• Stocks: The tech selloff continued as investors fretted about what they’ll hear from Meta Platforms and Microsoft after the close. The Nasdaq 100 officially entered correction territory, ending the day over 10% below its June 2 high.
• Commodities: Oil prices surged on reports that Iran launched a surprise attack on US forces overnight, with President Trump promising this morning to give Iran a “beating.”
• Bonds: The 30-year Treasury yield climbed to its highest level since 2007 after the Fed decided to keep interest rates steady (more on that below).

Macro

Brendan Smialowski/Getty Images

You’re not the only one arguing with your siblings over whose turn it is to do the dishes—the Fed is having its own “family fight,” according to Fed Chair Kevin Warsh. The difference is the whole economy doesn’t hinge on who wins yours.

Today, the central bank voted to keep rates steady at their current rate of 3.5% to 3.75%. But the decision was far from unanimous: Three out of nine policymakers dissented with the Fed’s decision, while none recommended a rate cut. The split underscored how the central bank is slowly turning more and more aggressive in combating inflation, which has now run above its 2% target for five straight years.

The Fed decision wasn’t a huge surprise to investors, but wasn’t a foregone conclusion either. Inflation fell 0.4% in June, a milder reading than expected. But consumers are still feeling freaked out, and a flareup of geopolitical tensions in the Middle East is pushing oil prices higher once again.

Now, investors are looking to September. The big question is whether the Fed hawks will be able to get the rest of the committee on their side. Right now, traders are pricing in a 53% chance the Fed hikes rates 0.25% at its next meeting.

“September pricing has also moderated from fully priced to roughly 75%, however I would still characterize the outcome as a hawkish hold on balance: the statement was essentially unchanged, growth and inflation language remained firm, and the three dissents in favor of a hike underscore that a meaningful faction of the Committee remains concerned about inflation,” explained Janus Henderson portfolio manager Daniel Siluk in a note today.

It’s Warsh o’clock

Investors are still getting used to what a new Fed looks like under Kevin Warsh. This was the Trump-appointed chair’s second FOMC meeting and second press conference. Similar to his last appearance in June, Warsh kept his comments succinct and answers to reporters reserved, opting for a shorter statement.

“I asked for a good family fight, and I got one,” Warsh said at the press conference. “Most of our discussions were on the big questions that matter to the conduct of monetary policy.” (We’d sure hope so).

Warsh also made sure to hedge the Fed’s decision. “I wouldn’t characterize what we did as anything like a pause,” he said. “I would characterize what we did as a rigorous review of the economic situation.”

That’s sort of like when you tell your boss you didn’t just “make a PowerPoint”—you bravely explored business synergy.—LB

      

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Stocks

🟢 What’s up

• GE HealthCare gained 12.15% after beating earnings estimates and reaffirming its full-year outlook.
• Ford rose 2.14% after beating profit expectations and raising its 2026 earnings forecast, citing stronger pricing and operational improvements.
• Footwear company Rocky Brands surged 14.91% as quarterly profit more than tripled, helped by robust sales growth across multiple brands and tariff refunds.
• Seagate Technology jumped 2.29% as AI demand powered stronger-than-expected earnings and an upbeat forecast.
• Mondelez International advanced 4.02% after the Oreo and Sour Patch Kids maker topped Wall Street’s profit and margin expectations.

🔴 What’s down

• Procter & Gamble declined 1.87% following a quarterly revenue miss.
• Insurance company Lemonade fell 23.72% after a sharp increase in spending weighed on quarterly results.
• SK Hynix sank 2.6% after it missed Wall Street’s estimates for revenue, profit, and margins, fueling concerns across the memory-chip sector that pulled Micron 9.94% lower as well.
• Vertiv slipped 17.26% as a revenue miss overshadowed higher earnings and a raised full-year forecast.
• Hims & Hers Health dropped 14.73% as the FTC accused the company of sharing customers’ medical information with third-party advertisers.
• SoFi Technologies lost 9.02% after a narrow earnings beat failed to impress investors.

Stat of the day

Wanna bet on America's favorite pastime?

Morning Brew Inc.

Taylor Swift. The Odyssey. The Met. An entire library’s worth of books. Add up every dollar spent on all of it, and it still doesn’t come close to what we collectively funnel toward the most popular pastime of all: gambling.

Americans wagered $166 billion on sports last year, according to an analysis by Fortune. Meanwhile, movies drummed up just $8.87 billion at the box office, recorded music $11.5 billion, live music $18.51 billion, the museum industry $16.4 billion, and book publishers $14.6 billion. The grand total: around $70 billion, or less than half of what Americans spend on point spreads and parlays for the World Cup, Knicks playoffs, Super Bowl, and beyond.

Odds are, our collective gambling habit is actually worse than this eye-popping sum suggests, since it doesn’t include tribal casinos (which aren’t required to disclose their numbers) and prediction-market platforms like Kalshi and Polymarket (where Americans spend an estimated $50 to $100 billion). A more realistic total? Nearly $300 billion, which breaks down to about $1,000 per adult per year.

