We’re back with our monthly digest of the markets and all things investing with Chip.
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Let’s dive in.

When investing, your capital is at risk. The value of your investments can go down as well as up, and you may get back less than your original investment. This article is not personal advice.

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So what’s the deal with Trump?

Donald J. Trump has re-entered the White House, the first president to win a non-consecutive term since Grover Cleveland in 1892 (remember that one for your next pub quiz). 
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After emerging victorious in November 2024, the result saw a wave of optimism in the stock market, with promises of lower taxes, deregulation, and a crypto-friendly outlook that sent indices to new highs. 
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Nothing reflected this better than the so-called MAGA 7— a group of stocks linked directly or indirectly to Trump. The price of their shares soared, and their market cap hit over $1 trillion.
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‍What have we seen in the markets since inauguration? 

Well, not that much really. Those hoping for a second Trump stock rally had their hopes dashed by geopolitical factors and general uncertainty around the policies of the new regime.

It’s still too early to say, but ‘cautious optimism’ seems to be the order of the day as we continue to learn more about what the next four years will look like.  

Key takeaways:

• Since Donald Trump’s second inauguration on 20 January 2025, major U.S. stock indices have shown mixed performance;
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• The S&P 500 and Nasdaq Composite posted gains, reflecting investor’s optimism towards Trump’s economic policies, but have now trended down on uncertainty around AI; 
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• The U.S. is weighing up new tariffs on Chinese goods to protect domestic industries, along with potential oil tariffs on Mexico and Canada. This has brought uncertainty to global markets.*

 
Chip does not provide financial or tax advice and this is not a personal recommendation to invest in any fund. * Accurate as of 31 January 2025. Some initial Trump tariffs came into effect on 1 February 2025 but some countries have received a month's reprieve.

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‍DeepSeek explained: Just the fact

‍Before last week, you’d probably never heard of the Chinese artificial intelligence app DeepSeek, but on 27 January, it was the talk of the town, in a story that entered the mainstream news cycle.
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‍What’s happened?‍

The latest release of the Chinese AI model ‘DeepSeek’ sent shockwaves through the market as it offered a seemingly comparable service at a fraction of the production cost of its U.S. rivals.

This triggered a big tech selloff, with chip making giant Nvidia—seen as the gold standard in chip-making for AI models—losing nearly $600 billion in market value in a single day.
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‍Why did it rock the market?

‍AI is poised to be the backbone of future industries, from self-driving cars to healthcare, with U.S. tech firms investing heavily in its development.

If DeepSeek are able to offer a cost-effective, scalable AI model, this raises concerns that giants like Nvidia, Microsoft, and Google, who operate at much higher cost, could lose their competitive edge.

However, while these developments have unsettled investors, questions quickly emerged about DeepSeek’s true robustness and efficiency. The story is still unfolding… 

‍The bigger picture:

‍The big takeaway is that events like this highlight the need for diversification. If investors' portfolios are too heavily weighted toward Big Tech and AI-related stocks, it could be time to diversify into other sectors. See our full range of funds to see if you need to give your portfolio a quick health check.

When you’re thinking about investing, remember that your decisions should be based on research, risk profile, and your broader financial goals. Investing little and often long-term can be a much better option than attempting to ‘time the market’ and smooth out any volatility. 

Chip does not provide financial or tax advice and this is not a personal recommendation to invest in any fund.

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What’s new at Chip?

We’ve been busy making our investment platform even better! We’re excited to announce there’s now 11 new investment funds in your Chip app. We put these together after a lot of research, surveys, and interviews with Chip members to ensure you’re getting more of the funds you want to see.
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These include:

• A new range of popular global funds for more choice; Like the Vanguard FTSE Global All Cap and HSBC FTSE All-World Index;
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• New thematic funds for the latest trends; Like the Space Innovators ETF and Automation and Robotics ETF; 
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• The addition of a Physical Silver ETC to go along with Physical Gold to give you the option of another commodity.

Head to the app now to invest and for more about our new funds, we’ve written up a nice blog about it with all the information you need. That’s all for your monthly update, see you next month for all the latest investment updates that matter. 
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May your gains be plentiful, 
Stephen
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‍When investing, your capital is at risk. The value of your investments can go down as well as up, and you may get back less than your original investment. Chip does not provide financial or tax advice and this is not a personal recommendation to invest in any fund.

Sources: Insight and analysis from: [1]Reuters, [2]MorningStar [3]Stock Market Watch [4]Guardian [5]Money.usnews [6]Forbes. 31 January.

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