S&P 500, Nasdaq hit record highs at open as Meta, Microsoft results fan AI frenzy
The Dow Jones Industrial Average rose 204.5 points, or 0.46 per cent, at the open to 44,665.82. The S&P 500 rose 64.1 points, or 1.01 per cent, at the open to 6,427.02, while the Nasdaq Composite rose 327.8 points, or 1.55 per cent, to 21,457.48 at the opening bell.
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Foxconn agrees $375 million Lordstown plant sale to pivot towards data centres
TAIPEI :Taiwan's Foxconn said on Monday it had struck a deal to sell a former car factory at Lordstown, Ohio, for $375 million, including its machinery, but said it would continue to use the site to make a broader range of products aligned with its strategic priorities. Foxconn, which makes data center products for Nvidia and assembles iPhones for Apple, did not elaborate on products to be manufactured at the plant, but said the cloud and networking product business in particularly showed "significant growth". A source with direct knowledge of the matter said the Ohio site would support artificial intelligence data centers and that at more than 6 million square feet (557,000 sqm), it was six times larger than a plant Foxconn is building in Houston to manufacture Nvidia's GB300 AI servers. The source did not give more details. Foxconn purchased the plant, a former General Motors small-car factory named after the town in Ohio where it is located, in 2022 from now-bankrupt U.S. electric vehicle startup Lordstown Motors Corp for $230 million, as part of its efforts to expand into EVs. Foxconn also invested in Lordstown and the companies started making electric pickup trucks there. But the partnership later soured, with Lordstown going out of business and suing Foxconn. Foxconn said on Monday it sold the factory to an "existing business partner", without giving details. It also said the company remained committed to automotive customers in the U.S. and said it would be able to rapidly ramp up automotive production to meet customer demand when required. Foxconn has expanded beyond its traditional role as an iPhone assembler. Last week it formed a strategic partnership with industrial motor maker TECO Electric & Machinery to build data centres.
CNA
40 minutes ago
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Google agrees to curb power use for AI data centers to ease strain on US grid when demand surges
NEW YORK, August 4 :Google has signed agreements with two U.S. electric utilities to reduce its AI data center power consumption during times of surging demand on the grid, the company said on Monday, as energy-intensive AI use outpaces power supplies. Utilities in the country have been inundated with requests for electricity for Big Tech's AI data centers, with demand eclipsing total available power supplies in some areas. That power crunch has led to concerns about spiking bills for everyday homes and business and blackouts. It has also complicated the technology industry's expansion of AI, which requires massive amounts of electricity - fast. Google's agreements with Indiana Michigan Power and Tennessee Power Authority would involve scaling back power use at the technology giant's data centers when called upon by the electric utilities to free up space on the grid. They are the first formal agreements by Google in demand-response programs with utilities to temporarily curtail its machine learning workloads, a subset of artificial intelligence. "It allows large electricity loads like data centers to be interconnected more quickly, helps reduce the need to build new transmission and power plants, and helps grid operators more effectively and efficiently manage power grids," Google said in a blog post. Demand-response programs have typically been used by other energy-intensive industries like heavy manufacturing or cryptocurrency mining. In exchange, the businesses generally receive payments or reduced power bills. The programs involving AI activity in data centers is generally new, and details of the commercial arrangements between Google and the utilities were not clear. While demand-response agreements apply only to a small portion of demand on the grid, the arrangements might become more common as U.S. electricity supply tightens.
