TheChek News Flow

Anysphere closes $900mn funding round from investors including Thrive Capital and Andreessen Horowitz

Anysphere, creator of the fast-growing programming tool Cursor, has closed a new round of funding that more than triples its valuation to about $9bn, as money continues to pour into Silicon Valley’s hottest artificial intelligence start-ups.

OpenAI backer Thrive Capital led a $900mn round for San Francisco-based Anysphere, according to people familiar with the deal. Andreessen Horowitz and Accel are among the other investors who participated.

Anysphere was founded in 2022 by a quartet of twenty-somethings who met studying maths and computer science at the Massachusetts Institute of Technology. It was previously valued at $2.5bn in January when it raised $105mn, also from Thrive and Andreessen Horowitz.

The huge jump in Anysphere’s price tag comes after annual recurring revenues grew quickly since its last funding round, rising to about $200mn in April to make it one of the fastest-growing software companies ever.

Nonetheless, the dramatic step up in valuation is likely to reignite concerns among some investors about the sustainability of AI company valuations, particularly given recent turmoil in public markets.

OpenAI was valued at $260bn in March, after SoftBank committed to lead a $40bn investment round into the company.

Two groups founded by former executives at OpenAI — Ilya Sutskever’s Safe Superintelligence and Mira Murati’s Thinking Machines Lab — have also targeted large fundraising rounds.

SSI recently secured a $30bn valuation while Murati’s company was in talks to raise $2bn at a $10bn valuation, according to people familiar with the matter. Neither has yet released a product.

Cursor has won millions of fans among computer programmers for its AI-powered software development toolkit, which its creators say writes almost 1bn lines of working code every day.

By using natural language to tell the AI what to make instead of writing code by hand and “autocompleting” updates, it accelerates productivity for programmers, one of the most in-demand skills in the tech industry. 

Despite competing with tools such as Microsoft’s GitHub Copilot, Cursor has customers at tech companies including Stripe, OpenAI and Spotify, according to its website, as well as prominent AI researchers such as Andrej Karpathy.

The former Tesla and OpenAI engineer coined the phrase “vibe coding” in February to describe an almost trance-like state of talking to Cursor’s AI to create software “where you fully give in to the vibes, embrace exponentials, and forget that the code even exists”.

Coding assistants have become a breakout hit among generative AI start-ups, driving huge productivity gains for tech companies.

Last month, Google chief executive Sundar Pichai said that “well over 30 per cent” of code submitted on its internal software development “involves people accepting AI-suggested solutions”.

Several AI coding start-ups have emerged since OpenAI launched ChatGPT in late 2022, including France’s Poolside and Silicon Valley-based Windsurf and Replit.

As the price tags for foundation model companies such as OpenAI and Anthropic have put them out of reach for all but the richest investors, venture capitalists have increasingly looked to AI application developers such as Anysphere, search app Perplexity and video generator Synthesia as a way into the AI boom.

AI app start-ups raised $8.2bn in 2024, more than twice as much as the previous year, according to data from Dealroom.co and Flashpoint. 

Many enterprise AI apps have quickly generated tens of millions of dollars in revenue but some investors are concerned that this reflects widespread AI experimentation among companies, rather than durable recurring sales. 

Anysphere, Thrive Capital, Andreessen Horowitz and Accel all declined to comment.

Work on a key experimental reactor is expected to be finished within two years, which could be a major advance in the race for clean energy

China is accelerating its efforts to build the world’s first nuclear fusion reactor capable of achieving net energy generation – a move that would be a historic step towards commercialising a clean, safe and near-limitless source of energy.

The Burning Plasma Experimental Superconducting Tokamak (Best), is now in its final assembly phase in Hefei and is expected to be completed in 2027, state news agency Xinhua reported.

However, SPARC, an experimental fusion facility under construction in Massachusetts, is working towards the same goal – that of producing more energy from fusion than it consumes – and is working to a similar timeline.

The assembly of Best involves tens of thousands of components with a total weight of around 6,000 tonnes.

