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Tesla shares dropped Tuesday after the electric vehicle maker announced lower-priced models.
Key Takeaways

• An EV leader saw its stock drop on Tuesday, Oct. 7, 2025, after announcing lower-cost models, while a chipmaker added to its gains in the wake of a massive AI deal.
• Tesla shares slid after the company rolled out cheaper models that analysts said weren't as cheap as they had hoped.
• Shares of Advanced Micro Devices added to yesterday's gains on a big partnership with OpenAI.

Shares of the world's most valuable electric vehicle maker slumped on Tuesday, Oct. 7, 2025, after revealing lower-cost models, while a chipmaker added to its gains in the wake of a massive AI deal.

The major U.S. equities indexes finished lower as tech stocks came under pressure. The S&P 500 dropped 0.4% and the Nasdaq declined 0.7% Tuesday, after retreating from intraday records. The Dow slipped 0.2%. To read more reporting from Investopedia on the day's market moves, click here. 

Advanced Micro Devices (AMD) was a bright spot in a down day for the broader semiconductor industry, as shares climbed 3.8%, adding to yesterday's 24% jump on the chipmaker's partnership with ChatGPT owner OpenAI.

Other semiconductor and AI-related stocks, including chip manufacturing equipment makers Lam Research (LRCX) and Applied Materials (AMAT), dropped along with shares of Oracle (ORCL) following a report that its cloud-computing margins could be smaller than expected. Shares of hard disk drive maker Seagate Technology (STX), which have soared in recent months on anticipation of AI-driven demand for data storage, dropped 7.3% to lead losses on the S&P 500.

Tesla (TSLA) shares dropped nearly 5% after the company announced lower-priced versions of its Model 3 and Y vehicles, with the 3 starting at around $35,000 and the Y near $38,000. Some analysts suggested the cheaper models weren't as cheap as they had hoped.

Shares of Ford Motor (F), another automaker, tumbled about 6% following reports that a fire at an aluminum plant in Oswego, N.Y., would disrupt operations over the coming months.

Adtech darling AppLovin (APP) surged 7.6% to log the S&P 500's top daily performance, clawing back some of Monday's losses on reports of a probe by the Securities and Exchange Commission into AppLovin's data collection practices. While acknowledging the investigation could drive short-term volatility, analysts at Oppenheimer reiterated an "outperform" rating on AppLovin's stock Tuesday, suggesting their positive long-term outlook remains intact.

Shares of PayPal (PYPL) gained close to 5% after the financial technology firm announced the launch of its Ads Manager service for small businesses. Small businesses will be able to opt into PayPal's Ads Manager with no upfront costs or minimum commitments, and the fintech will automatically serve relevant ads on the companies' platforms, PayPal said.

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Geopolitical and economic uncertainty have caused gold demand, and prices, to surge this year.
Key Takeaways

• Gold traded above $4,000 an ounce for the first time on Tuesday and continued to rise on Wednesday, underscoring strong demand from investors hedging against risk and chasing the precious metal's momentum.
• Some analysts have linked gold's gains to a "debasement trade," in which investors buy the traditional safe-haven asset as a hedge against waning faith in the integrity of the U.S. dollar and Treasurys, two pillars of the global financial system.
• Goldman Sachs on Monday raised its gold price forecast, and researchers at the World Gold Council expressed confidence that the dynamics driving gold prices higher will persist.

Gold hit $4,000 an ounce for the first time on Tuesday and continued to rise on Wednesday, extending its record run amid heightened economic uncertainty and surging interest from everyday investors.

Gold futures hit an all-time high of $4,072 an ounce Wednesday morning. The precious metal, which investors typically favor as a hedge against inflation or stock market downturns, has gained about 54% this year, more than most stocks in the S&P 500.

“The latest leg higher has been underpinned by the growing uncertainty over the U.S. government shutdown and fear-of-missing-out flows into physical gold ETFs,” wrote Adam Turnquist, Chief Technical Strategist at LPL Financial, in a note Tuesday.

Why This Matters To Investors

Gold prices, like stocks, have surged to record highs this year. Investors worried about missing out on one of the year's best-performing financial assets should first consider the fundamental supply and demand dynamics underpinning gold prices, including geopolitical risk, debt yields, and the value of the U.S. dollar.

