• Commodities: Brent oil prices broke above $101 per barrel for the first time in two months today after the US struck five Iranian tankers last night. Comments from President Trump—that the war likely won’t end until after the midterm elections—didn’t reassure traders that prices are coming down anytime soon.
• Stocks: Indexes fell across the board as fears of rising oil prices contributing to higher inflation continue to mount ahead of the Fed’s meeting next week.
• Bonds: 10-year Treasury yields popped to their highest level since November 2023 after Treasury Secretary Scott Bessent unveiled a new buyback plan that left some traders disappointed (more on that later).

Tech

Illustration: Morning Brew Inc., Photo: Michael Buckner/Getty Images

Apple is asking customers a very expensive question: Would you pay over $2,000 for an iPhone?

Apple made its case today at the “Surprise and Shine” keynote in Cupertino, the company’s first major product event under new CEO John Ternus.

Alongside the iPhone 18 Pro and Pro Max, new Apple Watches, AirPods, and a major Siri upgrade, the star of the show was Apple’s first foldable phone: the iPhone Duo. It starts at $1,999, which is lower than expected, and will be available Oct. 23.

Ternus pitched the Duo as a more polished take on foldables, saying some existing models feel like “two phones awkwardly stuck together.” Closed, the Duo has a 5.4-inch screen about the size of a passport. Open it up, and you get a 7.6-inch display, the largest ever on an iPhone.

Shares fell 0.28% today.

Late to the fold

A foldable iPhone isn’t exactly groundbreaking. Samsung has been selling a foldable phone since 2019 and currently controls roughly 40% of the global foldable market, while Huawei owns 30%.

But despite years on the market, foldables have never really escaped tech-nerd territory. They’re expensive, bulky, and feel a little unnecessary. For most people, opening up a thicker phone just to scroll TikTok on a bigger screen hasn’t been enough to justify the trade-offs.

That explains why foldables are expected to make up just 2.2% of global smartphone shipments this year. But because they sell at such a premium, IDC expects them to account for nearly 7% of industry revenue.

That could be where Apple comes in. Apple didn’t invent smartphones, smartwatches, or wireless earbuds, but it has a knack for taking existing products mainstream. Its foldable has reportedly been nearly a decade in development, giving the company plenty of time to learn from rivals’ mistakes.

Analysts think the strategy could work again, projecting that Apple could capture roughly 40% of foldable shipments by the end of 2027, according to Counterpoint.

A sticky consumer

A $2,000 phone isn’t cheap, but analysts don’t think the hefty price tag will scare buyers away. JPMorgan Chase notes that average iPhone prices have risen roughly 50% since 2015, while unit sales still grew about 10% during that time, suggesting that Apple customers keep buying even as prices climb. Citi expects about 5 million in foldable sales in the second half of this year, and another 2.3 million in the first quarter of 2027.

Worst case, Apple still has a few dependable buyers: tech executives who need the newest gadget, finance bros who consider four screens a personality, and MrBeast, who can probably clear out the first 1,000 for a giveaway.—SY

      

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Stocks

🟢 What’s up

• Meta climbed 6.55% following the launch of its new personal AI agent app, Muse.
• Centerspace jumped 8.44% on an all-stock merger with Independence Realty Trust that will create an $8.1 billion residential real estate company.
• Signet Jewelers gained 23.85% after raising its full-year earnings forecast above Wall Street expectations.
• Chime rallied 6.93% on a $590 million deal to acquire longtime partner Stride Bank, a move that will turn the fintech company into a bank itself.
• Academy Sports + Outdoors gained 14.40% on an earnings beat.
• Cloudflare surged 10.55% after launching a new AI cybersecurity service that incorporates OpenAI’s cyber models.

🔴 What’s down

• ServiceTitan fell 29.98% as a disappointing revenue outlook overshadowed its quarterly earnings beat.
• Casey’s General Stores slipped 14.24% despite beating quarterly expectations, with the results falling short of investors’ high expectations.
• Braze dropped 21.73% despite solid quarterly results, as investors looked for more evidence that AI is accelerating revenue growth.
• UnitedHealth declined 1.94% following the sale of a stake in its Florida-based Optum Health business to private equity firm TPG.
• Chewy fell 10.83% as declining liquidity overshadowed mixed quarterly results and a higher full-year outlook.
• Comcast sank 6.61% after warning that broadband customer losses are unlikely to improve from a year ago amid continued competition.

