Google’s renewed push into the smart glasses market through new partnerships with Warby Parker and luxury fashion group Kering will also benefit EssilorLuxottica- the company behind Ray-Ban smart glasses made with Meta- and accelerate the broad adoption of smart glasses, analysts say.

Both Warby Parker and Kering, in separate announcements on Tuesday, said they are working with Google to develop glasses embedded with artificial intelligence, using Android XR, a version of the Android operating system tailored for headsets and glasses.

The collaboration with Warby Parker is particularly significant as Google is investing up to $75 million in the company’s product development and commercialization costs.

The companies plan to unveil their first product line after 2025, with a series of offerings expected to follow.

The two partnerships signal Google’s broader strategy to re-enter a market it helped pioneer, but exited early.

Google Glass was once at the forefront of wearable innovation but was eventually shelved due to privacy concerns and tepid consumer interest.

Loop Capital analyst Anthony Chukumba described the Google-Warby partnership as a “dream scenario” and predicted rapid expansion of the smart glasses category.

“We expect smartglasses growth to be exponential over the next few years, particularly given the product is squarely at the intersection of wearable technology and AI,” he wrote.

Deal could accelerate adoption of smart glasses

Investor response to the announcements was swift.

Warby Parker shares closed up 16% at $20.34 on Tuesday, buoyed by optimism that the collaboration could mark a turning point for the company’s growth.

Shares of Innovative Eyewear, a smaller smart glasses maker, rose 12% to $3.02.

Meanwhile, Vuzix, another competitor in the space, fell 3% to $2.46.

Jefferies analysts said Google’s partnership with both Warby Parker and Kering to develop artificial intelligence-powered glasses could help accelerate the adoption of smart glasses.

They said that Warby Parker is less influential than EssilorLuxottica, the eyewear which with its partner Meta, leads the smartglasses category.

“However, seeing established companies work on smart glasses suggests they might become mainstream soon,” they add.

Deal validates the success of EssilorLuxottica and Meta’s Ray-Ban smart glasses

The renewed interest in smart glasses comes as demand for AI-integrated wearables appears to be rising.

Meta CEO Mark Zuckerberg recently reported a surge in demand for Ray-Ban smart glasses, with 2 million units sold by the end of 2024.

A new model is expected to launch later this year.

Equita Sim analyst Domenico Ghilotti said EssilorLuxottica should benefit from Google’s partnership as the move validates the success of Meta and EssilorLuxottica’s offering and underlines the growing importance of smart eyewear as a channel for deploying consumer AI.

“The deal signals the expected reaction of players like Google to the commercial success of Ray-Ban smart glasses, which EssilorLuxottica develops with Meta Platforms,” Ghilotti says.

It marks “a confirmation of the growing relevance of this product for the penetration of AI solutions,” the analyst adds.

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Vehicles made in Mexico and sent to the US will pay a 15% tax rather than the original 25% previously expected, Mexico’s Economy Minister Marcelo Ebrard confirmed Tuesday.

According to Reuters, citing Ebrard, the competing tariff rates vary only because Mexican exports that comply with the US-Mexico-Canada Agreement (USMCA) get preferential discounts.

This discount gives Mexican automakers a big edge over their counterparts in countries that ship automobiles into the United States.

Ebrard, speaking at a public event, praised the tariff rate but noted that the benefits enshrined in the trade deal are “what matter.”

He said it “is a very big advantage compared to other countries that sell to the United States,” although he acknowledged Mexico would like to see zero tariffs.

USMCA offers preferential treatment to exports and their granting of tariff cuts to lessen the burden of US import taxes on auto exports.

US tariff policy and its impact on North American trade

The tariff dispute between the United States and its trading partners heated up in March 2025, when President Donald Trump’s government imposed a new 25% tariff on all cars not manufactured in the United States.

This tariff went into effect in April 2025, raising concerns among automakers in Mexico and Canada, which rely significantly on US exports for their automotive industries.

However, under the rules of the USMCA, which replaced the North American Free Trade Agreement (NAFTA), automakers from Mexico and Canada are eligible for lower tariffs.

The preferred tariff reduction method entails confirming the percentage of US-made components used in each vehicle.

This method allows automakers to reduce the tax from 25% to a lower rate, based on the percentage of US content in the car.

According to Ebrard, if authorised by the US Department of Commerce, this certification ensures that the 25% tariff applies exclusively to the non-US portion of the vehicle, while the US-made parts remain tariff-free.

Challenges in the certification process

The steps for the certification are far from simple. Under the deal, businesses requesting cuts to tariffs will have to provide extensive declarations detailing the percentage of US content in their vehicles.