Gold ETFs pulled in a record $17.3 billion last month, according to the World Gold Council, which attributed the buying to political tensions, options market activity, and a weaker U.S. dollar.  

Blowout demand for the traditional safe haven has partially been driven by what some analysts have dubbed the “debasement trade,” referring to retail investors buying gold as a hedge against a ballooning federal debt, threats to the Federal Reserve’s independence, and a global rebuke of the U.S. dollar. The dollar’s decline has both given investors a reason to buy gold and made that gold less expensive for international buyers. 

Gold has also been in high demand among global central banks seeking to diversify their reserves with an asset prized for its stability during geopolitical and economic crises. 

Where Can Gold Prices Go From Here?

Goldman Sachs on Monday forecast gold will rise to $4,900 an ounce by the end of 2026, up from its prior estimate of $4,300.

“The inflows driving the 17% rally since August 26th–Western ETF inflows and likely central bank buying–are sticky in our pricing framework, effectively lifting the starting point of our price forecast,” wrote commodities strategists Lina Thomas and Daan Struyven. They expect central banks, especially in emerging markets, and Western ETF buyers to continue to be the main drivers of demand next year. 

“We see the risks to our upgraded gold price forecast as still skewed to the upside on net,” because even a small rotation out of equities or Treasurys can have an outsized impact on the relatively small gold market, according to Thomas and Struyven. 

Would a Stock Sell Off Boost Gold?

Researchers at the World Gold Council, a gold industry trade group, also see potential for turmoil in the stock market to support gold prices. 

October, they note, is usually a jittery time for markets, and anxiety may be more acute this month “given lofty valuations, goldilocks earnings projections, high market concentration, extended positioning, and technical red flags.” 

But there’s no guarantee gold appreciates when stocks sell off, so researchers evaluated gold’s performance during 17 stock corrections since 1973 to isolate the variables that influence the relationship between stocks and gold. They found that “the only factor that really seems to matter is where the US dollar goes.” 

They warn that the dollar “looks almost as tactically oversold as gold is overbought,” which could set the stage for the greenback to rebound during a stock sell-off. But the good news for gold investors, they say, “is that during two-thirds of the equity sell offs the dollar has fallen” regardless of how overbought or oversold it was heading into the correction. 

Their analysis suggests that, even with the dollar trading near its lowest level in years, gold should still benefit from a flight out of equities into safe havens.

If, however, gold falls below $4,000, LPL’s Turnquist recommends investors keep an eye on support levels around the 20-day moving average of about $3,715. A drop below that level could precede a deeper pullback to the 50-day moving average around $3,515. 

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Tesla's stock has been on a powerful upward run in recent months.
Key Takeaways

• Tesla on Tuesday afternoon announced lower-priced versions of its Model 3 and Y vehicles, with both sporting starting price tags below $40,000.
• The shares finished the day lower, perhaps indicating a hope the cars would've been cheaper.

Cheaper Teslas have arrived. But are they cheap enough?

The electric vehicle maker on Tuesday afternoon announced its "most affordable vehicles" on X, revealing Standard versions of its Model 3 and Y vehicles. The vehicles are available for order on the company's website, with the 3 starting at around $35,000 and the Y near $38,000. Both models advertise a range of 321 miles in the new configurations.

The news was generally anticipated, with the company in recent days teasing impending news on social media. "Ultra-low cost of ownership, engineered for safety & comes with the best Tesla features you love," the company said Tuesday on X. Tesla (TSLA) earlier today also announced an update to its self-driving system.

What This Means for Tesla Investors

Tesla's stock retreated a bit on Tuesday, perhaps in part reflecting hopes the EV maker and tech giant would've priced new versions of its vehicles even lower than the sub-$40,000 levels it announced today. Stepping back, however, the stock's upward climb over the past few months points to growing optimism about the years ahead.

Tesla watchers have for years awaited lower-priced vehicles; some may still be hoping for a new, more affordable model, rather than lower prices on existing ones. CEO Elon Musk late last year suggested that such a vehicle—perhaps priced under $30,000—might be more geared toward use as a robotaxi than a traditional consumer car.

