun, has served two five-year terms since the bank’s founding and is also a former Chinese vice finance minister.
Indonesia, a founding member of AIIB, has worked with the bank on 14 projects totaling over $5.1 billion, the country’s finance minister, Sri Mulyani Indrawati, said in a closing speech at the same event on Thursday.
“Indonesia is not only generating operating revenue for AIIB, but we [are] also providing enormous experience as well as strong participation,” Indrawati said.
“AIIB is no longer just an emerging bank. It is now a global force for development.”
The AIIB provides loans to developing countries, largely for infrastructure projects such as water supply and transportation. The Beijing-headquartered AIIB said it approved $8.4 billion in financing last year, bringing the total to over $60 billion since its launch in 2016.

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On Wednesday, Li urged global business leaders and senior government representatives to collaborate and avoid turning trade into a political or security issue. Engaging in the international economy is a way of “reshaping the rules and order,” he said, via an official English translation.
He was speaking at the World Economic Forum’s annual China conference, dubbed “Summer Davos,” held this year in Tianjin. Li subsequently met with business executives, including JD.com Founder and Chairman Richard Liu.
China’s Minister of Commerce Wang Wentao and Zheng Shanjie, head of the country’s economic planning agency, the National Development and Reform Commission, attended Li’s speech and meeting with businesses on Wednesday, according to state media. More

New York mayoral candidate, State Rep. Zohran Mamdani (D-NY) speaks to supporters during an election night gathering at The Greats of Craft LIC on June 24, 2025 in the Long Island City neighborhood of the Queens borough in New York City.
Michael M. Santiago | Getty Images

To say Wall Street isn’t a fan of Zohran Mamdani would be an understatement.
In fact, high-profile investors and business leaders in the Big Apple are up in arms about the stunning win by the democratic socialist in the primary to win the Democratic nomination to serve as the next New York City mayor. The three-term Assemblymember’s potential victory in the November general election could bring what the Street hates most — tax hikes and tighter regulation threatening corporate and investment interests.

Philippe Laffont, founder of hedge fund Coatue Management, told CNBC that a Mamdani win could trigger another exodus of wealthy investors. Since the pandemic, a wave of wealthy residents and institutional firms have fled the nation’s largest city for low-tax states such as Florida and Texas.
“Some people are going to, for sure, go,” Laffont said on CNBC’s “Squawk Box” Wednesday after former New York Governor Andrew Cuomo conceded the Democratic nomination. “It’s not quite done yet. There’s still an election. Maybe Cuomo will re-enter as an independent.”
Mamdani’s emphasis on socialism and redistribution of wealth runs counter to Wall Street’s preference for unbridled capitalism and policies that support growth, such as deregulation and low taxes. The 33-year-old has supported taxing the ultra-wealthy, financial transactions and passive income like dividends. He has also endorsed a state-level wealth tax and increased marginal income tax rates on high earners.
Hedge fund magnate Bill Ackman said he woke up Wednesday “a bit depressed” by Mamdani’s victory. The Pershing Square chief said he’s now looking at the logistics for another candidate, not himself, to run.
Lawrence Summers, the former Treasury Secretary and president of Harvard University, also expressed his distaste Mamdani’s nomination.

“I am profoundly alarmed about the future of the [Democratic National Committee] and the country, by yesterday’s NYC anointment of a candidate who failed to disavow a ‘globalize the intifada’ slogan and advocated Trotskyite economic policies,” Summers said in a post on X.
‘Suicide by Mayor’
Part of the stock market has already felt the pain from the prospect of a Mamdani-led NYC. Shares of New York regional bank Flagstar, with exposure to the New York real estate market, sank nearly 4% Wednesday. Office-focused real estate stocks also suffered, with SL Green Realty down more than 6% and Vornado Realty Trust down nearly 7%.
Mamdani advocates for universal rent control, and the New York City mayor has the power to appoint representatives to the regulatory board that oversees rent-controlled and rent-stabilized apartments. A pause on rent increases would hurt the profits of multi-family rental properties.
Roughly one million New York City apartments are rent stabilized but only about 20,000 are still rent controlled.
“It appears that NYC is electing to commit suicide by Mayor,” Jim Bianco, president and macro strategist at Bianco Research, said in a post on X Tuesday evening.
‘Terror is the feeling’
Mamdani’s solution to most problems relies on an ideological commitment to taxpayer-funded spending, and that leaves the business community concerned, said Kathryn Wylde, president of the Partnership for New York City, a nonprofit group of CEOs founded by David Rockefeller in 1979.
“Terror is the feeling,” Wylde said on CNBC Tuesday morning as voters headed to the polls, although she noted that “there’s much positive in New York. But that could quickly shift if we lose confidence in the mayor.”
Wylde said the state government, led by Gov. Kathy Hochul, should keep the city out of a “disaster” scenario. She acknowledged concerns about the high cost of living and doing business, but said that raising taxes isn’t the solution.
Some of former Governor Cuomo’s strongest support came from the Upper East Side of Manhattan, the home to many of New York City’s highest earners and business titans. The former Secretary of the Department of Housing and Urban Development in the Clinton administration received more than seven out of every 10 first-choice votes in several of the precincts in this neighborhood, according to Associated Press data as of Wednesday.
In 2013, Bill de Blasio’s win also triggered anxiety among the financial elite, but he was able to ease fears by meeting business leaders directly before implementing sweeping reforms.
“We had Mayor DeBlasio for eight years. New York is really strong. I’m hopeful the same will happen,” Laffont said. More