“We have fully mastered the core technologies, both scientifically and technically,” said Song Yuntao, the project’s chief engineer from the Institute of Plasma Physics in Hefei, at a ceremony marking the start of the final stage of construction on Thursday.

Work began two months ahead of schedule, according to Xinhua. “In less than two years, we completed the civil construction, with components from various systems already reaching operational readiness – this is what we call ‘China speed’,” said Yan Jianwen, chairman of Neo Fusion, the state-backed company leading the project.

Best is a tokamak, a doughnut-shaped device widely seen as the most promising design for making nuclear fusion – a process that recreates the process by which the sun generates energy – a viable source of electricity.

Nuclear fusion power plants would also have the significant benefit of producing far less radioactive waste than contemporary power plants.

It builds on the legacy of the Experimental Advanced Superconducting Tokamak (East) China’s first-generation superconducting tokamak, which has shown that controlled fusion is scientifically feasible, but does not produce actual fusion energy.

By contrast, Best is designed to allow scientists to move from experiments to real energy-producing fusion reactions – a threshold known as net energy generation.

It will serve as an intermediate step in China’s fusion road map between East and the Chinese Fusion Engineering Demo Reactor (CFEDR), which will be the country’s next large-scale demonstration reactor for future fusion power plants.

The reactor is slightly larger than the US SPARC facility, which is being built by MIT spin-off Commonwealth Fusion Systems, but is using less powerful magnets than its American counterpart.

Best aims to briefly produce more than five times the energy it uses in short pulses and to break even during longer, steady operations.

SPARC is designed to at least double the energy it consumes – or most optimistically – up to 10 times more. This makes it one of the most ambitious compact fusion efforts to date. Construction on the facility began in late 2021 and is also targeting net energy gain by 2027.

Assembling the Best facility will need core components to be precisely installed in the main tokamak pit.

“Both installation precision and cumulative error must be controlled within the millimetre range, which presents a significant technical challenge,” Liang Zhuo, project manager for the core assembly, told local television. “The full assembly is scheduled for completion and delivery by November 2027.”

Once construction is complete, Neo Fusion plans to proceed with CFEDR, paving the way for the eventual commercialisation of fusion energy, according to Yan.

From Coca-Cola to Berkshire, here’s what worked and what didn’t for the head of Berkshire Hathaway

Warren Buffett will leave behind a peerless record as an investor and acquirer of businesses. And a few real flubs.

He built one of the world’s most valuable companies in Berkshire Hathaway BRK.B 1.80%increase; green up pointing triangle and a following that extended well beyond the shareholders who benefited from Berkshire’s successes. But as Buffett himself has reminded us, not every investment he made in his storied six decades at the helm worked out as well as his bet on Apple. And those mistakes, as Buffett has also said, often offer valuable lessons.

Here are some of Buffett’s greatest hits and misses:

When Buffett first invested in the soft-drink company in 1988, he told Berkshire shareholders he expected to own the stock for a long time. “When we own outstanding businesses with outstanding managements, our favorite holding period is forever,” he wrote in his annual letter to shareholders that year.

True to Buffett’s word, Coca-Cola remains a holding nearly 40 years later. By the end of 2024, the stake was valued at roughly $25 billion. Coke’s dividends, which have increased annually for decades, paid Berkshire some $770 million in 2024 alone.

Along the way, the stock came to represent something more to Berkshire and its shareholders than just a steady source of income. Buffett was Coke’s largest shareholder, a onetime board member and an unflinching pitchman. He often said he drank five Cherry Cokes a day, and his devotion to his favorite soda became part of the lore that drew thousands of fans to Omaha, Neb., for Berkshire’s annual shareholder meetings.

Berkshire’s investment in Coke, along with other corporate giants such as American Express and Apple, also revealed just how Buffett’s investment philosophy had evolved from his earlier days as a cheap-stock connoisseur. It was Charlie Munger, Buffett’s longtime business partner, who had urged him to look instead at higher-quality companies at fair prices.