The company earlier this month reported third-quarter deliveries that, at near 497,000, were higher than Wall Street expected, though market watchers generally believe that the expiration of EV credits pulled some demand forward.

"The launch of a lower cost model represents the first step to getting back to [an about 500,000] quarterly delivery run-rate which will be important to stimulate demand for its fleet," Wedbush analysts wrote late Tuesday. The price, however, wasn't as low as they hoped, leaving them "relatively disappointed with this launch."

In any case, as the company's shares have risen this year—the stock has been on a tear lately, rising off spring lows—bulls have cited other drivers for the stock. A cheaper model might have signaled a more aggressive push toward building a fleet of vehicles that could both represent a future robotaxi network and serve as a platform for selling autonomous driving software.

The shares finished Tuesday down nearly 5% to $433, leaving them up about 7% in 2025 through the close.

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AI server maker Super Micro Computer was one of several stocks Wall Street analysts said could get a boost from AMD's OpenAI deal.
Key Takeaways

• Wall Street analysts highlighted Super Micro Computer, Dell Technologies and Astera Labs as some of the stocks that could gain from an OpenAI deal with Advanced Micro Devices.
• Several analysts suggested AMD's deal could be taken as a positive signal for the semiconductor sector and AI trade broadly, though they pointed to some of AMD's networking partners as more direct beneficiaries.

Advanced Micro Devices (AMD) has a number of partners that could be set to benefit from its big deal with OpenAI, according to Wall Street analysts.

The ChatGPT maker committed to buying several generations of AMD's AI chips, sending shares of the semiconductor firm up 24% yesterday and another 4% on Tuesday. The announcement also boosted shares of Super Micro Computer (SMCI), Astera Labs (ALAB), Dell Technologies (DELL), and others that have business with AMD.

J.P. Morgan analysts said in a note to clients Tuesday that they see current AMD partners and AI server makers Supermicro, Dell, and Hewlett Packard Enterprise (HPE) as poised to gain from the deal. They also highlighted Arista Networks (ANET) and Sanmina (SANM), which earlier this year agreed to buy ZT Systems’ Data Center Infrastructure manufacturing business from AMD and became a preferred manufacturing partner as part of the agreement.

Why This Matters for Investors

Several analysts suggested AMD's deal could be taken as a positive signal for the semiconductor sector and AI trade broadly, though they pointed to some of AMD's networking partners as more direct beneficiaries. The deal underscores the wide-ranging impact of the surge in AI demand on companies and stocks, with analysts likening the AI boom to a rising tide that lifts all boats.

"While the announcements till date from OpenAI have largely focused on tight partnerships with semiconductor companies, we expect to see similar partnerships with Hardware and Networking companies as critical to scaling infrastructure," J.P. Morgan said.

Citi analysts said they see AMD's OpenAI agreement as presenting a positive read-through for memory chip maker Micron Technology (MU) and Astera Labs as well. Astera, which supplies connectivity solutions for AI data centers and counts Nvidia (NVDA) and AMD as customers, saw its stock pop 10% Monday, before pulling back Tuesday.

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Investors are looking toward gold and away from the U.S. dollar.
Key Takeaways

• Enthusiasm for the "debasement trade" appears to be accelerating as retail investors increasingly question the status quo.
• Gold prices reached an all-time high of over $4,000 on Tuesday as it and other assets are viewed as safe havens.

Fear of impending catastrophe is putting the shine on gold and things like it.

Investors have been piling into what is sometimes called the "debasement trade," plowing into assets viewed as hedges against what they worry about most—including persistently high government debt and central bank independence—and panning what was once considered the safest place to park: the U.S. dollar.

That's helped push gold, as well as digital gold—also known as bitcoin (BTCUSD)—to all-time highs. The price of the precious metal surpassed $4,000 per troy ounce on Tuesday, while the world's largest digital currency topped $126,000 on Monday. The SPDR Gold ETF (GLD) and, to a lesser degree, the iShares Bitcoin Trust ETF (IBIT) have been climbing all year; the U.S. dollar index (DXY) has been in decline over the same period.

Why This Is Significant

Gold’s record-breaking rally underscores growing concerns about government debt, inflation, and the stability of the U.S. dollar. The surge in gold and bitcoin shows investors shifting toward hard assets as hedges against a weakening dollar and long-term financial instability.