The Federal Reserve proposed easing a key capital rule for banks, and central bank officials opened the matter for public comment Wednesday.
The enhanced supplementary leverage ratio regulates the quality and quantity of capital banks should keep on their balance sheets.
In recent years as bank reserves have grown, Wall Street executives and Fed officials have sought to roll back the requirements.

Chairman of the US Federal Reserve Jerome Powell speaks alongside Michelle Bowman (L), Board Vice Chair for Supervision, Lisa Cook (2nd R), Board Governor, and Adriana Kugler (R), Board Governor, as he chairs a Federal Reserve Board open meeting discussing proposed revisions to the board’s supplementary leverage ratio standards at the Federal Reserve Board building in Washington, DC, on June 25, 2025.
Saul Loeb | Afp | Getty Images

The Federal Reserve on Wednesday proposed easing a key capital rule that banks say has limited their ability to operate, drawing dissent from at least two officials who say the move could undermine important safeguards.
Known as the enhanced supplementary leverage ratio, the measure regulates the quantity and quality of capital banks should be keeping on their balance sheets. The rule emanated from a post-financial crisis effort to ensure the stability of the nation’s largest banks.

However, in recent years as bank reserves have built and concerns have grown over Treasury market liquidity, Wall Street executives and Fed officials have pushed to roll back the requirements. The regulations targeted treat all capital the same.
“This stark increase in the amount of relatively safe and low-risk assets on bank balance sheets over the past decade or so has resulted in the leverage ratio becoming more binding,” Fed Chair Jerome Powell said in a statement. “Based on this experience, it is prudent for us to reconsider our original approach.”
The Fed board put the proposal open for a 60-day public comment window.
In its draft form, the measure would call for reducing the top-tier capital big banks must hold by 1.4%, or some $13 billion, for holding companies. Subsidiaries would see a larger drop, of $210 billion, which would still be held by the parent bank. The standard applies the same rules to so-called globally systemic important banks as well as their subsidiaries.
The rule would lower capital requirements to range of 3.5% to 4.5% from the current 5%, with subsidiaries put in the same range from a previous level of 6%.

Current Vice Chair for Supervision Michelle Bowman and Governor Christopher Waller released statements supporting the changes.
“The proposal will help to build resilience in U.S. Treasury markets, reducing the likelihood of market dysfunction and the need for the Federal Reserve to intervene in a future stress event,” Bowman stated. “We should be proactive in addressing the unintended consequences of bank regulation, including the bindingness of the eSLR, while ensuring the framework continues to promote safety, soundness, and financial stability.”
On the whole, the plan seeks to loosen up banks to take on more lower-risk inventory such as Treasurys, which are now treated essentially the same as high-yield bonds for capital purposes. Fed regulators essentially are looking for the capital requirements to serve as a safety net rather than a bind on activity.
However, Governors Adriana Kugler and Michael Barr, the former vice chair of supervision, said they would oppose the move.
“Even if some further Treasury market intermediation were to occur in normal times, this proposal is unlikely to help in times of stress,” Barr said in a separate statement. “In short, firms will likely use the proposal to distribute capital to shareholders and engage in the highest return activities available to them, rather than to meaningfully increase Treasury intermediation.”
The leverage ratio has come under criticism for essentially penalizing banks for holding Treasurys. Official documents released Wednesday say the new regulations align with so-called Basel standards, which set standards for banks globally.

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