Stock of the day

Jersey Mike’s serves up subpar earnings

Illustration: Morning Brew Inc., Photo: Adobe Stock

Few earnings stir up lunch fantasies quite like Jersey Mike’s Subs, although its debut report delivered a bit of a mixed bag: Revenue rose 10% year-over-year to $208 million, slightly short of $209 million estimates, while profit tumbled 37% to $37 million. Comparable sales inched up 2.3%, as expected.

The company also reaffirmed its outlook for the rest of the year, including same-store sales growth of 2.5% to 3% by the end of the year. That’s above analyst expectations, and was enough to stoke appetite for its stock today by 7.68%.

Hopes have been high for the 51-year-old sandwich chain ever since Blackstone caught a whiff of the company’s potential and sliced off a majority stake in 2024. It then served up the stock to public markets in just 18 months (that’s blinding drive-thru speed in private equity terms). Although shares opened below the $23 target, the company drummed up $1 billion, making it the biggest restaurant IPO since Krispy Kreme in 2021.

Jersey Mike’s is currently the largest public sandwich chain, and the second-largest overall next to Subway—but its underdog status could change to top contender if it keeps up its rapid growth. “Between 2018 and 2025, JMKE took more market share than any other chain in the limited-service sandwich categories,” Bank of America analysts noted earlier this week. They believe a fragmented sandwich market means Jersey Mike’s can continue to capitalize on its strategy of expanding its store footprint while growing its average unit volume (aka, how much revenue the average store generates).

But that all lies ahead—for now, all we care about is that the chain’s beloved hot Italian sub is back by popular demand. So long as they keep it on the menu, this stock’s going to the moon.—JD

Bonds

Illustration: Morning Brew Inc., Photos: Melissa Sue Gerrits/Getty Images, Adobe Stock

These days, fixed income aficionados are divided on one central question: To what extent should the government interfere in the flailing bond market?

Today, the Treasury Department said it will buy back up to $6 billion of government debt on Thursday in an effort to stabilize the bond market. That’s roughly triple the amount that the government typically buys back during these operations. The announcement isn’t exactly a surprise, given that Treasury Secretary Scott Bessent said in August that the Treasury would at least double the size of its longer-dated buybacks.

The reason, according to Bessent, is to add liquidity to the market for 10- and 20-year notes. But his true goal is to suppress Treasury yields, which have skyrocketed over the past few weeks thanks to a combination of inflation fears, rising oil prices, and renewed panic about the ballooning national debt.

But many investors are critical of the government playing God. In an op-ed in the Wall Street Journal, famed investor and former Bessent mentor Stanley Druckenmiller criticized the move, arguing that it would prove futile. “Governments defending prices against fundamentals always lose,” Druckenmiller wrote. “The only variable is how much they spend before conceding.”

The ironic part: Treasury traders were anticipating a buyback ranging from $6 billion to $10 billion. Bessent’s decision to come in at the lower end spurred Treasury yields to new heights this afternoon.

Bessent is the captain now

Bessent’s interventionist approach isn’t stopping at a Treasury buyback, either. He didn’t mince words when defending his move to prop up the Japanese yen, arguing that bond traders essentially need to shut up and trust that he knows what he’s doing.

“I am the house now, so when we intervene with the Japanese yen, I have pretty good insight into what the Bank of Japan is going to do,” Bessent said at an event yesterday. “And you can bet against me if you want,” he added.

Given that Treasury yields rose to their highest level since 2023 after Bessent’s buyback announcement, it seems like a lot of traders are taking him up on that.—LB

      

Cue the research

Morning Brew

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News

• Google is investing $15 billion in AI infrastructure in the “Texas of Europe,” aka Finland.
• The White House added a bunch of new Canadian products to its banned imports list, including motorbikes, dairy, and alcohol, as the trade war continues to heat up.
• Robinhood CEO Vlad Tenev defended the company’s move to make tokenized stocks, arguing that public companies don’t get a say in what financial products are built around their companies.
• LIV Golf has officially filed for bankruptcy.
• OpenAI is going Good Will Hunting mode: The company says it solved a Millennium Prize math problem.
• On the other side of the aisle, a top Anthropic researcher quit due to fears that AI labs are creating dangerous, “out of control” technology.

Calendar

Economic reports: August PPI is the appetizer before tomorrow’s main dish (CPI). Meanwhile, keep an eye out for existing home sales, July wholesale trade sales, and initial jobless claims.

Earnings announcements: Macy’s, Oracle, and Adobe are the final big names we’ll hear from this earnings season.

recs

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💰 OpenAI and Anthropic are turning their employees into millionaires. Now they have to figure out how to spend all that money.

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