No, we’re not done talking about the ‘I’ word quite yet. Today we learned that the inflation situation has gone from bad to worse:

• The Consumer Price Index report for May jumped 4.2% from a year ago. That’s the fastest pace inflation has accelerated in three years.
• Energy prices were the culprit, rising 3.9% over the month. Gas alone is up over 40% since last year.
• With food and energy prices removed, core inflation rose a tamer 2.9% annually, in line with expectations.

Economists were expecting inflation to climb because of the Iran war, which has spiked oil prices 35%. And unless the Iran conflict de-escalates quickly, “The broader and more persistent inflationary pressures are likely to become,” explained EY-Parthenon Chief Economist Gregory Daco in a note today.

This complicates the picture for the Federal Reserve. Right now, traders are betting the central bank will leave rates unchanged. “For a Federal Reserve already concerned about inflation persistence, another firm inflation report will strengthen the case for a more explicit two-sided reaction function,” added Daco.

Complaining all the way to the checkout

Logically, you’d think that higher inflation would stop people from paying up for expensive stuff. And people certainly say they’re fed up: Recent surveys of consumer sentiment show that shoppers are increasingly wary of an economic downturn.

So why is it that as companies are raising prices, many shoppers are compliantly continuing to pay more? Research from Goldman Sachs shows that shoppers have become less price-sensitive over time as incomes have risen. Plus, the gloomiest consumers aren’t the ones companies depend on, since the well-off do most of the buying (by Moody’s estimate, the top 10% of earners account for nearly half of all US consumer spending).

It’s the K-shaped economy in action: Plenty of Americans feel the squeeze, but top earners still aren’t bargain hunting. The result? According to Goldman, corporate profits as a share of value-added have doubled, from 5% in the 1980s to more than 10% recently. —LB

🟢 What’s up

• Cracker Barrel gained 22.56% after beating earnings expectations and raising its full-year outlook for both revenue and EBITDA.
• Casey’s General Stores climbed 20.29% as strong fuel margins and pizza sales helped deliver better-than-expected quarterly results.
• DraftKings rose 4.35% after management said prediction markets are not cannibalizing its core business and highlighted the upcoming World Cup as a growth catalyst (more on that later).
• Robinhood Markets advanced 3.09% as platform assets climbed and the company received approval to underwrite IPOs.
• E.l.f. Beauty gained 4.4% as beauty and personal-care stocks rallied across the sector. 
• CAVA jumped 6.92% following a UBS upgrade that cited its long-term growth potential.

What’s down

• Super Micro Computer plummeted 27.98% on plans to raise $7 billion through equity offerings and equity-linked securities.
• Trucking stocks FedEx Freight and Old Dominion Freight Line dropped 6.96% and 5.14%, respectively, after Amazon expanded its freight shipping services to outside customers.
• BILL Holdings slid 4.86% following a downgrade from Truist Financial, which cited slowing growth and rising competition.
• Wolfspeed tumbled 10.99% after announcing a potential sale of 24 million shares by existing shareholders.
• Lazard slipped 12.52% despite reporting AUM of $284.8 billion in May, up from $275.4 billion a month earlier.

The heyday of betting on anything may be winding down, now that the Commodity Futures Trading Commission has proposed some ground rules for prediction markets.

The CFTC’s 267-page memo lays out which bets are kosher on platforms like Kalshi and Polymarket (game scores, Fed rate cuts, whether it’ll rain on July 4th), and, crucially, what’s not okay. Wagers on war, terrorism, and assassination are out for security reasons. So are bets where individuals have insider knowledge or could directly influence the results, such as a single baseball pitch, basketball foul, or player injury. To enforce regulations, the agency will review event contracts, force platforms to pull any that defy its guidelines, and refer cases to the DOJ.