Investors are hedging their bets against dollar dominance in a "really concerning" development, pushing up the price of gold and crypto assets, according to Citadel's Ken Griffin. "We're seeing substantial asset inflation away from the dollar as people are looking for ways to effectively de-dollarize or de-risk their portfolios vis-a-vis U.S. sovereign risk," he recently told Bloomberg.

JPMorgan's Nikolaos Panigirtzoglou in a report last week observed year-to-date net inflows into gold ETFs and mutual funds that were much larger than to those for gold mining and refining companies. That suggests to Panigirtzoglou that retail investors, in particular, were leaning into the debasement trade "as a hedge against a catastrophic scenario," because investing in gold miners would be less effective as one.

Meanwhile, private investors—individuals as well as family offices—have started to put a premium on "privacy and tangibility" of gold since the pandemic and have been buying gold bars and coins rather than ETFs. That has made the link between gold ETF flows and gold prices less important, and the link between central bank flows and gold more so, according to JPMorgan.

Central banks have been leaning into gold too. Though data from the World Gold Council for the second quarter would suggest that central banks bought less gold than in the preceding two quarters in terms of tons, net purchases of around $18 billion, in dollar-terms, are near quarterly averages since the back half of 2022. Meanwhile, gold's share in foreign exchange reserves is estimated at 24% for the second quarter, according to JPMorgan, a new high that's slightly above the first quarter's 23%.

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Furloughed government workers expect to receive back pay when the shutdown ends.
Key Takeawayas

• The White House is reportedly considering withholding back pay to 750,000 federal workers who are furloughed during the government shutdown.
  
• Back pay is required under a 2019 law, but a memo argues the law does not apply.
  
• The move by President Donald Trump is the latest escalation in the shutdown fight.
  

President Donald Trump is raising the stakes of the ongoing government shutdown by threatening to withhold back pay from 750,000 federal workers currently on furlough.

That's according to a legal analysis drafted by White House, first reported by Axios and confirmed by several other publications. The memo says the law does not require the government to pay employees who worked without pay or were furloughed during the shutdown, which began Oct. 1. It contradicts the White House's Office of Personnel Management guidance on the issue from September, which said employees would receive back pay as they have in the past.

What This Means For The Economy

The threat to withhold back pay from workers raises the stakes in the current shutdown fight and would magnify its impact on the economy.

Democrats were quick to dispute the memo's conclusions, arguing that the Government Employee Fair Treatment Act of 2019, passed in the wake of another government shutdown, requires workers to be paid retroactively. The memo contends the law requires Congress to approve any back pay when the shutdown ends.

"Federal employees are guaranteed back pay at the end of any shutdown by law," Congressman Don Beyer, a Democrat from Virginia, posted on social media. "This is not in question."

Should Trump follow through with the threat, and it withstands legal scrutiny, it would deepen the financial strain for federal workers who are going without paychecks during the shutdown. It could also worsen the economic consequences.

Trump has also threatened to break with precedent by permanently laying off workers who are furloughed during the shutdown. The Congressional Budget Office estimated 750,000 workers are missing a combined $400 million in pay each day the shutdown continues.

The government has been shut down as Democratic lawmakers have demanded Republicans undo cuts to the Medicaid program and extend health care subsidies set to expire at the end of the year. In contrast, Republicans have attempted to pass funding measures without altering health care policy. Both sides have shot down one another's bills.

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Ray Dalio thinks investors should allocate a considerable amount of their portfolios to gold.
Key Takeaways

• Ray Dalio at an event Tuesday said investors should allocate about 15% of their portfolios to gold.
• The precious metal recently traded around $4,000, reflecting a roughly 50% rise in 2025 alone.

Gold keeps rising. Some big-name investors say you should keep leaning in.

The latest is Bridgewater Associates founder Ray Dalio, who at an event on Tuesday said investors should allocate about 15% of their portfolio to the precious metal, citing its use as a source of downside protection. Gold futures recently traded at around $4,000 per troy ounce, reflecting a roughly 50% rise this year that has also lifted other metals.

“Gold is a very excellent diversifier in the portfolio,” Dalio said, according to a CNBC report. “If you look at it just from a strategic asset allocation perspective, you would probably have something like 15% of your portfolio in gold."