Berkshire bought preferred shares in Salomon Brothers in 1987, when it was still one of the biggest firms on Wall Street. In 1991, though, scandal enveloped the investment bank when its traders were accused of rigging a Treasury-note auction. Buffett was forced to step in as chairman to clean up the mess, which ended when the firm settled a spate of government investigations. (Read The Wall Street Journal’s 1991 take here.)

Salomon never fully recovered, and in 1997 the firm sold itself to Travelers Group, the financial-services company that would become Citigroup. That deal helped salvage Berkshire’s investment, but the ordeal left its scars. In the decades that followed, Buffett and Munger, once a Salomon board member, would often cite the episode as both a cautionary tale and reason to be wary of Wall Street.

“I can handle bad news but I don’t like to deal with it after it has festered for a while,” Buffett wrote in his 2010 letter to Berkshire shareholders. “A reluctance to face up immediately to bad news is what turned a problem at Salomon from one that could have easily been disposed of into one that almost caused the demise of a firm with 8,000 employees.”

Buffett credited Munger for discovering BYD, then a little-known battery maker in China, and encouraging Berkshire to buy a 10% stake in the company in 2008. Within two years, the $230 million investment was valued at nearly $2 billion.

BYD’s shares continued to rise, bolstered by demand for electric vehicles, until 2022. That is when Berkshire began to trim its stake.

Berkshire paid $358 million for preferred shares in the U.S. airline in 1989. By the mid-1990s, Buffett had marked down the value of its investment by 75% and issued a mea culpa.

“When Richard Branson, the wealthy owner of Virgin Atlantic Airways, was asked how to become a millionaire, he had a quick answer: ‘There’s really nothing to it. Start as a billionaire and then buy an airline,’ ” Buffett wrote in his 1996 letter to shareholders. “Unwilling to accept Branson’s proposition on faith, your Chairman decided in 1989 to test it by investing $358 million in a 9.25% preferred stock of USAir.”

Buffett conceded he underestimated just how much havoc the deregulation of the U.S. airline industry would play on USAir’s business. From 1990 to 1994, USAir reported total losses of $2.4 billion. (USAir eventually became US Airways, which later merged with American Airlines.)

Buffett bought a 75% stake in this Des Moines utility in 1999 at the urging of Walter Scott, a lifelong friend who had joined the Berkshire board in the late 1980s.

MidAmerican, later renamed Berkshire Hathaway Energy, thrived under Berkshire by eschewing dividends and plowing the company’s profit back into the business through acquisitions and capital investments. BHE would become one of Berkshire’s four pillars, along with its insurance and railroad businesses and its stake in Apple. Annual operating earnings grew to nearly $4 billion from $122 million in 2000.

The deal also added Greg Abel to Berkshire Hathaway’s payroll. Buffett now intends to turn over his chief-executive post to Abel at year-end.

In May 1964, the top executive of a struggling textile manufacturer called Berkshire Hathaway wrote to its investors offering to buy their shares for $11.375 a piece. Buffett, a major shareholder, had expected $11.50. But when Berkshire’s Seabury Stanton responded with the lower offer, “I bristled at Stanton’s behavior and didn’t tender,” Buffett wrote in his 2014 letter.

“That was,” Buffett wrote, “a monumentally stupid decision.”

Berkshire continued to wilt along with the rest of the New England textile industry, shutting mills and racking up losses. But Buffett, piqued by Stanton’s actions, ignored the company’s grim outlook and instead kept buying more stock. By May 1965, he took over Berkshire for good. It is a move he still regrets. (Though it did earn him his first mention in The Wall Street Journal.)

“Through Seabury’s and my childish behavior—after all, what was an eighth of a point to either of us?—he lost his job, and I found myself with more than 25% of (Buffett Partnership’s) capital invested in a terrible business about which I knew very little,” Buffett wrote in the 2014 letter. “I became the dog who caught the car.”

Buffett kept the textile business going for years. “But stubbornness—stupidity?—has its limits,” he wrote. “In 1985, I finally threw in the towel and closed the operation.”

Financial pros say these stocks are somewhat insulated from tariff tumult and fallout from an economic slowdown—and they’re relatively cheap now

Key Points

Midcap dividend stocks, which have been out of favor in recent years, are back on the buy lists of many investment strategists.