The United States’ authorities will look closely at the process to comply with all the requirements. If US Customs finds that companies misreported the amount of US content in their declarations, they would end up being charged retroactively with tariffs, with the full 25 per cent rate imposed on their exports.

The certification only lasts for six months, and automakers will need to regularly prove that their vehicles continue to meet the certification criteria to enjoy the reduced tariff benefits.

Officials in Mexico have been working closely with automakers to maximise the amount of qualifying tariff reductions automakers can access under the USMCA.

Implications for the Mexican automotive sector

Mexico is a major player in the automobile sector, being among the top car exporters to the United States.

The country’s auto manufacturing sector is an important part of its economy, with several foreign automakers opening factories in Mexico to take advantage of cheaper labour costs and advantageous trade conditions.

The favourable tariff reductions are a relief for Mexican automakers, who had dreaded the impact of the Trump administration’s broad tariff on non-US-made vehicles.

To avoid disruptions in their supply networks and trade links, automakers pressed the US government to moderate its tariff approach.

The 15% tax, while still greater than prior rates, is a more bearable burden for producers than the full 25% duty that would have been imposed without the special concessions.

Looking ahead: Trade relations and industry adaptation

Tariffs are not the end of the story, leaving the future of North American trade ties uncertain. The USMCA is being negotiated by Mexico, Canada, and the US, with a focus on balancing economic and trade policy objectives.

The automobile sector, which accounts for a significant portion of the region’s industrial and economic production, is likely to remain a popular topic in debates.

Mexican automakers will, for now, operate under the USMCA umbrella to have access to its tariff reliefs during the interim.

The 15% tariff gives a crucial buffer as the industry adjusts to the new trade reality and reduces the impact of the US import tax policy.

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OpenAI will acquire io, the secretive artificial intelligence hardware startup co-founded by former Apple design chief Jony Ive, in a landmark all-stock transaction valued at nearly $6.5 billion.

The move is OpenAI’s most significant acquisition to date and signals a determined push into developing physical consumer devices powered by AI.

The purchase gives OpenAI access not only to io’s team of around 55 engineers and designers but also to the creative vision of Ive, the British-born designer behind Apple’s most iconic products including the iPhone, iPod, and MacBook Air.

The acquisition also formalises a relationship that has been in the making for nearly two years, as Ive and OpenAI CEO Sam Altman have quietly explored new device ideas together.

“I have a growing sense that everything I’ve learned over the last 30 years has led me to this place and to this moment,” Ive said in a joint interview with Altman.

It’s a relationship and a way of working together that I think is going to yield products and products and products.

OpenAI-io combine to release first hardware product in 2026

OpenAI’s acquisition includes a prior $1.5 billion investment stake in io made through its startup fund, along with a fresh $5 billion equity deal to absorb the company.

The team, now under OpenAI’s umbrella, will focus on building what Altman and Ive describe as “a family of devices” for the age of artificial general intelligence.

The duo did not share specifics about the hardware under development but indicated that the first product would not simply be an iteration of the smartphone or laptop, but an entirely new computing form factor designed to complement AI’s growing capabilities.

“People have an appetite for something new,” Ive said, hinting at user fatigue with current devices.

Altman added, “AI is such a big leap forward in terms of what people can do that it needs a new kind of computing form factor to get the maximum potential out of it.”

The first device from the collaboration is slated for release in 2026.

Who is Jony Ive?

Once described by Steve Jobs as his “spiritual partner”, Jony Ive’s return to the heart of consumer technology marks a significant comeback for one of the most influential designers of the modern era.

The British-born designer spent decades at Apple, where he worked closely with Steve Jobs to shape products that would define a generation, including the iPhone, iPod, iPad and Apple Watch.

Ive left Apple in 2019 after a storied tenure, having played a central role in establishing the visual and tactile language of today’s smartphones and personal devices.

At the time of his departure, Apple CEO Tim Cook suggested that Ive and the company would continue to collaborate, but no joint products ever materialized.

After leaving Apple, Ive founded the design firm LoveFrom, a creative collective composed of former Apple colleagues and longtime collaborators.

In 2023, he co-founded the startup io with Apple veterans Scott Cannon, Evans Hankey, and Tang Tan — each with deep experience in the company’s hardware ecosystem.

Acquisition brings ex-Apple hardware veterans to OpenAI

The acquisition also brings into OpenAI’s fold a collection of ex-Apple hardware veterans who followed Ive after his departure from the tech giant in 2019.

Among them are Scott Cannon, co-creator of the Mailbox app; Evans Hankey, Ive’s successor at Apple; and Tang Tan, who led iPhone and Apple Watch product design until 2024.

