Daily Update — June 16, 2025
Renewable Energy Paradox; Datacenter Slowdown; and S&P 500 Recovery
Today is Monday, June 16, 2025, and here’s your curated selection of Essential Intelligence on global markets from S&P Global. Subscribe to be notified of each new Daily Update.
Energy Transition & Sustainability
Natural gas’ renewable energy paradox
Natural gas is increasingly vital for supporting the integration of renewable energy in various Asian economies. However, the rapid growth of renewable capacity poses a challenge to gas-fired power generation in several markets. With Asia representing over 60% of the global population and about 52% of electric power demand, it is a central hub for economic growth and industrial development.
Forecasts indicate that by 2035, power demand in Asia will surge by over 40% due to rising living standards. Natural gas will be key in managing the intermittency of renewable sources and replacing coal and oil. S&P Global Commodity Insights estimates an increase in gas consumption in the power sector to 368 Bcm by 2035 from 280 Bcm in 2024, primarily driven by mainland China and Southeast Asia. Gas use is expected to slightly decline in Japan, South Korea and Taiwan.
Artificial Intelligence
Listen: Datacenter Slowdown?
Questions are being asked about whether datacenter build-outs are slowing. S&P Global Market Intelligence 451 Research analyst Dan Thompson returned to the “Next in Tech” podcast to explore the realities of the market with host Eric Hanselman. Some situations, including Microsoft’s hesitation on some datacenter projects, have fueled concerns that the heady pace of build-outs might slacken. The DeepSeek model’s debut with claims of lower training requirements unsettled tech markets in January. There have been layoffs. Are these signs of an AI bubble?
Market Dynamics
Bad breadth concerns rise as S&P 500 set to recover tariff-triggered losses
After hitting its lowest point in almost a year in April, the S&P 500 has rebounded significantly, recovering nearly all of its losses in just two months. The index, which fell 18.9% to its lowest point on April 8 following President Trump's tariff announcements, had surged over 20.5% by June 9, nearing its all-time high from Feb. 19.
However, this rally raises concerns about market breadth, as it is largely driven by the performance of a select group of mega-cap technology stocks, dubbed the Magnificent Seven. These stocks — NVIDIA, Tesla, Meta Platforms, Microsoft, Amazon, Alphabet and Apple — have shown an average increase of 31.7% since April 8, despite having dropped an average of 26.8% earlier in the year. This concentration in tech stocks may undermine the sustainability of the overall market rally.
In case you missed it
- Southeast Asia’s populations are getting older, and its economies are not growing fast enough for the public sector to pay for increased pensions and public healthcare needs. Governments will continue to rely on families and the private sector to fill growing gaps in elder care.
- China and the US have made significant advancements in stabilizing their economic relationship, after two days of high-level talks in London culminated in a "principled framework" aimed at implementing prior agreements.
- Overall US investor sentiment leaned toward risk aversion for the fifth consecutive month, even as caution in equity markets diminished for a third straight month.
Upcoming events
- The AI Arms Race: Who Will Win? | June 17 (Webinar)
- Sustainability Nexus: Scaling Clean Energy Investments | June 18 (Webinar)
- The New Tariff Reality: Preparing for Disruption, Defending Your Margins | June 18 (Webinar)
- Building Climate Resilience: A Bottom-Up Approach to Physical Risk Assessment at the Asset | June 19 (In-person: Paris)