These are U.S. companies with market capitalizations between $2 billion and $10 billion that return cash to investors via periodic—typically quarterly—payouts.

Why are they back in vogue, after years of lagging behind their larger brethren? For one thing, the midcap dividend stocks provide investors with income to offset share-price declines; the companies also tend to have strong free cash flows to weather economic downturns. In addition, they tend to derive a greater portion of revenue from the domestic market than large-cap companies so they may be better positioned amid disruptions in global trade.

The S&P MidCap 400 Dividend Aristocrats index, a group of 53 midcap stocks that have seen increased dividends for 15 consecutive years or more, is down 1.74% this year through April 30, compared with a decline of 4.92% for the S&P 500 and 9.48% for the Nasdaq composite. The companies in this midcap index derive 82% of their revenues from within the U.S., compared with about 60% for the S&P 500 and 53% for the Nasdaq composite, according to S&P Dow Jones Indices and FactSet data as of April 30.

“These stocks offer some downside protection during this period of market volatility,” says Simeon Hyman, global investment strategist for ProShares, adding that this is especially true for investors whose portfolios have become overly concentrated in megacap growth stocks such as the “Magnificent Seven” tech titans. “In this environment it is important to spread your equity exposure broadly to more asset classes to reduce risk.”

So what should investors look for when hunting for midcap dividend stocks?

Financial advisers recommend that investors first look at a stock’s dividend yield, which is calculated by dividing the annual dividend per share by the share price. The yield measures how much income investors receive for each dollar invested in the stock.

Still, a high yield can be a red flag, particularly when it is the result of a falling stock price. In such cases, investors should be aware of the possibility of dividend cuts—which often come during times of economic distress.

So advisers say it is important to dig deeper and look at a stock’s underlying fundamentals to determine the financial health of the company. “Make sure the company has a strong balance sheet and its prospects for earnings-per-share growth are strong, so the company is well-positioned to maintain dividend payments in the future even if there is a recession,” says Jason Alonzo, managing director at Harbor Capital Advisors.

To that end, he recommends looking at the dividend payout ratio—the percentage of a company’s net income that is paid to shareholders through dividends. A range of 25% to 50% is generally viewed by financial pros as healthy, indicating the company has money left over to reinvest for growth.

Other metrics investment pros use to evaluate these stocks are: free cash flow, which is money available to investors after a company has paid for its operating expenses and capital expenditures; free cash flow payout ratio, or the percentage of free cash flow paid to investors in the form of dividends (with a lower ratio suggesting the company generates enough cash flow to cover continued dividends); and the interest coverage ratio, which indicates the company’s ability to pay interest expenses due on its debt outstanding from operating income or earnings, with a higher ratio more favorable. That’s important since investors want to be sure a company has the financial wherewithal to manage debt and pay dividends.

The most telling metric now may be price-to-earnings ratio, a common measure used to judge whether a stock is overvalued or undervalued. While the P/E ratio of the S&P 500 and Nasdaq composite are about 28 and 32.6, respectively, the P/E ratio of the S&P MidCap 400 Dividend Aristocrat Index is 17.87 as of April 30.

“Now is the time for bargain-hunting since midcap dividend stocks are trading at historically low valuations relative to large-cap stocks,” says Larry Adam, chief investment officer at Raymond James. “They could be the sweet spot for investors when you consider they are more insulated from tariff exposure and are expected to outpace the earnings growth of large-caps this year.”

While you can buy individual midcap dividend stocks, another option is to invest through exchange-traded funds. These funds are tax-efficient and provide diversification across a basket of stocks in different industries. Many have low expense ratios.

The $3.47 billion WisdomTree U.S. MidCap Dividend ETF (DON) has a total return of negative 6.47% for the year through April 30, a 12-month return of 4.72% and a 12-month yield of 2.54%. Its expense ratio is 0.38%. ProShares S&P MidCap 400 Dividend Aristocrats ETF (REGL) is a $1.69 billion fund that has a total return of negative 1.88% year to date and one-year return of 6.96%, and a 12-month yield of 2.60%. It has an expense ratio of 0.40%, Morningstar Direct reports.

