Employer national insurance (NI) contributions for all under-25s should be cut to boost job opportunities for young people, a group of MPs has urged.

The Work and Pensions Committee said it has heard “overwhelming evidence” that rising employment costs, including from employer NI, were reducing training and job vacancies, particularly for young people.

Over one million 16 to 24-year-olds are not in education, employment, or training (known as Neet). The committee said an employer NI cut for all under-25s would tackle this “travesty”.

The government said it was determined to create opportunities for young people, reform education and support people to stay and progress in work.

The previous government, which introduced NI increases for businesses last year, said at the time they were making the right choice to fund public services.

In its 2024 election manifesto, Labour said it would not raise taxes on “working people”, specifically income tax, NI, or VAT.

Critics have argued that the employer NI raise ultimately affects workers by limiting job opportunities.

Some employers have argued it has become more difficult to hire young people due to higher minimum wages and increased taxes, such as employer National Insurance contributions, although the Institute for Fiscal Studies (IFS) found there is no clear evidence, external that higher minimum wages have been a “major driver” of young people becoming Neets.

In April last year, the rate that employers pay in NI contributions rose from 13.8% to 15% and the threshold at which they start paying the tax on each employee’s salary fell from £9,100 per year to £5,000.

However, the employment allowance, which is amount employers can claim back from their NI bill, rose from £5,000 to £10,500.

The committee said employer NI had hit the retail and hospitality sector, which it said tends to employ young people, particularly hard.

It added that there was a “gap” between the government’s employment strategy for under-21s and their strategy for under-25s.

The committee said: “While businesses pay no employer NI contributions for employees under 21 or for apprentices under 25 – unless their salary is above the £50,270 threshold – they pay 15% on annual earnings above £5,000 for non-apprentices aged 21-24, undermining government schemes to improve employment rates in this age group.”

Shares of Advanced Micro Devices surged 8.04%, or $40.48, to $544.05 Tuesday afternoon, as investors positioned ahead of the company’s closely watched Advancing AI 2026 event this week and continued to react to news of an expanded partnership with Microsoft Azure.

Tuesday’s rally builds on gains from Monday, when AMD closed 1.58% higher following the Microsoft announcement, before adding another 3.56% in premarket trading Tuesday. The stock’s advance also coincides with a broader recovery across U.S. semiconductor stocks, with the Philadelphia Semiconductor Index rising more than 3% as major chip names including Intel, Texas Instruments and Taiwan Semiconductor Manufacturing Co. all posted gains.

A deepened partnership with Microsoft

Much of Tuesday’s momentum traces back to AMD’s expanded collaboration with Microsoft, announced in recent days. According to the official announcement, AMD will broaden its GPU, CPU, networking and software services supporting Microsoft’s infrastructure, with Microsoft specifically deploying the AMD Helios Rackscale Solution across its Azure cloud platform. The partnership also includes plans for Azure to add two new AMD EPYC CPU-powered virtual machine series and expand its deployment of AMD’s Pensando data processing units to support Azure’s broader networking services.

AMD CEO Lisa Su characterized the significance of the expanded partnership in a statement accompanying the announcement. “AMD and Microsoft have spent years building high-performance infrastructure together, and today we’re extending that partnership across the full stack of AMD AI,” Su said.

A critical week ahead with Advancing AI 2026

Tuesday’s gains also reflect growing investor anticipation ahead of AMD’s Advancing AI 2026 event, scheduled for July 22 and 23, which the company has positioned as one of its most significant catalysts of the year. The event is expected to feature the formal launch of AMD’s next-generation Zen 6 Venice EPYC server processors, manufactured on TSMC’s advanced 2-nanometer process, along with an updated roadmap for the company’s MI455X AI accelerator chip.

Meta Platforms has already adopted AMD’s Helios server platform and is expected to begin deploying Helios servers during the second half of 2026, according to earlier reporting from AMD’s management. On the company’s May earnings call, AMD executives noted strong customer demand for the Helios platform and indicated they would share additional details during the July event. The Helios rack-scale system, powered by AMD’s MI455X GPU, features 432 gigabytes of high-bandwidth memory, notably higher than the 288 gigabytes offered by Nvidia’s competing Vera Rubin chip system.

Recovering from a sharp pullback

Tuesday’s rebound follows a difficult stretch for AMD shares, which had fallen roughly 17% from their June 30 high of $584.73, closing at $486.27 on Friday amid a broader sector-wide selloff rather than any company-specific setback. Analysts tracking the stock noted that AMD had reported no disappointing quarterly results, lost no major customers, and faced no significant product delays during that decline, attributing the pullback instead to broader concerns about elevated valuations across the semiconductor sector following a wave of AI-related volatility.

Despite the pullback, AMD’s shares remained up 131% for the first half of 2026 alone, according to earlier reporting, before the stock’s momentum weakened over the subsequent month amid the broader chip sector selloff that has affected multiple semiconductor names in recent weeks.