Why This Matters to Investors

Stocks are at highs, but that's not the only reason investors have lately been piling into gold as a hedge against concerns about high stock valuations, inflation and various forms of uncertainty. Investors generally suggest some allocation to gold, but a few are pointing investors toward higher allocations lately.

Gold, he said, "is one asset that does very well when the typical parts of the portfolio go down.” He had in September suggested an allocation of 10% to 15%, saying he preferred gold to Treasurys as a safe-haven asset.

"The latest leg higher has been underpinned by the growing uncertainty over the U.S. government shutdown and fear-of-missing-out flows into physical gold ETFs," LPL Chief Technical Strategist Adam Turnquist wrote Tuesday, citing "a macro backdrop consisting of a weaker dollar, the resumption of the rate-cutting cycle, U.S. deficit concerns, tariff-related inflation angst, and steady foreign central bank buying" as underpinning support for gold this year.

Experts generally recommend a range of allocations to gold, which is seen as a hedge against inflation and volatility as well as a source of possible appreciation. Broadly speaking, recommendations tend to land between about 5% and 20%, depending on market conditions and investors' personal risk tolerance.

DoubleLine Capital founder Jeffrey Gundlach recently suggested that an allocation of closer to 25% wouldn't be "excessive."

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Federal Reserve Board Chairman Jerome Powell speaks during a news conference after a Federal Open Market Committee meeting on September 20, 2023 at the Federal Reserve in Washington, DC.
Key Takeaways

• The next Federal Reserve policy committee meeting is scheduled for Oct. 28 and 29.
  
• The Fed is widely expected to cut the fed funds rate by a quarter of a percentage point to a range of 3.75% to 4%.
  
• Fed officials are cutting rates because they're concerned about signs of weakness in the labor market, and want to lower borrowing costs to encourage hiring.
  

The Federal Reserve's policy committee meets next on Oct. 28 and 29, and policymakers are widely expected to cut the central bank's key interest rate to lower borrowing costs and prevent the shaky job market from collapsing.

What To Expect From The October Meeting

Investors expect the Federal Open Market Committee to reduce the fed funds rate by a quarter of a percentage point to a range of 3.75% to 4%, according to the CME Group's FedWatch tool, which forecasts rate changes based on fed funds futures trading data. That would mark the lowest level for the fed funds rate since December 2022. The Fed cut the key rate in September for the first time since December 2024.

Fed officials have said they're cutting interest rates to boost the economy and prevent a surge of unemployment. Job growth nearly came to a halt this summer as tariffs have pushed up prices and squeezed consumer budgets.

What This Means For Your Finances

If the Fed lowers its key rate as expected, interest costs on many kinds of short-term debt would fall. That includes credit cards, car loans, and anything tied to bank prime rates, which are often set at a certain percentage above the fed funds rate. On the other hand, returns on CDs and high-yield savings accounts would also decrease, and inflation could rise further.

What Are The Fed's Major Considerations?

The Fed is tasked by Congress with a dual mandate to keep inflation low and employment high using the fed funds rate, which is the interest rate banks charge to borrow money from one another. The fed funds rate affects borrowing costs on short-term loans like credit cards and car loans, and indirectly influences longer-term loans like 30-year mortgages.

When inflation is high, the Fed raises the rate to discourage borrowing and cool down the economy, allowing supply and demand to rebalance. When the job market weakens, the Fed cuts interest rates to encourage business and give a boost to hiring.

Currently, the economy is facing a rare situation where inflation and the job market are worsening at the same time, posing a dilemma for the Fed as to which problem to tackle first. Officials have been split on what approach to take. Some have advocated for further rate cuts in the coming months, while others view inflation as a greater threat and would like to keep rates higher for longer.

How is employment? Recent reports indicate the job market is slowing down. The country actually lost jobs in June, the first month of losses in more than four years, and added a mere 22,000 in August. Meanwhile, more people are filing for unemployment insurance, and more people are staying on unemployment for longer.

The next monthly official payrolls report from the Bureau of Labor Statistics, covering September, will shed more light on the matter. That report was due Oct. 3 but has been delayed because of the government shutdown.