While these funds are both down for the year, their dividends help mitigate the overall impact. Also, financial advisers suggest reinvesting dividends rather than taking the cash unless an investor needs it—a strategy that could pay off in the long term by adding shares at depressed prices.

“By reinvesting dividends within these midcaps, investors could benefit from both price appreciation and the power of compounding,” says Gabriel Shahin, president and chief executive of Falcon Wealth Planning. “That combination can offer excellent long-term diversification and a solid growth trajectory.”

But high-quality midcap dividend stocks should be just 10% to 15% of a portfolio, financial advisers say. They are long-term value investments with a two- to five-year time horizon or longer, they say. How much an investor allocates depends on risk tolerance, age, income and financial goals.

Cash-strapped Maldives to build $9bn blockchain hub in bid to lure investors

Dubai-based family office plans financial zone for the Indian Ocean archipelago

A Dubai-based family office has announced plans to invest $8.8bn to build a “blockchain and digital assets” financial hub in the Maldives, a scheme the cash-strapped Indian Ocean archipelago hopes will help it through a looming debt crunch.

The planned investment led by family office MBS Global Investments over five years would exceed the Maldives’ annual GDP of around $7bn, but Moosa Zameer, finance minister, said the country needed to “take the leap” to diversify away from tourism and fisheries.

Debt coming due in the next two years was “the biggest challenge that we have”, Zameer told the Financial Times in a video interview, adding that the deal was “something we see as a potential contributor to bring us out of certain difficulties that we are in”.

MBS, which says it manages assets worth approximately $14bn, is the family office of a wealthy Qatari, Sheikh Nayef bin Eid Al Thani. It plans to finance the Maldives investment by tapping its network of family offices and high net worth individuals to form a consortium.

MBS’s chief executive Nadeem Hussain said the phased project could be funded through equity and debt and that firm commitments “north of” $4bn-$5bn had already been secured.

“We appreciated right from the offset what was involved in terms of funding and we’ve made the necessary alliances and brought in the necessary partners to ensure we have that,” said Hussain. “It is a large sum of money.”

MBS and the Maldives government signed a joint venture agreement on the project on Sunday.

According to the project masterplan, the Maldives International Financial Centre will be a 830,000 sq m hub able to host 6,500 people and provide employment for 16,000 in the capital Malé.

A “financial freezone for blockchain and digital assets globally”, it would aim to triple the Maldives’ GDP within four years and generate revenue of “well over $1bn by the fifth year”, the masterplan said.

The announced investment comes only months after India unveiled a $760mn bailout for the Maldives to stave off a possible sovereign default.

In December, rating agency Moody’s noted Maldives’ “external liquidity pressures remain heightened given substantial external debt obligations”, including $600-700mn due this year and around $1bn in 2026, including a $500mn sukuk, a form of debt that follows Islamic strictures against interest.

Zameer acknowledged the role India and China had played as “development partners” to his country, but said the financial centre deal offered a new model.

“With MBS we are getting into business, it’s going to be a business which is totally different from the traditional models of borrowings that we do,” the finance minister said.

The archipelago’s advantages include political stability, good connectivity and proximity to big markets such as India and the Gulf countries. But one senior Indian businessperson said it “won’t be easy” for Malé to become a regional financial centre, particularly given the competition from established hubs such as Dubai and Mauritius.

The hard choice between growth, security and climate

While the green agenda remains critical, it must be balanced with the other fundamental imperatives of our age

Irrational, unrealistic, unworkable: some of the words Tony Blair used last week to describe governments’ approach to climate change. Arguing that the strategy should be more pragmatic, the former UK prime minister called for “solutions that match the scale of the challenge and a new politics to get them done”.

For governments across western Europe, climate change is just one of three existential challenges — the other two being lack of competitiveness and growth, and Vladimir Putin’s threat to peace. But time and money are finite. Governments must prioritise. So which of these is the most important?

