OECD growth forecasts for the global economy and the U.S. have been cut due to trade barriers, tighter financial conditions, and weakened confidence. U.S. growth is projected to slow sharply, dropping from 2.8% in 2024 to 1.6% in 2025 and 1.5% in 2026.
Access to rare earths is playing an outsized role in resurgent U.S.-China trade tensions. Following last month's détente in Geneva, it was apparently agreed that both sides would roll back retaliatory tariffs imposed since April 2, but there has been disagreement over export controls and sector-specific levies. China appears to be keeping in place a strict approvals process on rare earths that are used in everything from commercial vehicles to military equipment, while the U.S. has increased tariffs on steel and aluminum to 50%.
Where are investors looking? Europe. Apollo Global Management became the latest US investor to outline ambitious investment plans for Europe. It plans to invest $100bn in Germany. Investment groups such as Blackstone and New York-based Neuberger Berman have also cited the region’s relative stability, while Canada’s second-largest pension fund has said it would cut US exposure and increase investment in the UK, France, and Germany.
The European Central Bank cut its key interest rate to the lowest level since early 2023, a response to slowing inflation and threats to the region’s growth from President Trump’s trade war. The ECB on Thursday cut its deposit rate to 2% from 2.25%, its eighth reduction in a year. The move deepens a divergence with the U.S., with benchmark borrowing costs now more than 2 percentage points lower in Europe. That gap has become ammunition for Trump’s criticism of the Federal Reserve, which hasn’t cut rates this year.
Annual inflation in the euro zone fell to 1.9% in May, down from 2.2% in April. That is the first time it has fallen below the European Central Bank’s 2% target since September 2024. Inflation had been above 2% for more than three years.
The price of shares in American nuclear-power firms briefly leapt by as much as 9% after Meta signed a deal with Constellation Energy. The tech giant will purchase electricity from one of Constellation’s nuclear plants for 20 years. Constellation said the deal was worth “billions of dollars”. Tech companies are interested in nuclear plants to power the energy-hungry data centres needed for training artificial-intelligence systems
Wise, the foreign exchange fintech, has become the latest company to switch its primary stock market listing from London to New York. The company was founded by Estonians Kristo Käärmann and Taavet Hinrikus in London in 2010 and launched on the London stock market with great fanfare in 2021, with a valuation of close to £9bn.
Around the world, gamers queued outside shops to get their hands on Nintendo’s latest console. Retailing for $450 in America, the Switch 2 is 50% pricier than its predecessor, which came out in 2017. Nintendo predicts it will sell 15m of the devices by March.