How is inflation? The Fed's preferred measure of inflation, "core" Personal Consumption Expenditures (excluding food and energy), rose 2.9% over 12 months in August, according to the Bureau of Economic Analysis. That figure leaves the Fed on course for a rate cut.

The Fed was scheduled to see one more major inflation report, on September's Consumer Price Index, on Oct. 15 just before the meeting, but that is likely to be delayed due to the ongoing shutdown.

Inflation has accelerated in recent months, getting farther away from the Fed's goal of a 2% annual rate. Most Fed officials, with the notable exception of Trump appointee Stephen Miran, have said Trump's tariffs are pushing up consumer prices and are responsible for most of the inflation increase.

What else is happening? The government has been shut down since Oct. 1, due to a standoff over health care policy, which has delayed all kinds of federal economic data. Statistical agencies will publish the reports after the government re-opens, but if the standoff continues, a shutdown could leave the Fed flying blind.

Will The Supreme Court Help Trump Take Over The Fed?

A major question hanging over the Fed this year is whether Fed Governor Lisa Cook will remain on the 12-person voting committee. President Donald Trump has attempted to oust Cook, citing unproven allegations of mortgage fraud, and install his own nominee in her place as he pressures the Fed to dramatically lower interest rates.

Cook sued to stop her firing and the case has gone all the way to the Supreme Court, which has ordered that she be allowed to remain on the job at least until the court hears oral arguments in January. Cook had been appointed to a 14-year term as a Fed leader by former President Joe Biden.

Cook's removal could be a major milestone in Trump's efforts to remake the Fed, which is an independent agency outside direct control of the White House.

What Fed Officials Are Saying

In recent speeches, Fed policymakers have highlighted the risks to their dual mandate, and several have advocated a cautious approach to rate cuts in the coming months.

"I'm a little wary about front-loading too many rate cuts and just counting on the inflation going away," Austan Goolsbee, president of the Chicago Fed, said on CNBC Friday.

Jeff Schmid, president of the Kansas City Fed, said he would take a data-dependent approach, even though much of the usual data isn't available during the shutdown.

"Of course, data dependency requires data," he said this week at an event in Kansas City, Missouri. "While I am hopeful that the government data that underpins Fed decision-making will soon become available again, in the meantime, I will be monitoring alternative labor market and price data closely."

Stephen Miran, Trump's newest appointee to the Fed's board of governors, remained the Fed's lone advocate for steep rate cuts. In an interview on Bloomberg TV last week, Miran said Trump's economic policies would help reduce inflation, particularly his immigration crackdown, which Miran said would lower demand for housing and subsequently lower rent inflation.

How Does the Federal Reserve Work?

The Federal Open Market Committee (FOMC) is the body that sets the fed funds rate for the Federal Reserve System, the United States' central bank. It holds eight regularly scheduled meetings each year, which are not open to the public. The Fed's use of interest rates to influence the economy is called monetary policy.

The FOMC consists of 12 voting members: the seven board governors, the Federal Reserve Bank of New York president, and four other regional bank presidents who serve rotating one-year terms.

At each FOMC meeting, the committee members discuss economic and financial conditions and decide whether and how much to change the fed funds rate. The FOMC issues a public statement about its decision at 2 p.m. on Wednesday when the meeting concludes. The Fed chair, currently Jerome Powell, typically hosts a press conference afterwards to explain the decision.

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The Trump administration has made investments in several mining companies as part of its efforts to support domestic production of resources that are critical to national security.
Key Takeaways

• Shares of Trilogy Metals soared on Tuesday after the White House said it would take a stake in the minerals exploration company and support its efforts to extract critical minerals in an Alaskan mining project.
• The Trump administration has made equity investments in several mining companies this year as part of its efforts to support domestic production of resources that are critical to national security.
• The government's stakes in mining companies mirror similar deals with U.S. semiconductor companies, which the Trump and Biden administrations have both sought to support.

Shares of Trilogy Metals (TMQ) skyrocketed on Tuesday after the Trump administration announced it would take a stake in the Canadian mining company, the latest in a string of government investments in industries deemed critical for national security. 

