Business & Markets Update

Woah: That was some month to kick off 2025… felt more like a quarter. Story of last week, if we had to choose one? Has to be AI. A week ago today, the market sold off pretty aggressively on fears around a Chinese AI app called DeepSeek, which performs foundational AI models similar to OpenAI in the US, for a fraction of the cost. Nvidia (basically the proxy for all things AI in the US stock market) was down close to 17%, or $465 BILLION of its market capitalization, on Monday…the largest such wipe out in market history.

The broader market hung in nicely, with rotations into other parts of the tech sector, along with more defensive-oriented sectors (think consumer staples, healthcare, real estate etc). Trump 2.0 headlines are hot & heavy, as expected. The ramp in tariff threats all week concluded with late Friday afternoon headlines pointing to tariffs for Canada, Mexico, and China set to take effect on Feb 1st. Big tech earnings were another relevant highlight last week, as we heard from Apple (solid beat) / Microsoft (weaker than expected revenue, but strong AI takeaways) / Meta (results better across the board) / and Tesla (weaker margins than expected).

The Federal Reserve held their Jan meeting and ended with rates on hold, as expected. Chairman Jerome Powell offered some mixed takeaways but leaned mostly positive / accommodative. Markets are pricing in less than a 20% chance for a March cut, the first cut in June, and ~ 50bps of cuts by the end of ’25.

This week you should expect more of the same: All eyes on commentary coming out of another huge batch of earnings reports, along with daily (more like hourly?) headlines from Trump, with an emphasis of ongoing tug-of-war around tariffs.

Including a quick snapshot here for January (i.e. Year-To-Date ’25) performance, with indices listed in the following order: S&P 500 / Nasdaq 100 / Dow Jones Industrial / Magnificent 7 (big tech) / Russell 2k:

Notable Reads

Trump says Canada & Mexico to be hit with 25% tariffs on Feb 1 (Link)

AI euphoria saves big tech from so-so earnings (Link)

OpenAI now wants to make DeepSeek look like the villain (Link)

Howard Lutnick says it's 'nonsense' that tariffs cause inflation (Link)

Is Netflix morphing into Cable? (Link)

Starbucks changes free refill policy, brings back condiment bars (Link)

Worth Listening To From Last Week

Sahil Bloom on The Rich Roll Podcast: “The 5 Types of Wealth”

Listen to our friend and HPLT community member Sahil Bloom on his recent podcast with Rich Roll, 1 of many that are currently dropping in anticipation of his Book Launch this week.

Sahil & Rich chop it up in a VERY COOL CONVERSATION, discussing Sahil’s framework for redefining success, and dropping insight after insight on optimizing life through intentional decision-making and a value-driven lifestyle. (Listen Here)

Make it a great week… Work Hard / Have Fun

From the Team @ HPLT 2/3