Another volatile week in global markets has been jolted by a dramatic policy shift from President Donald Trump, who has moved to repeal the long-standing scientific finding that greenhouse gas emissions endanger human health.
The decision removes the legal foundation for federal climate regulation in the US and effectively halts CO₂ limits for new vehicles. For carmakers that have poured billions into electric vehicle production, it is an abrupt change of direction. Investment plans carefully calibrated around net-zero targets are now clouded by political uncertainty.
The move lands at a moment when markets are already grappling with another source of upheaval: artificial intelligence.
London’s FTSE 100 is set for a tentative open as investors await a fresh US inflation reading. Headline CPI is expected to edge up to 2.5% year on year. A stronger-than-expected US jobs report has already pushed expectations for a Federal Reserve rate cut back towards the summer.
Yet AI’s longer-term deflationary potential looms in the background. If automation delivers the sweeping efficiencies promised, it could ultimately weigh on prices – and employment.
The mood has shifted from euphoria to unease. For months, tech stocks surged on the assumption that AI would supercharge productivity and profits. Now investors are confronting the dislocation that may come first. Fears that AI could replace large swathes of the workforce are beginning to ripple beyond Silicon Valley.
Real estate companies have been among the hardest hit, as markets reassess demand for office space in a world where fewer workers may be needed – or fewer required on site. The reassessment has been swift and unforgiving.
Even within the technology sector, confidence is wobbling. Shares in Cisco tumbled 12% after it warned of a more uncertain outlook, highlighting concerns about whether infrastructure providers can meet surging demand for memory and data capacity while sustaining margins.
The cross-sector sell-off forced investors to liquidate positions in traditional havens to cover losses. Gold and silver, typically beneficiaries of market stress, fell sharply before staging a tentative recovery.
Meanwhile, the speculative corners of the market are back under pressure. Bitcoin has slid to around $66,000 – roughly 46% below its peak last summer. Previous downturns have seen declines of as much as 75%, a reminder that digital assets remain prone to dramatic swings at precisely the moments when stability is most prized.
The common thread is disruption. Climate policy has been upended. AI’s promise is colliding with economic reality. Monetary policy remains finely balanced.
In such conditions, trust – in brands, in business models, in regulation – becomes more valuable. Companies that adapt quickly to technological change may yet prosper. Those that hesitate risk being overtaken not gradually, but abruptly.
