Market Update
Markets experienced significant turbulence as President Trump confirmed the implementation of long-anticipated 25% tariffs on Mexico and Canada. All three major indexes declined, with the S&P 500 recording its worst performance of 2025 so far.
European Defense Stocks Rally Amid Ukraine Uncertainty
Security Concerns Drive Investment Surge
European defense stocks posted remarkable gains following Ukrainian President Zelensky’s contentious Oval Office meeting. Reports suggesting potential suspension of U.S. military aid to Ukraine have reinforced the notion that European nations must increase their defense spending and potentially support Ukraine independently.
The shift in sentiment has propelled European markets ahead of U.S. counterparts:
- The UK’s BAE Systems jumped nearly 19%
- France’s Thales surged 23%
- Germany’s Rheinmetall rose 14%
- Italy’s Leonardo climbed 16%
The European Stoxx Aerospace and Defense index advanced almost 8%, bringing its year-to-date gains to 30%.
Long-Term Defense Spending Outlook
Analysts project sustained defense investment even if hostilities between Russia and Ukraine cease. According to Morningstar Defense Analyst Loredana Muharremi, European military spending could reach 3.5% of GDP by 2032, up from NATO’s current 2% target. Meanwhile, AlphaValue estimates an annual increase of $156 billion in European defense expenditures.
European Union leaders will meet in Brussels this Thursday to discuss collective defense funding strategies.
Major Headlines Across Industries
Government Efficiency Initiative Revises Claims
The Department of Government Efficiency (DOGE) has significantly modified its reported taxpayer savings, removing or altering approximately 40% of the contracts listed on its website. The initiative’s claimed savings have been reduced from $16 billion to less than $9 billion, with new disclaimers attributing responsibility for these figures to federal agencies.
Anthropic Achieves $61.5 Billion Valuation
The company behind AI assistant Claude secured $3.5 billion in funding from investors including Salesforce, Cisco, Jane Street, and Fidelity. The capital will support computational capacity expansion and growth in Asian and European markets. The announcement confirmed that Amazon’s Alexa+ personal assistant is powered by Claude technology, with Amazon’s stake in Anthropic valued at approximately $8 billion.
SEC Drops Kraken Lawsuit
Cryptocurrency exchange Kraken announced that the Securities and Exchange Commission has agreed to dismiss its lawsuit “with prejudice, with no admission of wrongdoing, no penalties paid and no changes to our business.” This development follows similar actions against other crypto companies in recent weeks, including Binance, Coinbase, and Robinhood.
TSMC Expands U.S. Semiconductor Investment
$100 Billion Commitment to American Manufacturing
Following discussions with Taiwan Semiconductor Manufacturing Company CEO CC Wei, President Trump announced the company’s plans to invest $100 billion in U.S. operations over the next four years. This expansion builds upon TSMC’s existing $65 billion investment in Phoenix manufacturing facilities.
A key development is TSMC’s agreement to bring its most advanced technology to the U.S., addressing previous concerns about technology transfer limitations. The commitment alleviates both American worries about domestic chip manufacturing capacity and Taiwanese concerns about potential tariffs.
TSMC joins other technology leaders including OpenAI, Oracle, SoftBank, and Apple in expanding U.S. investments.
Market Competition Highlights
Domino’s Introduces Stuffed Crust Pizza
The world’s largest pizza chain has launched stuffed crust pizza in the United States, targeting younger consumers who previously patronized competitors for this specialty product. Domino’s research indicates that rivals like Pizza Hut, Little Caesars, and Papa John’s collectively sell stuffed crust to nearly 13 million potential Domino’s customers annually.
This strategic move could help bolster Domino’s modest 0.4% sales growth, as stuffed crust customers typically purchase more frequently and spend more per order.
Canadian Consumers Reduce U.S. Purchases
A recent public opinion survey revealed that approximately 66% of Canadian respondents are reducing purchases of U.S.-made products, with 55% specifically decreasing Amazon orders following escalating trade tensions. Canadian consumers are increasingly seeking domestic alternatives and canceling U.S. travel plans.
This shift reflects both growing Canadian nationalism and economic practicality, as tariff-related currency fluctuations have made American goods more expensive for Canadian consumers.