At io, the team had been developing devices suited for a future defined by artificial general intelligence—where machines achieve human-like cognitive abilities.

That mission now becomes part of OpenAI’s strategy as it seeks to embed intelligence not just in software but across the physical world.

The hardware ambitions are supported by other investors including Laurene Powell Jobs’ Emerson Collective, Thrive Capital, Maverick Capital, and SV Angel.

OpenAI confirmed that Altman holds no personal equity in io.

Apple shares fall amid concerns over AI leadership

News of the acquisition sent Apple shares down as much as 2.3% on Wednesday, as the market absorbed the implications of its former star designer now leading the charge at one of its AI rivals.

Apple has been seen as lagging behind in artificial intelligence, with its recently introduced AI platform partly dependent on OpenAI’s ChatGPT.

Analysts say the move could accelerate Apple’s perceived decline in AI leadership and product innovation.

“Jobs would be damn proud,” Altman said of the new venture, praising Ive’s creative legacy and calling their collaboration a “rare opportunity.”

Though the move poses potential competition for Apple, Altman and Ive were careful to note that their project does not aim to replace the smartphone.

“In the same way that the smartphone didn’t make the laptop go away, I don’t think our first thing is going to make the smartphone go away,” Altman said.

Building AI’s physical future

OpenAI’s push into consumer hardware arrives as competition in AI intensifies.

The company, currently valued at $300 billion, is racing to keep pace with rivals including Google, Anthropic, and Elon Musk’s xAI.

All are investing aggressively and rapidly launching new AI models and features.

To support its expansion, OpenAI has bolstered its hardware and robotics expertise.

In November, it hired Caitlin “CK” Kalinowski, the former head of Meta’s Orion augmented reality glasses project, to lead its consumer hardware and robotics efforts.

Kalinowski said the goal was to “unlock AI’s benefits for humanity” through physical products.

In a separate effort, OpenAI also invested in San Francisco-based robotics startup Physical Intelligence, which raised $400 million at a $2.4 billion valuation.

That company is working to integrate general-purpose AI into the physical world through robots powered by large-scale algorithms.

Amazon founder Jeff Bezos is also an investor in the startup.

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JPMorgan Chase & Co. CEO Jamie Dimon has voiced significant concerns about the US economy, stating he cannot dismiss the possibility of stagflation as the nation grapples with formidable risks stemming from geopolitical instability, persistent budget deficits, and mounting price pressures.

He also endorsed the Federal Reserve’s current patient approach to monetary policy.

“I don’t agree that we’re in a sweet spot,” Dimon declared in a Bloomberg Television interview conducted at the lender’s Global China Summit in Shanghai.

He elaborated on the multifaceted threats, highlighting “huge deficits, inflationary factors, and geopolitical risk.”

In this context, Dimon asserted that the US Federal Reserve is “doing the right thing to wait and see before they decide” on future interest rate moves.

His comments come as Fed officials have maintained steady interest rates throughout the year, navigating a landscape characterized by a resilient economic backdrop juxtaposed with uncertainty over potential government policy shifts—such as tariffs—and their cascading effects on the economy.

Earlier this month, policymakers acknowledged an increased risk of simultaneously confronting both elevated inflation and rising unemployment, the hallmarks of stagflation.

A significant source of this uncertainty is the ongoing trade dynamic between the US and China.

While the two economic giants agreed earlier this month to a sharp reduction in tariffs for a 90-day period to negotiate a new trade agreement, the path forward is fraught with challenges.

Analysts and investors widely anticipate that US President Donald Trump’s tariffs on Chinese goods will likely remain at a level sufficient to severely curtail Chinese exports even after the 90-day truce concludes.

Dimon expressed a desire for continued dialogue: “I don’t think the American government wants to leave China,” he said.

“I hope they have a second round, third round or fourth round and hopefully it will end up in a good place.”

Policy uncertainty stifles business activity

President Trump’s often unpredictable tariff announcements and his administration’s efforts to shrink or dismantle government agencies have fueled widespread concerns about international trade, inflation, unemployment, and the potential for a recession.

Bank executives have noted that this climate of uncertainty is prompting companies to pause expansion plans, including lucrative mergers and acquisitions that are a key business for Wall Street dealmakers.

Reflecting the gravity of these global shifts, JPMorgan, the largest US bank, launched its “Center for Geopolitics” this week.

This new unit will provide research on critical geopolitical issues, including Russia and Ukraine, the Middle East, and the trend of global rearmament.

The unit “is both for us, and it’s also to educate clients,” Dimon explained.

Clients ask us all the time, what should we do about this country. How do you look at risk?