Granted, this number’s just the “handle,” or total bets placed. Americans win back about 90% of their money, so the real damage is around $100 for every $1,000 wagered. Still, roughly 95% of those losses hit just 5% of bettors—the heavy users who are single-handedly funding some stadium’s naming rights.

Gambling galore: America’s love of gambling has rubbed off on the stock market, which Warren Buffett recently called “a church with a casino attached.” Retail investors have ditched the old buy-and-hold strategies for more speculative bets on things like single-stock futures and leveraged ETFs.

“We’ve never had people in a more gambling mood than now,” Buffett told CNBC. “Since humans love to gamble so much, there’s more money in actually cultivating gamblers than there are cultivating investors.”

Just remember: At the end of the day, the house always wins.—JD

Investing

Morning Brew Inc.

It seems every day there’s a new headline fueling the AI selloff.

First, investors rotated out of hyperscalers as concerns mounted over ballooning AI spending. Then came China: CXMT’s blockbuster IPO stoked fears that it could chip away at US rivals like Micron, while reports of Chinese-built immersion deep-ultraviolet (DUV) lithography machines raised concerns that ASML’s long-held dominance in chipmaking equipment could come under threat.

The result: More than $1 trillion has been erased from the world’s biggest chip stocks since last week’s close, with Nvidia, SK Hynix, Samsung Electronics, Micron, AMD, and TSMC each shedding more than $100 billion in market value.

But big selloffs often bring big opportunities. Let’s take a look at where Wall Street says your money should go next.

What Wall Street is buying

UBS says this selloff shouldn’t come as much of a surprise after months of surging valuations. The bank still expects AI and its supporting infrastructure to remain a major market driver—but says the winners will increasingly come from outside today’s handful of mega-cap tech stocks.

Morgan Stanley agrees, noting that the recent pullback has created an especially attractive buying opportunity across the broader AI ecosystem in the following industries:

• AI infrastructure: Applied Digital, Bloom Energy, SpaceX, Digital Realty, and TeraWulf
• Compute ecosystem: Nvidia, TSMC, ASML, Micron, and Samsung Electronics
• Chinese AI leaders: Alibaba, Tencent, and Kingsoft
• Energy security: Axia, Schneider Electric, Siemens Energy, Vistra, Talen Energy, and X-Energy
• Hyperscalers: Amazon, Meta, Microsoft, Alibaba, and Tencent

HSBC is even more bullish. The bank says it’s now “maximum overweight” equities, arguing investors have become too pessimistic about earnings. In fact, it notes that Big Tech and US stocks are trading at lower valuations than they were before the Iran conflict, suggesting there’s still upside ahead.

MFS Investment Management’s Robert Almeida, on the other hand, makes a different argument. Rather than chasing every AI winner, the chief global investment strategist prefers to focus on companies that consistently generate strong returns on invested capital. That leads him toward “compounders” like industrials (Amphenol, Schneider Electric, Honeywell), software (Salesforce, MongoDB), life sciences (Danaher, Thermo Fisher), and consumer staples (Diageo, Pernod Ricard).

From UBS to Morgan Stanley to HSBC, the broader message is clear: This looks more like a correction than the end of the AI boom. Wall Street is still bullish, and maybe you should be too.—SY

      

News

• Look, up in the sky! It’s a bird! It’s a plane! It’s a pepperoni pizza strapped to a DoorDash drone!
• Jersey Mike’s is set to IPO tomorrow. Here’s how Blackstone bought a stake in the sandwich chain and took it public in a mere 18 months.
• New Mexico is the second-biggest oil producer in the country, and crude sales have fueled its $75 billion investment fund. The only problem is no one can agree what to do with the money.
• The South Korean Kospi has plunged 40% from its high in June, with trading across the entire market halted for a second straight day today to prevent further losses.
• Bloomberg denied rumors that it will IPO now that founder Michael Bloomberg has transferred a stake in his company to his foundation.
• Meet the AI startup with 50 employees and no product that’s worth $32 billion.

Calendar

Economic reports: The focus stays on inflation tomorrow, with the June PCE reading arriving first thing in the morning. Economists expect PCE—the Fed’s favorite way to measure inflation—to rise 3.8% year over year, while core PCE, which excludes volatile food and energy prices, is expected to rise 3.4% year over year.

Earnings announcements: Amazon and Apple are the reports to watch tomorrow afternoon, but don’t forget about Coinbase, Strategy, Reddit, Rivian, Roblox, Mastercard, Shell, Altria, Bristol Myers Squibb, and Ferrari, among many more.

recs

🔌 Picks and shovels: Morgan Stanley says these 13 infrastructure stocks will profit from AI companies’ massive energy needs.

💰 A good problem to have: Here’s how rich investors are saving money on taxes by borrowing against their stocks rather than selling them.

🚀 Learn some trade secrets from one of the greatest fund managers of all time, including why he decided to buy Tesla back when it was $14 per share, and why he’s still bullish on SpaceX.

⛈️ The biggest impediment to bringing inflation down might be El Niño. Here’s how the weather could disrupt the Fed’s plans—and how these stocks could benefit.

🔍 Send in the interns: Take a look inside the bootcamp that accounting giant KPMG puts its youngest employees through, featuring auditing whodunits and fraud scavenger hunts.

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