Business Times
2 hours ago
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Brexit's parallels with Trump tariffs tell a tale
In figuring out why the US tariff shock has not sent the economy or financial world into a tailspin, Britain's exit from the European Union trade bloc provides something of a playbook – and without a particularly happy ending. Aside from vast differences in economic scale and global reach, the two episodes bear some comparison in how they upended years of deeply integrated free trade and possibly in how business, the economy at large and financial markets reacted. The 2016 Brexit referendum and US President Donald Trump's tariffs this year were each widely billed as economic shocks that would send the financial world into paroxysms. They did not, at least not at the outset. To be sure, both were followed by dramatic downward lurches in the two countries' respective currencies. But to some extent, sterling's steep drop after the referendum vote and the US dollar's plunge on Trump's tariff plan this year helped offset some of the wider impact – at least on stock markets that are loaded with global firms with outsized foreign revenue. More broadly, however, the difficulty in isolating their immediate net impact means no 'big bang' economic crisis unfolds to prove critics right – even if their enduring legacy turns out to be a slow burn of economic potential and lost output, often obscured by multiple other crosswinds. Slow burn In Britain's case, the seismic effects of the Covid-19 pandemic distorted any attempt to easily assess Brexit when it actually happened. Tortuous negotiations with the EU meant the UK's departure eventually occurred on the eve of the health crisis in 2020, and the new trade rules did not come into force until a year later. BT in your inbox Start and end each day with the latest news stories and analyses delivered straight to your inbox. Sign Up Sign Up But in the four years between the referendum surprise and the pandemic, the UK economy never entered a recession nor recorded a negative quarterly gross domestic product print – confounding pro-EU supporters at the time and bolstering the Brexit lobby. Emerging from the twin hits, however, the economy has almost flatlined since. FTSE 100 stocks, helped by the weaker pound, kept pace with the S&P 500 and world indexes for about a year after the referendum before chronic underperformance set in. Since 2018, the UK market has lagged MSCI's all-country index by some 35 per cent. What is more, it has taken more than eight years for the pound's effective exchange rate to recover its pre-referendum levels. Few mainstream economists now doubt that Brexit has taken a serious toll on the UK economy – even if blame for that gets sprayed in multiple directions – and oceans of ink have been spilled trying to disentangle the precise impacts. One academic study by a number of Bank of England economists earlier this year concluded that uncertainty following the referendum resulted in little change in goods exports and imports before the exit was finalised. But after the new rules hit, UK imports fell 3 per cent and overall exports fell 6.4 per cent, largely because of the 13 per cent hit in exports to the EU. While this slump seems relatively modest compared to the official forecasts of the longer-term hit, the pain has been borne disproportionately by small businesses. Additionally, these findings exclude the Brexit hit to services and London's finance sector, which registered a much bigger economic dent. And the cumulative damage to London and the service sector over the next 10 years continues to worry the city. 'Lighting a fire' The US tariff story is of a completely different order, of course, as it will reverberate across the world economy. But there are some parallels, not least in certain aspects of the market reactions and the initial resilience. Economists estimate that the tariffs could lop anywhere from 0.5 per cent to 1 per cent off US GDP over time. That is a US$150 billion to US$300 billion hit which, though painful, would not be an instant crisis for an economy that is growing at a roughly 2 per cent annualised rate, where imported goods represent just 11 per cent of GDP, and where tech and artificial intelligence trends are generating considerable tailwinds. But as former White House economic adviser Jason Furman pointed out in a New York Times essay last week, the tariff damage is likely not a one-off hit. The loss of 0.5 per cent of GDP, he argued, is 'the equivalent of every household in America taking around US$1,000 and lighting it on fire – then doing it again every year. Forever.' In the end, the main point of the British comparison is to show how extreme partisan arguments on the pros or cons of such giant economic policy changes do not necessarily get resolved cleanly in adaptive, hardy and hyper-complex modern economies. The upshot is there is rarely a big crash to prove a point. And that in itself is unnerving if politically-motivated policies then appear workable on the surface and resist instant pushback – only to act as a drain on the economy over a protracted period. Many observers reasonably argue that sovereign democratic politics should always trump economic conventions and even directions. But do people eventually notice when it goes wrong? The latest YouGov opinion poll shows 56 per cent of Britons now think it was wrong to leave the EU – some nine years after their narrow vote to leave. The jury on Trump's tariffs is still out. REUTERS
