Global news wrap: DeepSeek’s rise, monetary policy announcements, Oscar nominees

Several central banks will announce their monetary policy decisions in the coming weeks. Their moves will be keenly watched by the markets amid potential geopolitical disruptions from the Donald Trump administration.

The US Fed, which has eased rates since September 2024, is widely expected to hold rates in the February meeting to navigate uncertainties arising due to Trump’s immigration and tariff policies. 

Meanwhile, India could finally start easing monetary policy amid slowing economic growth and stable inflation. The European Central Bank (ECB) and the Bank of England are also expected to cut rates amid sluggish economic growth despite worries about inflation persisting. 

Usually, central banks follow the Fed’s monetary policy path. However, 2024 saw a divergence as unique challenges forced countries to tweak their interest rates based on their local growth-inflation dynamics. This will likely continue at the start of 2025 even as the strengthening US dollar has put significant pressure on emerging-market economies.

Trump walks the talk on ‘America First’

After returning to power, US President Donald Trump moved quickly to reinstate policies related to his ‘America First’ agenda. On inauguration day, Trump signed more than 20 executive orders related to immigration, energy and the federal workforce. 

Also read: Can India ward off Trump’s fury on illegal immigration?

He also threatened to impose tariffs on several countries including the US's top three trade partners – Canada, Mexico and China. Trump threatened to impose 25% tariffs on Canada and Mexico, while his administration is planning to impose a 10% tariff on China. The US’s share of trade with China and Canada has declined significantly in the past few years, while trade with Mexico remains largely on an upward trajectory. Canada, Mexico and China account for 40% of the US’s total trade. While Trump’s tariff threats could impact these countries, the US may be affected, too, through higher prices of goods and retaliatory tariffs.

DeepSeek shakes markets

DeepSeek, a Chinese AI startup, shook the global technology market after it surpassed OpenAI’s ChatGPT to become the most downloaded free app in the US on Monday. The rise of DeepSeek AI, which the company claims to have developed in just two months for less than $6 million, led to a sharp decline in the stocks around the globe, particularly in the semiconductor and AI segments. 

Also read | Mint Explainer: How DeepSeek’s lean AI can revolutionise India’s AI future

Nvidia, a major beneficiary of the AI boom, saw a 13% drop in its shares, while European companies in the semiconductor space such as ASML and ASM International also experienced significant losses. Japanese tech stocks, including Advantest and SoftBank, were similarly hit. 

The US has been dominating the AI space with targeted investments for a long time, and it recently announced a $500-billion AI infrastructure initiative called Stargate, backed by OpenAI, Oracle and SoftBank. However, China's rapid strides on AI are challenging this dominance.

Israel-Hamas truce

After 15 months of brutal conflict, a ceasefire agreement between Israel and Hamas was finally reached on 20 January. The deal was brokered by Egyptian and Qatari mediators, who prefer peace in the region, and was backed by the US. 

The three-phase deal calls for the release of 33 Israeli hostages, including women, children and elderly captives, by Hamas. In exchange, Israel will free around 1,650 Palestinian prisoners. The agreement also ensures the delivery of 600 truckloads of humanitarian aid to Gaza daily and allows displaced Palestinians to return to northern Gaza. 

The war, which began on 7 October 2023, so far has claimed over 45,000 lives in Gaza and left over 100,000 injured. The truce, if successful, may help reduce conflicts in the West Asian region as Iran-backed Lebanon, Iraq and Yemen were also involved in a proxy war with Israel.

Oscar nominations announced after delay

The Oscar nominations were finally announced after a delay of a few days due to the devastation caused by wildfires in Los Angeles. 

Netflix musical Emilia Pérez led with 13 nominations but fell short of creating the history of the highest nominations of 14 by La La Land, Titanic, and All About Eve. The Brutalist and Wicked secured 10 nominations each. 

While Emilia Pérez won Best Film in the Comedy/Musical category at the Golden Globes, The Brutalist won in the Drama category, suggesting a tough competition between the two. 

Also read: The acid test for BSE SME IPOs is here amid stock market cracks

Meanwhile, India’s Anuja, backed by Priyanka Chopra and Guneet Monga, secured a nomination for Best Live-Action Short Film. Monga won an Oscar for The Elephant Whisperers in 2023. The much-talked-about All We Imagine As Light, directed by Payal Kapadia, failed to make it to the Oscars. The movie had earned two nominations at the Golden Globes, including Best Director.