The White House on Monday afternoon said it was investing $35.6 million in Trilogy Metals “to support mining exploration in Alaska’s Ambler Mining District.” The investment will give the federal government a 10% stake in the Vancouver-based miner. 

President Donald Trump also ordered federal regulators to move forward with permitting the construction of a 211-mile road to the Ambler Mining District to “enable access to large deposits of copper, cobalt, gallium, germanium, and more.”

Why This Matters To Investors

The Trump administration this year has made several investments in public companies it deems critical to national security interests. Investors expect more deals to come, which could present an opportunity for investors confident they can preempt the White House.

Trilogy is one of several mining companies in which the federal government has taken a stake this year in an effort to shore up domestic supply of strategically significant resources. The White House last week said it would restructure an existing deal with Lithium Americas (LAC) to take a 5% stake in the company and a lithium mine it’s developing in Nevada. In July, the Department of Defense struck a deal to become the largest shareholder of rare earths miner MP Materials (MP). 

Shares of Trilogy Metals jumped as much as 280% in early trading on Tuesday and were recently up 220%.

Why Another Mining Investment?

President Trump has taken an unconventional approach to industrial policy in his second term, dramatically expanding the government's influence over business. On top of its stakes in mining companies, the federal government has taken a 10% stake in chipmaker Intel (INTC) and, in exchange for permission to sell advanced semiconductors to China, struck controversial revenue-sharing agreements with Nvidia (NVDA) and Advanced Micro Devices (AMD).

The administration's focus on mining and semiconductors stems from heightened tensions with China. The world's second-largest economy mines and processes the vast majority of the world's rare earth minerals and magnets, which have a range of vital industrial and military applications. It also has a longstanding territorial dispute with Taiwan, home to Taiwan Semiconductor Manufacturing Co. (TSM), the world's largest manufacturer of advanced semiconductors that enable artificial intelligence.

U.S. demand for rare earths is expected to surge over the next decade as households and businesses replace fossil fuels with renewable energy, the generation and storage of which often relies on rare earths. Rare earth minerals and magnets are also essential components of some U.S. weapons systems.

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Polymarket, which is partnering with New York Stock Exchange owner ICE, was founded by Shayne Coplan in 2020.
KEY TAKEAWAYS

• New York Stock Exchange owner Intercontinental Exchange said it is investing up to $2 billion in Polymarket in a deal valuing the crypto-based prediction marketplace at around $8 billion.
• ICE said it will distribute Polymarket’s event-driven data and will partner with the prediction market on tokenization initiatives.

New York Stock Exchange owner Intercontinental Exchange (ICE) said it is investing up to $2 billion in cash in Polymarket, in a deal valuing the crypto-based prediction marketplace at around $8 billion.

Polymarket CEO Shayne Coplan called the partnership a move that “marks a major step in bringing prediction markets into the financial mainstream.”

Why This Matters

Prediction markets such as Polymarket are still in the crosshairs of regulators. But its partnership with ICE, the owner of the New York Stock Exchange, gives it legitimacy and broader reach beyond retail investors. The backing of such a big financial institution may also help Polymarket return to the U.S. market after domestic consumers lost access to it in 2022.

ICE said it would also distribute Polymarket’s event-driven data, “providing customers with sentiment indicators on topics of market relevance,” and will partner with the prediction market on tokenization initiatives.

“Our investment blends ICE, the owner of the New York Stock Exchange, which was founded in 1792, with a forward-thinking, revolutionary company pioneering change within the Decentralized Finance space,” ICE CEO Jeffrey Sprecher said.

The deal with Atlanta-based ICE comes as prediction markets, or exchanges where you can trade “Yes/No” outcome contracts on a range of future events, continue to grow in popularity. The marketplace, which grabbed headlines during the 2024 U.S. presidential race, said in June that it formed a partnership with Elon Musk’s X to use the platform's data to provide insights and recommendations for the predictions platform.

Polymarket contracts aren't currently available in the U.S. after they were blocked by federal regulators from taking on U.S.-based traders three years ago. The company, however, is reportedly in the middle of a comeback in the U.S. after the Commodity and Futures Trading Commission and Justice Department ended a probe into it without filing charges.

In an interview with CNBC Tuesday, Coplan said that U.S. consumers would be able to buy Polymarket contracts “very soon.”