Major indexes slid this week as market participants adjusted their interest rate expectations.
Meanwhile, the Bitcoin halving is approaching, and some experts are urging buyers to exercise caution. Also this week, the company that made humanoid robots a reality introduced a new and improved version.
1. Bitcoin halving quickly approaching
The Bitcoin halving is a pre-programmed event that reduces the number of Bitcoin rewarded for mining blocks by half. As of the time of this writing, it was expected to happen around 9:00 p.m. EDT on Friday (April 19).
Bitcoin’s price has climbed significantly since the start of 2024. The positive momentum, which culminated in Bitcoin reaching an all-time high of over US$73,000 on March 13, was largely driven by the approval of spot Bitcoin exchange-traded funds in the US on January 10. The move has boosted interest in the cryptocurrency.
In the weeks leading up to the highly anticipated halving event, Bitcoin has experienced heightened volatility as investors speculate on the potential impact of reduced mining rewards. The price initially dropped from US$63,350 to US$60,022 in after-hours trading on Thursday (April 18). However, it recovered later that night, experiencing a 4.55 percent increase to reach US$62,750 just before 1:00 a.m. EDT. This was followed by another price surge to US$64,985 at 3:00 a.m. EDT. As of 3:00 p.m. EDT on Friday, Bitcoin had experienced a 9 percent upswing in the prior 24 hours.
Overall sentiment among investors has ranged from optimistic to skeptical. Some analysts believe that the halving could be a “sell the news” event. In a note released on Wednesday (April 17), analysts at JPMorgan (NYSE:JPM) warned investors that the Bitcoin price is likely to weaken after the halving, citing overbought conditions as a primary reason why. Historical data from Bitcoin’s three previous halvings shows the price has surged within a year of the event.
2. Tech stock selloff triggers index slide
After months of strong growth, US tech stocks are experiencing pullbacks.
The S&P 500 (INDEXSP:.INX) fell 3.85 percent over the course of six consecutive trading days, dipping below 5,000 on Friday for the first time since February 22. According to CNBC, it was the index’s worst performance since March 2023, and tech stocks were the worst-performing segment on Friday and during the week.
Macroeconomic factors such as tensions in the Middle East and Ukraine, and the March consumer price index and jobs reports could have also contributed to the S&P’s slide. The data from these reports, combined with other inflation readings, have prompted industry professionals to second guess their previous assumptions about interest rate cuts in 2024, dropping from three expected reductions this year down to two or even none at all.
The Nasdaq 100 (INDEXNASDAQ:NDX) also declined over the course the week, and by the end of trading on Friday, the index had fallen 6.05 percent during the five day period. This was driven by a decrease in NVIDIA’s (NASDAQ:NVDA) share price, which fell by 14.52 percent for the week and by 8.35 percent on Friday alone.
3. Meta Platforms releases Llama 3
Meta Platforms (NASDAQ:META), the parent company of Facebook, released Llama 3, a newer, more powerful version of its open-source large language model on Thursday, saying it will “boost your intelligence and lighten your load.’
Llama 3 features several improvements over the previous model, including reduced false refusal rates, meaning that Llama 3 is less likely to reject legitimate prompts and will give more engaging and varied responses.
According to Meta, Llama 3 is also better aligned with user values and goals, and was trained on a “high-quality human evaluation set” containing 1,800 prompts on 12 use cases, such as creative writing, asking for advice and summarization.
Models are available from Meta directly, as well as through the platforms Hugging Face and Kaggle. They are also offered by major cloud providers like Amazon’s (NASDAQ:AMZN) Amazon Web Services, Alphabet’s (NASDAQ:GOOGL) Google Cloud, Microsoft’s (NASDAQ:MSFT) Azure and IBM’s (NYSE:IBM) watsonx.
The company is also leveraging Llama 3 to power its artificial intelligence (AI) assistant, Meta AI, which it made available on Facebook, Instagram and WhatsApp on Thursday in select countries, including Canada. The company plans to introduce Meta AI in other countries soon, but has not announced specific release dates.
4. Microsoft avoids EU probe on OpenAI investment
Antitrust regulators for the EU have determined that Microsoft’s investment in OpenAI does not fit the parameters of an acquisition, meaning the deal will avoid a formal probe for now.
The deal in question was announced by Microsoft in early 2023, when the company said it would be extending its partnership with OpenAI, including a multibillion-dollar investment.
While neither company publicly revealed the details of the investment, several news outlets reported at the time that sources put the figure somewhere near US$10 billion over the course of several years.
‘The European Commission is checking whether Microsoft’s investment in OpenAI might be reviewable under the EU Merger Regulation,’ an executive for the EU said when the investigation was opened in January of this year.
In recent months, mega-cap tech companies such as Apple (NASDAQ:AAPL) and Google have found themselves in the crosshairs of antitrust and anticompetitive lawsuits in Europe and the US. The regulatory landscape for these major tech companies is evolving with the application of the Digital Markets Act in Europe in May 2023, which aims to regulate the behavior of large online platforms acting as gatekeepers in the digital sector.
Microsoft has maintained that its partnership with OpenAI, which began in 2019, has fostered innovation and competition, not stifled it, and that the company holds a non-voting position on OpenAI’s board, despite having invested billions of dollars over the years. While the EU has decided not to pursue an investigation into the partnership, sources told Reuters that regulators are looking into whether Microsoft’s influence distorts the market, and said the tech giant could face an antitrust lawsuit from the European Commission in the coming months.
5. Boston Dynamics unveils newest humanoid robot
Boston Dynamics unveiled the newest version of its fully electric humanoid robot Atlas, which is “designed for real-world applications,” according to a spokesperson for the company. The company posted footage of Atlas waking up on X, the social media platform formerly known as Twitter, on Wednesday.
The newer version of Atlas will be stronger, will have a greater range of motion and will be integrated into Boston Dynamics’ newly launched Orbit software, which provides users with an AI-powered, centralized platform to control and manage their robot fleet. The company plans to retire its older hydraulic-powered model, which was introduced in 2013.
Hyundai (KRX:005380) acquired an 80 percent controlling interest in Boston Dynamics from SoftBank Group (TSE:9984) in 2021 in a deal that valued the robotics company at US$1.1 billion. As part of the partnership, Hyundai agreed to provide a platform for testing and refining the robot’s capabilities to demonstrate the potential of humanoid robots like Atlas in practical applications — for example, in factories.
Securities Disclosure: I, Meagen Seatter, hold no direct investment interest in any company mentioned in this article.