Additional catalysts supporting the rally

Beyond the Microsoft partnership and the upcoming Advancing AI event, AMD’s stock has also been supported by recent supply chain reports suggesting the company has secured additional high-bandwidth memory capacity for its next-generation AI accelerators, according to TradingKey. Positive early feedback from major cloud service providers integrating AMD’s newest Zen-based server processors into their infrastructure has further bolstered investor sentiment, with early performance benchmarks pointing to meaningful improvements in power efficiency and compute density.

Wall Street remains broadly bullish

Despite recent volatility, Wall Street analysts have largely maintained an optimistic outlook on AMD’s prospects. Goldman Sachs analyst James Schneider maintained a Buy rating on the stock earlier this month, raising his price target from $450 to $640, citing surging demand for high-performance CPUs driven by the industry’s broader shift toward agentic AI workloads. Schneider’s reasoning centers on the distinction between AI model training, which remains heavily GPU-intensive, and AI inference in real-world applications, which typically requires a combination of both CPUs and GPUs, a dynamic that favors AMD’s diversified chip portfolio.

Wells Fargo analysts similarly raised their price target on AMD from $505 to $615 while maintaining an Overweight rating, according to earlier reporting. Analysts currently project AMD’s second-quarter 2026 earnings per share to climb 400% year-over-year to $1.35, with full-year fiscal 2026 earnings expected to surge 88.1% to $6.15 per share, followed by projected growth of 76.1% to $10.83 per share in fiscal 2027.

With AMD’s Advancing AI 2026 event beginning Wednesday and the company’s second-quarter earnings report scheduled for August 4, investors are likely to closely watch for additional customer commitments tied to the Helios platform, along with further details on the Zen 6 Venice CPU launch and updated MI455X accelerator roadmap. Given the stock’s recent recovery from its pullback and the significant catalysts on the immediate horizon, AMD is positioned to remain one of the more closely watched names within the broader AI infrastructure trade through the remainder of the summer, even as ongoing geopolitical tensions tied to the conflict between the United States and Iran continue to introduce broader uncertainty around global supply chains and semiconductor markets more generally.

Goldman Sachs expects Brent crude to average $80 per barrel in the fourth quarter and $75 next year, assuming tensions in the Middle East ease. However, the risks to its forecasts remain “tilted to the upside” due to potential disruptions to shipping through the Strait of Hormuz and possibly the Red Sea, analysts said.

Global energy markets have faced renewed volatility this month, with Brent climbing back above $91 per barrel amid fresh fighting between the U.S. and Iran and a threat by Iran-backed Houthi rebels in Yemen to blockade shipments from Saudi Arabia. Red Sea routes have played a key role in enabling Persian Gulf crude cargoes affected by disruptions to reach buyers.

Also read: Relieved that crude has finally fallen? The real warning signs just began flashing elsewhere

Goldman Sachs said lower global inventories in the second quarter have increased the oil market’s vulnerability to supply shocks. However, weaker Chinese imports and greater demand elasticity could limit the potential for further price gains.

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Oil prices edged lower on Tuesday as markets weighed reports of renewed diplomatic efforts between the U.S. and Iran, including a proposed 10-day ceasefire, against continued military exchanges and a threat by Yemen’s Houthis to impose a naval blockade on Saudi Arabia.
A senior Iranian official told Reuters that Tehran had received a 10-day ceasefire proposal from mediators. The initiative aims to preserve the interim agreement signed on June 17 and create a path toward a lasting deal to end the conflict that began on February 28 following U.S.-Israeli attacks on Iran.
The diplomatic push followed another night of U.S. strikes on Iranian cities and retaliatory attacks by Iran’s Revolutionary Guards on U.S. military assets across the region. U.S. Central Command later said on Monday that it had launched another round of strikes on Iran.
The U.S. carried out its 10th consecutive day of strikes after President Donald Trump vowed that Iran “will pay” for the killing of American soldiers. Iran responded with attacks on Kuwait.

The conflict began on February 28, when the U.S. and Israel launched attacks on Iran. Tehran retaliated with strikes on Israel and Gulf states that host U.S. military bases. U.S.-Israeli attacks on Iran, along with Israeli strikes on Lebanon during the conflict, have killed thousands of people and displaced millions.

Also read:Oil is crude once again! Is $95 the new normal and what it means for Indian investors?

Over the past week, Trump has also threatened to widen the scope of U.S. strikes in Iran to include energy facilities and bridges.

The 1949 Geneva Conventions, which set rules for humanitarian conduct during war, prohibit attacks on sites considered essential to civilian life. Following Trump’s earlier threats to target such infrastructure, international law experts in the U.S. said earlier this year that such attacks could potentially constitute war crimes.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)