Prediction markets are poised to explode into a $1 trillion industry by 2030. So far, the Trump administration has given them a long leash, and recent scandals show why regulators may want to shorten it:

• In April, a soldier involved in a raid on Nicolás Maduro was charged with using classified information to rake in over $400,000 on Polymarket from a wager related to the Venezuelan President’s capture.
• In May, a Google software engineer was charged with using company data to amass $1.2 million on Polymarket predicting that singer D4vd would be dubbed the most-searched person of 2025.
• Last July, two Cleveland Guardians pitchers were indicted for rigging pitches, a practice called “spot-fixing.”

Kalshi, meanwhile, isn’t waiting for rules to hit the books: It rolled out “risk scores” for manipulation-prone bets, employer disclosure rules, and whistleblower tools, claiming it’s already blocked 100+ shady trades this year. The platform also suspended and fined three political candidates who placed bets on their own elections; one admitted wagering $50 because he was “curious about how it worked.”

But don’t worry, if you aren’t Jesus and you don’t work for Rockstar Games, you can still bet on whether Jesus Christ will return before the release of Grand Theft Auto VI.—JD

The World Cup kicks off tomorrow. For the next month, billions of people will rearrange their sleep schedules, argue with referees on social media, and explain the offside rule to their confused American friends. FIFA, meanwhile, will be focused on a different scoreboard.

The organization expects this year’s tournament—an event it has modestly described as “104 Super Bowls in a month”—to generate roughly $13 billion in revenue; 70% more than the previous World Cup in 2022.

Here’s how the math is mathing:

• Sponsorship revenue is projected to jump more than 55% from 2022
• Ticket revenue is expected to more than triple to $3 billion
• The addition of 40 extra matches is expected to lift global TV revenue to $4.3 billion from $3.4 billion

One trophy, many winners

FIFA won’t be the only one cashing in. A whole roster of public companies is hoping the tournament shows up in their next earnings call.

Comcast holds the Spanish-language broadcasting rights, giving it access to one of the tournament’s most engaged audiences. Benchmark’s Matthew Harrigan remains bullish on the company, arguing World Cup viewership could add to improving broadband trends.

DraftKings and FanDuel owner Flutter Entertainment are also expected to win big off everyone’s losing bets. Macquarie estimates World Cup betting volume could exceed $50 billion globally, up from roughly $35 billion in 2022, helping lift operator earnings by 2% to 5%.

Anheuser-Busch InBev could see as much as a 25-basis-point lift to volume growth from the tournament, per JP Morgan, with additional upside if Brazil wins its first World Cup since 2002, thanks to the company’s controlling stake in Brazilian brewer Ambev.

The tournament should also be a boon for travel companies. Deutsche Bank highlighted DiamondRock Hospitality, Host Hotels, Park Hotels, and Ryman Hospitality as particularly well-positioned, while Airbnb, Uber, and Lyft could also benefit as millions of fans crisscross North America.

Finally, there’s the sponsors: Visa, Coca-Cola, McDonald’s, Bank of America, Home Depot, and others pony up for one of three tiers—FIFA Partners, World Cup Sponsors, and Regional Supporters—and pay anywhere from tens of millions to hundreds of millions of dollars to attach their name.

Whether that spending pays off remains to be seen. But either way, the race for the Golden Boot isn’t the only competition worth watching.—SY

• President Donald Trump said the US will resume striking Iran today, after peace negotiations stalled and a US helicopter was downed near the Strait of Hormuz.
• The Department of Justice is subpoenaing big banks—JPMorgan, Bank of America, and others—for information regarding whether the institutions “debanked” conservative customers.
• California’s billionaires are fleeing to this tax haven nearby.
• Rivian said it has started deliveries for its lower-cost, second-gen SUV. Investors hope this Tesla-esque offering will boost sales.
• This chart shows the stark difference between the white-collar job market and the rest of the labor market right now.

Earnings announcements: Adobe announces Q2 earnings.

Economic reports: The Bureau of Labor Statistics releases the May PPI report.

Everything else: The World Cup kicks off with the first group stage games.