The impact of policy uncertainty on client activity is palpable.

JPMorgan, among other financial institutions, has indicated that clients may be adopting a wait-and-see approach, preferring to remain on the sidelines.

Troy Rohrbaugh, co-CEO of JPMorgan’s commercial and investment bank, stated earlier this week that the bank’s investment banking fees could potentially fall by a percentage in the mid-teens compared to a year ago—a more significant decline than analysts had predicted.

Fiscal challenges and dollar dynamics

Dimon also underscored the pressing need for the US to address its fiscal imbalances, stating the country has to “attack the deficit problems.”

He acknowledged the rationale behind investors potentially reducing their holdings of US dollar assets amidst these concerns.

“I don’t worry about short-term fluctuations in the dollar, but I do understand people might be reducing dollar assets,” he remarked.

These concerns are amplified by ongoing legislative efforts.

On Wednesday night, House Republican leaders released a revised version of President Trump’s extensive tax and spending bill.

The new draft includes a higher limit on the deduction for state and local taxes (SALT) and other modifications, aimed at winning over dissenting factions within the GOP to secure support for the legislation.

The US Treasury market has also shown signs of stress.

On Wednesday, Treasuries extended their recent selloff, with longer-term securities bearing the brunt of the decline.

An auction of 20-year debt received a relatively tepid reception from investors.

At one point, the selloff pushed the yield on the 30-year bond up by as much as 13 basis points to nearly 5.10%, its highest level since 2023.

Treasury yields were little changed in Asian trading on Thursday, indicating a tentative stabilization after the recent volatility.

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Emerging market stocks are once again at the center of investor interest, driven by growing disillusionment with US assets and a renewed search for growth abroad.

The shift comes as Moody’s recent downgrade of the US credit outlook and a spike in Treasury yields have shaken confidence in the strength of American financial markets.

Adding to the momentum, Bank of America declared emerging markets as “the next bull market” in a recent note to clients.

“Weaker US dollar, US bond yield top, China economic recovery… nothing will work better than emerging market stocks,” said Michael Hartnett, chief investment strategist at BofA Global Research.

On Monday, JPMorgan followed suit, upgrading its rating on emerging market equities from neutral to overweight, citing improving US-China relations and favourable valuations.

Performance gap between US and EM widens

The MSCI Emerging Markets Index, which tracks equities across 24 countries, has risen 8.55% year-to-date, sharply outpacing the US benchmark S&P 500’s modest 1% gain in the same period.

The divergence has become more pronounced since April 2, when former President Donald Trump unveiled a new wave of “reciprocal” tariffs.

While both US and global markets initially fell in the wake of the announcement, emerging market stocks staged a robust recovery.

Between April 9 and April 21, the MSCI Emerging Markets Index climbed 7%, while the S&P 500 declined by more than 5%.

Despite a mild rebound in US assets since, sentiment remains fragile.

The US 30-year Treasury yield surged past 5% on Monday, touching levels last seen in November 2023.

Meanwhile, US equities broke a six-day winning streak on Tuesday, as Moody’s downgrade reignited market concerns.

Why are EM equities poised to outperform?

The unfolding trend may signal the start of a broader rotation in global asset allocation.

Malcolm Dorson, head of the active investment team at Global X ETFs, believes emerging market equities are now in a unique position to outperform.

“After underperforming the S&P over the past decade, EM equities are uniquely positioned to outperform over the next cycle,” Dorson told CNBC.

He pointed to a confluence of factors including a softer US dollar, underweighted investor positioning, and strong growth prospects at discounted prices.

According to his data, US investors typically allocate only 3% to 5% of their portfolios to emerging markets, compared to the 10.5% weight of EM in the MSCI Global Index.

JPMorgan notes that EM stocks are trading at around 12 times forward earnings—significantly lower than their developed market counterparts.

India, Brazil, and Argentina attract spotlight

Among the emerging economies, India stands out as the strongest long-term growth story, underpinned by rising domestic demand.

Dorson also highlighted Argentina for its cheap valuations, and Brazil and Greece for recent sovereign credit upgrades that have improved their investment case.

“We could be at the start of a new rotation,” said Mohit Mirpuri, equity fund manager at SGMC Capital.

“After years of US outperformance, global investors are beginning to look elsewhere for diversification and long-term returns.”

Ola El-Shawarby, a portfolio manager at VanEck, added that previous EM rallies were often cut short by fleeting catalysts.

This time, she argues, the combination of undervaluation, improved fundamentals, and structural reforms could provide longer-lasting momentum.

“Emerging markets are firmly back in the conversation,” she said.

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