Growth must come first. Without it, Europe will not have the resources either to defend itself or to decarbonise its economies — and the sums involved will be huge. The EU’s ReArm Plan aims to mobilise €800bn in spending between now and 2030; other estimates suggest European defence spending might need to rise by €250bn a year. An additional €477bn is required each year, over the same period, to reach the EU’s climate target.

Security must come next, and not just for the obvious reason that the bedrock of growth is peace and stability. A wider European war would destroy innovation and capital, the engines of decarbonisation. So nations need to recalibrate their analysis of risk.

Rapid rearmament and strengthening national security is a whole-economy effort. It requires almost every area of human endeavour — manpower, food, logistics, infrastructure — to play its part. For that to happen, governments in London, Paris, Berlin and right across Europe need to change their mindset and modus operandi.

Officialdom has been shaped by an era of globalisation and peace, in which the EU could shelter under the US’s protective shield. Global institutions forged climate agreements. Regulators were tasked with tackling climate change. Interest rates at record lows — fuelled by quantitative easing — helped finance green projects.

That world has gone. Yet the processes it created live on, spawning climate regulations and policies that jar with today’s fiscal realities and grate with politicians’ talk of the need for “urgent action” on defence.

So to generate growth in order to re-arm quickly, government agendas need to be refocused and trade-offs confronted. Energy is top of the list. The climate and defence agendas are, in one way, aligned here: investing in renewables improves energy security. Increasing energy supply from new sources is necessary not just for rearmament but also to power digitalisation and AI, which is vital for defence.

Yet a tension exists. Building wind and solar farms, not to mention nuclear power stations, takes time. The sun does not always shine, the wind does not always blow. So in the short term, if Europe needs more reliable, affordable energy to power rearmament then gas will remain key. Are governments — and electorates — prepared to see emissions rise as energy-intensive factories ramp up rearmament?

Next, regulatory frameworks must be reviewed to ensure that they do not undermine investment in defence. Politicians should look at regulators’ remits and ask if they strike the right balance between growth, security and climate.

And finally, finance. Should nations prioritise defence over green incentives? Which will do more to deter Putin in the next few years: more electric vehicles, or more drones?

On defence and decarbonisation, Europe is in a race against time. Recognising the need to prioritise security over climate in the near term is not to deny the existential threat. It is to understand that without peace, Europe’s green transition is impossible. Growth and security must come first. Confronting this hard choice is something Europe’s leaders can no longer ignore.

Market Questions is the FT’s guide to the week ahead

The US Federal Reserve is widely expected to keep interest rates at their present level when it meets next week, with chair Jay Powell’s press conference likely to be investors’ main focus following a volatile month for financial markets.

Donald Trump’s erratic tariff announcements have buffeted US stocks, Treasuries and the dollar in recent weeks while fanning concerns about slower growth and higher inflation in the world’s biggest economy. The president has repeatedly signalled that he thinks interest rates should be lowered to stimulate the economy. 

Yet data released on Friday showing the US added 177,000 jobs in April, more than economists had expected, bolstered investors’ conviction that the Fed will remain on hold. Traders in swaps markets are currently pricing in close to a 97 per cent chance that rates will remain between 4.25 and 4.5 per cent.

Wednesday’s central bank meeting “looks like a placeholder: policy rates on hold and no change in Chair Powell’s tone from his recent speeches,” said Bank of America strategists led by Aditya Bhave.

“We think the bar for a June cut is high, but Powell is unlikely to rule it out at this stage,” he added.

Trump last month renewed his criticism of the Fed chair, claiming he has the right to fire Powell, who he has lambasted for being “too slow” to lower rates. Asked whether he would sack the central banker, Trump said: “If I want him out, he’ll be out real fast, believe me.”   

US stocks and the dollar sold off sharply on the comments as investors worried that the central bank’s independence was under threat only to rebound after Trump rowed back. 

Powell is likely to sidestep any questions about his relationship with Trump, but his views on the potential impact of the president’s tariffs on inflation and employment will be scrutinised. George Steer

Will the Bank of England signal more cuts?

