Today's News You Need2Know

Companies mentioned in today’s newsletter

$SPX ( ▲ 0.15% )   $GOOGL ( ▼ 0.85% )   $TM ( ▼ 2.13% )   $TSLA ( ▼ 3.38% )   $DIS ( ▼ 0.24% )   $UPS ( ▼ 1.48% )   $AMZN ( ▼ 1.59% )  

U.S. economy shrinks 0.3%

As George from “Seinfeld” would say, there’s nothing more terrifying than shrinkage.

So take cover, Costanza! The U.S. economy contracted by 0.3% in the first quarter of the year, marking its first decline in three years.

Analysts attribute the downturn to a giant squid gumming up the works of the global economy President Donald Trump’s trade policies (sorry, I’m just so bored of this particular thread of news, aren’t you?), which triggered a surge in imports as businesses scrambled to avoid impending tariffs. The surge — imports grew at a remarkable 41% — had a significant negative impact on economic growth, shaving five percentage points off the GDP. Additionally, consumer spending slowed from 4% growth in late 2024 to just 1.8% growth early in the year, and federal government spending fell sharply by 5.1%.

The stock market reflected the unease created by these economic challenges, with major indices like the S&P 500 $SPX ( ▲ 0.15% ) experiencing declines yesterday on the news of the numbers. Inflation also remains a pressing concern. The Federal Reserve’s preferred metric for inflation, the PCE price index, rose at an annual rate of 3.6% — far above the Fed’s target of 2%.

While the surge in imports is expected to ease in the second quarter, economists warn that Trump’s erratic trade policies and the substantial tariffs on China could dampen long-term growth. Stagflation — a giant stag, gumming up the the works of the global economy stagnant growth paired with rising inflation — is a growing concern, leaving the Federal Reserve in a precarious position as it balances interest rates and growth stability.

Self-driving tech coming to your car soon

Good news! Pretty soon you’ll be able to take a nap while you’re driving a Corolla — but on purpose, not because you’re exhausted from working 18-hour days to pay for your family’s basic needs. Even better, right?

In a groundbreaking move, Alphabet-owned $GOOGL ( ▼ 0.85% ) Waymo and Toyota $TM ( ▼ 2.13% ) have struck a partnership aimed at integrating autonomous driving technology into personal vehicles. It seeks to leverage Waymo's robotaxi technology alongside Toyota's vehicle expertise to develop next-generation driver assistance and autonomous features for individually-owned cars.

This isn't Waymo's first foray into collaborative ventures, but it represents a significant evolution as traditional automakers increasingly shift focus towards developing autonomous systems for personal use, rather than solely concentrating on ride-hailing fleets.

The announcement arrives amid a surge in Waymo’s commercial operations, which have now expanded to cover key cities like San Francisco, Los Angeles, Phoenix, and Austin, serving 250,000 paid rides per week.

Waymo’s plans with Toyota come when competitors like Tesla $TSLA ( ▼ 3.38% ) are ramping up efforts in autonomous technology. While Tesla CEO Elon Musk recently criticized the cost-efficiency of Waymo’s robotaxis, few takes him seriously when he talks about “cost-efficiency” since his U.S. operation focused on it accompanied a 6% rise in government spending. Tesla is also set to launch its own fully autonomous rides in Austin with its Model Y vehicles equipped with upgraded self-driving systems pretty soon.

Would you like a self-driving car? Let us know in today’s poll!