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Investors worry about broader Middle East conflict

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Wall Street’s top financiers struck a pessimistic tone about the global economy at a flagship gathering in Saudi Arabia aimed at deal brokering, as a violent conflict between Israel and Hamas that has killed thousands of people unfolds.

The annual event is typically used by attendees to build relationships with some of Saudi Arabia’s biggest companies and its $778-billion sovereign wealth fund, drawn by the promise of deals as the kingdom seeks to wean its economy off oil.

Broader conflict

But an escalation between Islamist group Hamas and Israel into a broader conflict overshadowed the event dubbed “Davos in the Desert”, a nod to the annual gathering of world leaders and corporate bosses in the Swiss Alps.

JPMorgan Chase Chief Executive Jamie Dimon encouraged Saudi Arabia not to abandon a United States-led initiative for the kingdom to establish official relations with Israel.

“Despite what happened in Israel, I urge you all to keep up that effort,” Dimon told the Future Investment Initiative (FII) in Riyadh. “It is the only way to get there with some leadership from Saudi Arabia, for the folks of the Middle East.”

Ties on ice

Saudi Arabia is putting U.S.-backed plans to normalise ties with Israel on ice, two sources familiar with Riyadh’s thinking said, signalling a rapid rethinking of its foreign policy.

Geopolitical tensions heightened by the Middle East conflict pose the biggest threat to the world economy, World Bank President Ajay Banga said.

“There is so much going on in the world and geopolitics in the wars that you’re seeing and what just happened recently in Israel and Gaza. At the end of the day, when you put all this together, I think the impact on economic development is even more serious,” Banga said.

Although the globe’s top financiers dwelt little on the conflict, speaking instead about topics such as artificial intelligence, the economic fallout of war combined with record debts created a bleak backdrop.

“There’s no question if these things are not resolved, it probably means more global terrorism, which means more insecurity, which means society is going to be fearful … and … we see contractions in our economies,” BlackRock Chairman and CEO Laurence Fink said.

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Global markets outperform US stocks by largest margin as AI tech rallies in 2025

Global markets outperform US stocks in 2025, marking widest gap since 2009 as international gains surge

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Global markets outperform US stocks in 2025, marking the widest gap since 2009 as international gains surge

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In Short:
– Global markets outperformed U.S. stocks in 2025, with international equities showing significant gains.
– Helen Jewell highlighted that international performance was key, aided by the U.S. dollar’s decline.

In 2025, U.S. investors watching AI stocks closely may have missed the bigger picture: international markets delivered their strongest performance against U.S. equities in over three decades. While the S&P 500 rose just 15%, foreign markets outperformed by more than 10 percentage points, led by South Korea, Peru, and other European nations.

Helen Jewell, BlackRock’s CIO, highlighted that the dollar’s 13% decline earlier in the year further amplified returns for Americans holding foreign assets. This marked the widest performance gap since 2009 and reminded investors of the value of diversification beyond domestic tech giants.

Continued Tech Rally

Nvidia, Tesla, and Palantir Technologies emerged as the most-viewed ticker pages on Yahoo Finance in 2025. Nvidia alone attracted 250 million page views, while Palantir soared an eye-popping 140% for the year. Despite this hype, the S&P 500 lagged behind global peers, showing that concentrated U.S. tech gains can mask broader market opportunities.

U.S. stocks saw a boost after Micron Technology exceeded earnings expectations, jumping 10% on strong AI-related demand. The Technology Select Sector SPDR Fund also gained 1.5%, driven by semiconductor optimism. However, analysts warn investors to avoid over-concentration in U.S. tech, even if AI-driven rallies persist into 2026.

As portfolios prepare for next year, the key question is whether semiconductor demand will expand beyond AI applications. Diversification remains essential, balancing excitement over tech gains with the risks of narrow market exposure.

 


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Australia’s sharemarket set for weakest annual return in three years

Australia’s sharemarket set for weakest return in three years; gains from gold and critical minerals offset blue-chip losses.

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Australia’s sharemarket set for weakest return in three years; gains from gold and critical minerals offset blue-chip losses.


Australia’s sharemarket is on track for its weakest annual return in three years, with the S&P/ASX 200 Index expected to finish 2025 up around 6 per cent. Investors are feeling the impact of major losses from blue-chip companies, including Commonwealth Bank and CSL, which have dragged overall performance.

Despite the slow year, certain sectors provided a boost. Gains were largely driven by surging gold prices and rising interest in critical minerals, helping offset some of the losses from larger companies.

Smaller companies in the resources sector outperformed their larger counterparts, highlighting a shift in investor focus towards niche opportunities and high-demand commodities.

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#AustraliaShares #ASX200 #StockMarket2025 #InvestingAustralia #GoldSurge #ResourcesBoom #MarketUpdate #FinanceNews


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US stocks surge amid AI hype despite market volatility

US stock market bounced back, S&P 500 up 16% in 2023, driven by AI excitement amid policy uncertainties.

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US stock market bounced back, S&P 500 up 16% in 2023, driven by AI excitement amid policy uncertainties.


The US stock market has experienced a rollercoaster year, with the S&P 500 nearly entering a bear market in April due to tariff concerns. Investor sentiment shifted following policy changes from President Trump, setting the stage for a dramatic rebound.

By June, the S&P 500 was hitting new records, fueled by excitement over artificial intelligence and its impact on the tech sector. Corporate profit forecasts improved, contributing to an overall annual gain of 16%, despite ongoing market fluctuations.

Yet, the S&P 500 still trails international markets, reflecting lingering policy uncertainties in the US.

Investors are watching closely to see how domestic and global factors will shape the next year.

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#USStocks #SP500 #StockMarket #Investing #AIStock #MarketVolatility #CorporateProfits #GlobalMarkets


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