Traders are fully expecting the UK’s central bank to reduce its policy rate by a quarter point to 4.25 per cent at its meeting on Thursday, according to levels implied by swaps markets. Most expect three more cuts of the same magnitude to follow before the end of the year.

What the Bank of England signals on the inflationary outlook will be crucial to whether those expectations hold. Analysts at Barclays are expecting the bank to cut its inflation forecast, “signalling that the balance of risks has shifted to a less inflationary outlook”. That will “open the door to a June cut without explicitly referencing it, to retain optionality”, they argue.

Like other major central banks, the BoE is caught between the growth impacts and inflationary effects of Donald Trump’s stop-start trade war, making any decision to adjust monetary policy in response fraught with difficulty. Recent UK economic data has been mixed, with better than expected retail sales in March but weak readings of business activity.

BoE governor Andrew Bailey has warned that the central bank must “take seriously” the risks to growth from the tariff surge. The hawkish rate setter Megan Greene, has said that the effect of global tariffs will probably be disinflationary for the UK.

JPMorgan’s Allan Monks is expecting a “dovish shift” from the BoE on the impact of tariffs. “While potential supply chain impacts remain one consideration, weaker growth and an excess supply of Chinese goods may prove more dominant,” he argues, saying currency moves have not added to the inflationary pressures as would have been expected. But he expects the bank to be “cautious” in putting much weight on this disinflationary view. Ian Smith and Valentina Romei

Have stocks passed peak anxiety over tariffs?

This week’s rally in global stocks saw Wall Street’s blue-chip S&P 500 recoup all of its sharp losses since Donald Trump’s April 2 announcement of so-called “reciprocal” tariffs roiled markets.

After a dramatic 9 per cent drop in the first week of April, US stocks started to regain ground after the president announced a 90-day tariff pause on April 9. David Lefkowitz, Head US Equities at UBS Global Wealth Management said the U-turn “gave us the confidence to re-upgrade equities”.

Last week, investors were further cheered by progress towards US-China trade talks, as well strong earnings reports from US tech giants, and encouraging data on the American economy. But the policy environment remains far from certain, with little tangible progress towards trade deals secured. That leaves many analysts feeling nervous about piling back into a market that saw such dramatic falls so recently. The question for equity investors is: is the worst over, or is it still yet to come?

The rally is “quite astonishing considering the big shake up of global trade that has happened in the span of four weeks,” said Elyas Galou, senior investment strategist at Bank of America, adding that it “shows that investors remain fundamentally bullish on the outlook for US equities, rates and the dollar”.

“The strategy of the Trump administration was to frontload the bad news,” he said “Now the market is frontloading the next 100 days. I think this period will focus on lower taxes, lower tariff rates,” he explained.

Others are more cautious. “We think the rally off the lows is more a function of position capitulation than an ‘all clear’ signal for risk,” read a BNP Paribas analysis note, adding that earnings downgrades “could see equities re-test year-to-date low”.

A crypto company part-owned by the Trump family stands to earn millions of dollars from a business deal involving a state-backed investment fund from the UAE. The arrangement amounts to “foreign policy for sale,” critics claim.

As the leaders of World Liberty Financial, a crypto company part-owned by US president Donald Trump and his family, fan out across the globe to try to win new business, critics have raised the alarm over the collection of alleged conflicts of interest trailing in their wake.

On Thursday, Eric Trump appeared onstage in Dubai at the crypto conference Token2049. Alongside him sat Zachary Witkoff, cofounder of World Liberty Financial and son of the White House envoy to the Middle East, Steve Witkoff.

Together, the pair announced that USD1, a crypto coin unveiled by World Liberty Financial in March, would be used by MGX, an investment firm funded by the United Arab Emirates, to make a $2 billion investment in Binance, the world’s largest crypto exchange.

As a sort-of intermediary in the deal, World Liberty Financial stands to earn tens of millions of dollars. “We thank MGX and Binance for their trust in us,” Witkoff told the crowd at Token2049, The New York Times reported. “It’s only the beginning.”

