In today’s edition,

• Ive x OpenAI
• Tariffs reshape supply
• Android XR push
• Wall Street’s stablecoin play

Market Snapshot

U.S. markets closed lower this week as rising Treasury yields and renewed trade tensions weighed on sentiment. 

The Dow fell 2.21% to 41,603.07, the S&P 500 dropped 1.70% to 5,802.82, and the Nasdaq slipped 1.06% to 18,737.21. A weak 20-year Treasury auction midweek sent yields surging, especially on the long end, after Moody’s downgraded U.S. sovereign debt. That pressure grew after the House passed President Trump’s tax bill, which many believe could further widen the deficit.

Adding to the market’s stress, Trump announced a 50% tariff on EU imports starting June 1 and threatened a 25% tariff on iPhones unless Apple brings production to the U.S., dragging Apple shares down over 3%. Meanwhile, business activity rebounded in May, with both services and manufacturing PMIs rising to 52.3. But rising costs, weaker exports, and renewed supply chain delays, mostly tied to tariffs, kept optimism in check. For now, growth looks better, but the policy backdrop is getting trickier.

Stock market closing data for the week of May 19th to May 23rd, 2025

News Summaries

OpenAI is buying io, a hardware startup co-founded by Jony Ive, in a $6.5 billion all-stock deal, its biggest ever. The move brings in over 50 former Apple designers and engineers, including key names behind the iPhone and Apple Watch. The plan? Build a new category of consumer device designed for the AI era, not to replace the smartphone, but to rethink how we interact with intelligence. Ive and Sam Altman have been quietly exploring ideas for two years, and while no product is launching soon, the first is expected by 2026. This isn’t about quick wins; it’s about long-term shifts in computing. As Apple lags in AI and leans on OpenAI’s ChatGPT to stay relevant, Altman is stacking talent to shape what comes next. The message is clear: if AI is the leap everyone says it is, it needs hardware that’s built for it from the ground up.

Chinese smartphone exports to the US fell 72% in April to $688.5 million, their lowest level since 2011 amid escalating trade tensions and tariff threats, which have reached as high as 145%. This drop far outpaced the broader 21% decline in Chinese exports to the US, with mobile devices, laptops, and storage hardware seeing the steepest falls. The data reflects how supply chains are realigning, not vanishing: over the past year, Chinese exports of phone components to India have roughly quadrupled, as Apple deepens its manufacturing shift to the country. While the US continues to push for reshoring, near-term production of the iPhone in America remains unrealistic. The bigger picture here is that tariffs aren’t just a pressure tactic; they’re now a structural force, nudging global electronics away from old patterns and into new geographies.

Google has teamed up with China’s Xreal to launch Project Aura, lightweight AR glasses running its new Android XR platform, with prices expected between $200 and $600, far below the $1,000+ devices Meta and Apple are working on. Revealed at Google I/O, Aura glasses aim to deliver app-based AR experiences using a Qualcomm-powered puck and onboard chip, targeting a consumer release by early 2025. This marks Google’s clearest hardware step into AR since Android XR was announced, complementing its broader software expansion across TVs, cars, and smart homes. While Apple builds its own ecosystem end-to-end, Google is following its Android phone playbook supplying the OS while relying on partners like Xreal and Samsung for hardware. With mixed reality still finding its footing, Google’s bet seems clear: offer a more affordable, developer-friendly path to mass-market AR adoption. This may not win the race overnight, but it sets a different kind of pace – one built on reach, not exclusivity.

From the World of Crypto

America’s biggest banks – JPMorgan, Bank of America, Citigroup, Wells Fargo, and others are quietly discussing something that would’ve sounded far-fetched just a couple of years ago: launching a joint stablecoin. 

The idea is still at a very early stage, with companies like Zelle-operator Early Warning Services and The Clearing House involved in initial talks. But the motivation is clear that the banks are trying to get ahead of a shifting payments landscape before crypto-native players and big tech carve out even more territory.

Stablecoins, digital tokens pegged to the dollar and backed by reserves like cash or Treasurys, have become essential in crypto markets. But banks see a much wider opportunity – faster cross-border payments, smoother settlement rails, and perhaps even replacing parts of their current infrastructure. 

What’s changed? 

For one, a more crypto-friendly regulatory climate under a potential Trump administration. And second, the GENIUS Act, a new Senate bill, is inching toward providing the first real framework for stablecoin issuance.

This move is also about defense. If stablecoins issued by crypto firms or tech giants like Amazon or Walmart go mainstream, banks risk losing not just transaction volume but core deposits. A unified, bank-issued stablecoin could be their way to stay relevant and in control before someone else builds a better system outside the current rails.

Some regional banks are even considering forming a separate consortium, though it’s harder without the scale and infrastructure the big players already have. There’s also the option of opening access to the stablecoin to other institutions, making it more of a shared financial utility than a closed club.

At its core, this is about timing. Crypto firms are moving fast, and traditional banks don’t want to be left reacting. By teaming up, they’re trying to shape the next chapter of digital payments before someone else writes it for them.