1. Tech Leaders Pledge Up to $500 Billion in AI Investment in U.S. — the joint venture, known as Stargate, is led by the ChatGPT maker OpenAI and the global tech investor SoftBank Group. It will build data centers for OpenAI. The database company Oracle ORCL 6.75%increase; green up pointing triangle and MGX, an investor backed by the United Arab Emirates, are also equity partners in the venture. The companies are committing $100 billion to the venture and plan to invest up to $500 billion over the next four years. The plans, key elements of which remain vague, were announced Tuesday at a White House ceremony with President Trump. The $100 billion sum includes projects that the companies already announced and initiated under the Biden administration, people familiar with the matter said.
2. Trump’s War on DEI Freezes Diversity Work Across Federal Government — President Trump’s plan to unravel diversity, equity and inclusion efforts began taking shape on Wednesday with an order closing such programs within federal agencies and placing all staff working on those programs on paid leave. The Agriculture Department, the Treasury Department and the Labor Department had removed some webpages on diversity by Wednesday morning. The Federal Communications Commission rescinded an action plan promoting DEI and shut down the agency’s advisory group, among other steps. Elsewhere, meetings on those issues were canceled quietly, and federal employees were uncertain about whether internal affinity groups would continue. Paid leave for employees who work on DEI programs was to take effect by 5 p.m. Wednesday.
3. Trump Says Reducing Energy Prices Will Allow for Lower Interest Rates — Trump told reporters he would like to see rates “come down a lot” and implied that steps to keep a lid on price pressures were an important precursor to lower interest rates. In his first term, inflation wasn’t a major problem, and Trump frequently called for the Fed to lower interest rates. The Federal Reserve cut its benchmark short-term interest rate three times between September and December by a full percentage point. But longer-term interest rates rose during that period, partly reflecting expectations of stronger growth.
The episode underscored how the Fed controls short-term interest rates but market forces influence long-term interest rates, which are closely tied to rates on mortgages, auto loans and business debt. Long-term rates can rise even if the Fed is cutting rates if investors anticipate fewer Fed rate cuts, if they are more concerned about inflation, or if they are more optimistic about future economic activity.
4. U.S. Homes Sales in 2024 Fell to Lowest Level in Nearly 30 Years — High costs related to homeownership sapped sales again. The average rate for a 30-year fixed mortgage has hovered between 6% and 8% since late 2022, making it prohibitively expensive for many Americans to buy homes at current prices, which hit record highs last year. Rising home insurance and property tax costs are also adding to homeowners’ expenses. The Federal Reserve cut short-term rates three times last year, but mortgage rates have risen in recent months. Last week, mortgage rates topped 7%, an important psychological threshold for buyers and sellers, though rates declined slightly this week, according to Freddie Mac. The unaffordable housing market has frustrated buyers and sellers, forcing many to delay or cancel plans to move, and prompted both presidential candidates in 2024 to pledge to help lower housing costs. The slow pace of sales has also hurt mortgage lenders, real-estate brokerages and home-goods stores.

The week ahead — Economic data from Econoday.com:

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