USD1 is what’s known in industry circles as a stablecoin, a type of crypto coin tied to a $1 valuation by a reserve of cash and other assets. A stablecoin holds a steady valuation by way of the understanding that, if ever somebody wants to redeem a coin for the dollar it represents, the issuer can draw from the reserve.

The model is simple: World Liberty Financial receives US dollars in exchange for coins that customers can trade freely in the crypto market. It keeps some of those dollars in cash and cash-equivalents, and invests the rest into US government bonds—also called Treasuries—which yield interest.

The profits of stablecoin issuers depend partly on the going interest rate—right now, short-term Treasuries yield a little over 4 percent—but otherwise scale in a linear fashion with supply. The larger the amount of a stablecoin in circulation, the heftier the underlying reserve of assets from which the issuer can generate income.

Therefore, the deal between MGX and Binance, which will increase the USD1 supply by up to 2 billion units, stands to be immensely lucrative for World Liberty Financial—and by extension, Trump and his family. If the company were to invest the entire $2 billion in short-term US Treasuries, it would earn approximately $85 million in interest each year at current market rates.

However, the deal has inflamed concerns about the prospect that World Liberty Financial, in which the Trump family holds a 60 percent stake through a separate entity, could become embroiled in a thicket of conflicts and thorny ethical issues. By transacting in USD1, the argument goes, entities affiliated with foreign powers could indirectly transfer wealth to the Trump family and purchase good favor with the sitting US president.

“The transaction reeks of influence peddling,” claims George Selgin, director emeritus for the Center for Monetary and Financial Alternatives at the Cato Institute, a US think tank. It risks “making the US look more and more like a banana republic.”

USD1 is the latest in an expanding line of crypto coins issued by Trump-related entities that critics fear could theoretically be used in this way, including a separate World Liberty Financial coin that promises a say in the company’s business decisions, and a memecoin launched by the president in January.

“It is foreign policy for sale and justice for sale,” claims Robert Weissman, copresident of consumer rights non-profit Public Citizen.

World Liberty Financial did not respond immediately to a request for comment. In a statement, White House deputy press secretary Anna Kelly said, “President Trump’s assets are in a trust managed by his children. There are no conflicts of interest.”

Meanwhile, as World Liberty Financial forges into the stablecoin business, a piece of legislation that will establish the rules by which stablecoin issuers must abide —the GENIUS Act—is being fast tracked in the Senate. A parallel bill—the STABLE act—is being considered by the House.

The incoming stablecoin legislation “will make it easier for the president and his family to line their own pockets,” claimed Democratic senator Elizabeth Warren in a statement.

The conflict of interest allegations have not prevented representatives of World Liberty Financial from setting out on a global business tour. In recent visits to Pakistan, Bulgaria, and the UAE, the Trump family and World Liberty Financial founders have rubbed shoulders with lobbying groups, policymakers, and crypto industry luminaries.

“The stablecoin wars are in full swing, and new entrants are lining up with dotcom-era exuberance,” says Christian Catalini, founder at MIT Cryptoeconomics Lab. “Expect inventive maneuvers. Anyone chasing [the market leaders] will pull every lever the rulebook vaguely permits.”

On April 27, the World Liberty Financial team was pictured alongside Changpeng Zhao, founder of Binance, who recently served a short prison sentence in the US after pleading guilty to failing to maintain an effective anti-money-laundering program. The USD1 stablecoin floats on top of Binance’s crypto network. “We keep building,” Zhao tweeted, responding to the picture.

On Thursday at Token2049, Eric Trump and Witkoff shared the stage with Justin Sun, creator of crypto network TRON, who recently announced he had invested a total of $75 million in World Liberty Financial’s first crypto coin. Soon, USD1 will be available on TRON too.

In 2023, the US Securities and Exchange Commission charged Sun with market manipulation, among other violations. Weeks after Sun announced his latest investment into World Liberty Financial, a federal judge granted a petition by the SEC to pause the lawsuit to consider a potential resolution.

“Never before in American history have foreign governments, as well as people and corporations under investigation, so overtly and directly funneled vast sums to the president of the United States and his family,” claims Weissman. “This is far more than is captured by the term ‘conflict of interest.’”