2025 Market Driven by AI, Politics, and Policy Shifts

Key Quotes

"Back in January, Deepfakes, funded by Chinese hedge fund High Flyer, detailed in a paper how large language models can be built on bootstrap budgets and improved without human supervision. So did companies really need to break the bank on Nvidia chips and GPUs or data centers for that matter? The answer to that thought was short-lived and nothing changed. But it was something that nobody was pricing in, nobody was anticipating, and the entire market had to reprice for a little while."

The author highlights how an early January story on Deepfakes, detailing the construction of large language models on limited budgets without human supervision, challenged market assumptions. This event forced investors to re-evaluate their valuations of AI-related hardware and infrastructure, demonstrating how unexpected technological advancements can rapidly impact market pricing.

"The Trump administration tells US agencies to prepare for large-scale layoffs. And looking at that from an investor's perspective, it does change the way you look at the economic and macro picture because more people laid off, that's going to boost, um, the unemployment numbers and also kind of reining in spending. People have to take that into account, um, when they're making investment decisions and and certainly what the rates picture is going to be."

The presenter explains that a February headline about potential large-scale government layoffs altered the investor's macroeconomic outlook. This news indicated a potential rise in unemployment and a decrease in consumer spending, factors that investors must consider when making investment decisions and assessing future interest rate movements.

"In the end, we've got basically a market that was selling off because it just felt like suddenly, as some argued, this was a tax on American consumers. Some argued it's a tax on the companies. Some said that even if the other countries eat the tariffs, then it's going to reduce trade and demand for goods abroad. That article with the simple headline, Trump announces tariffs, garnered more than a thousand comments."

The author notes that an April article detailing tariff announcements led to market sell-offs due to varied interpretations of its economic impact. The presenter points out that discussions ranged from tariffs acting as a tax on consumers and companies to concerns about reduced global trade and demand, as evidenced by the article's significant comment volume.

"In July, the Trump administration changed the government's position on renewables and also loosened regulations for nuclear power plants to be built. Suddenly, these companies are going to be able to operate in a much easier regulatory environment and build more reactors. That's going to make more money for them and it's going to help the shareholders."

The presenter explains that a July shift in government policy, which favored nuclear power by loosening regulations for plant construction, created a more favorable operating environment for related companies. This regulatory easing was expected to increase profitability for these firms and, consequently, benefit their shareholders.

"In November, Michael Bury shut down his hedge fund. And in December, President Trump signed an executive order rescheduling marijuana. People were buying up these stocks, um, and of course, cannabis stocks started selling off on the news. And then you had this kind of sell the news reaction. There was a little hope that he might go even further and actually legalize cannabis in the United States."

The author describes how two distinct events in late 2025, Michael Burry's hedge fund closure and President Trump's executive order on marijuana rescheduling, impacted specific market segments. The presenter highlights the immediate sell-off in cannabis stocks following the rescheduling announcement, a common "sell the news" reaction despite some investor hopes for broader legalization.