• Stocks: Indexes enjoyed a strong start to the week, with the Dow climbing to a new closing record high thanks to hopes of peace with Iran and surging mega-cap tech stocks.
• Commodities: Oil tumbled after President Trump called off “the biggest attack since World War II” over the weekend and said the US and Iran will restart negotiations today, though Iran denied any talks were happening. Meanwhile, Deutsche Bank says the gold selloff has ended and prices are ready to climb through the end of the year.
• Economy: JPMorgan says the Fed’s decision to keep interest rates steady last week could force a rate hike before the end of the year (more on that later).

Pharma

Morning Brew Inc., Photos: Adobe Stock

Investors got to witness one of the rarest sites on Wall Street today: a deal nobody wants done.

AstraZeneca is in talks to merge with Bristol Myers Squibb in a deal that would create a company worth roughly $400 billion, according to a report from the Financial Times on Sunday. If a deal is struck, it would be one of the biggest mergers in history.

AstraZeneca, the UK’s second-largest publicly traded company, is purportedly looking to deepen its US presence after listing on the NYSE earlier this year, trying to make further inroads into a market that accounted for 42% of its revenue in the first half of 2026.

But investors aren’t sold: AstraZeneca shares fell 6.88%, while BMS eked out a 0.24% gain as analysts warned that the merger faces both strategic and financial hurdles.

Wall Street is left wondering

Analysts from RBC Capital Markets, Jefferies, UBS, and Barclays all sounded bewildered in notes this morning, confused by AstraZeneca’s desire to make a deal. The company has a lot of momentum: It has spent the past several years expanding into the rare diseases and obesity markets through its acquisition of Alexion. And it’s on track to grow annual revenue to $80 billion by the end of the decade, up from the roughly $59 billion it generated last year.

By all accounts, AstraZeneca has a strong pipeline of drugs to buoy its business for years to come. BMS, meanwhile, faces the opposite problem: Its two biggest drugs by revenue, Eliquis and Opdivo, begin losing patent protection in 2028. The company is also under pressure to reignite growth after its $74 billion Celgene acquisition in 2019 fell short of expectations.

Then there’s the fact that with cancer treatments accounting for 44% of AstraZeneca’s 2025 revenue and about half of BMS’ sales, regulators would likely scrutinize the deal over antitrust concerns. That could drag out approvals and slow drug development.

The return of M&A

The talks come as US dealmaking hits record levels this year, helped by a friendlier regulatory environment under President Trump. Drugmakers have been especially active as they race to replenish their pipelines before blockbuster medicines lose patent protection.

So far though, most of Big Pharma has favored bolt-on acquisitions worth less than $10 billion, rather than betting on blockbuster mergers. If AstraZeneca goes forward with this deal, it would break from that playbook—and investors may start wondering whether management has doubts about its pipeline after all.—SY

      

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Stocks

🟢 What’s up

• Amazon gained 4.58%, propelling its market cap above $3 trillion, making it just the fifth company ever to reach the milestone.
• Boeing climbed 8.03% after the FAA approved its 737 Max 7, ending years of delays.
• Alibaba rose 4.09% on the launch of its latest AI model, Qwen3.8-Max, which the company says rivals Anthropic’s leading models.
• IMAX jumped 6.67% as the company notched its third straight weekend of more than $50 million in global ticket sales.
• Corning advanced 6.09% following a Truist upgrade that cited a more attractive valuation.
• SpaceX gained 5.68% ahead of its quarterly earnings report tomorrow (more on that later).

🔴 What’s down

• GameStop fell 12.25% after announcing plans to exchange $1.4 billion of convertible debt for common stock.
• Circle Internet Group dropped 3.61% after Morgan Stanley downgraded the stock, citing weaker expectations for USD Coin circulation.
• eBay slipped 6.03% following a Wells Fargo downgrade over concerns that its Depop acquisition will weigh on future earnings.
• TG Therapeutics sank 11.26% despite beating revenue estimates and raising full-year guidance.
• Marriott International lost 6.97% as weaker-than-expected profit guidance overshadowed mixed quarterly results.

Stock of the day

What goes up must come (way) down

Morning Brew Inc.

SpaceX soared to the moon when it arrived on the market a few weeks ago. But shares have plunged 51% from their post-IPO intraday high—and there may be more pain right around the corner.

SpaceX will reveal its second-quarter earnings tomorrow, its first report as a publicly traded company and one that promises to set the tone for the foreseeable future. Of the company’s three business units—space, connectivity, and AI—investors are most excited about the third, as lucrative datacenter agreements with Anthropic and Alphabet could bolster the company’s bottom line.

On the other hand, a massive debt pile, a sky-high valuation, and enormous short interest are all serious issues. But the real problem is that no matter how well SpaceX actually performs, there’s a massive pack of early investors waiting to dump their shares. The post-IPO lockup period ends in segments, and the first of those segments kicks off on Thursday, when investors will suddenly be allowed to sell approximately 900 million shares—and they will almost certainly be selling in droves, putting serious pressure on the stock.

SpaceX was always a moonshot investment—and, in a metaphor so perfect you couldn’t make it up, a SpaceX rocket is set to crash into the moon on Wednesday. Investors may want to take that as a sign and steer clear.—MR

Treasuries

Morning Brew Inc., Photos: Adobe Stock

It feels like there’s enough chaos here in the US to keep us all busy—but one of the biggest risks to our economy is suddenly coming from thousands of miles away.

Following rumors and its inclusion on a “to-do” list from Treasury Secretary Scott Bessent, the US and Japan teamed up on Sunday to support the yen. The Japanese currency fell to a 4-decade low last week thanks to Japan’s policy of keeping interest rates much lower than the US, making dollar-dominated assets more attractive in comparison.

“Friday’s coordinated foreign exchange actions countered disorderly yen movements,” Bessent wrote on X. “We will not hesitate to participate in further joint intervention.”

It may sound like a boring currency negotiation, but the move to prop up the yen is actually a pretty big deal: It’s the first joint intervention in 14 years, and it’s the first time since 1998 that the US is actively participating in strengthening the yen.

Fixing fixed income

While Bessent framed the move as an effort to curb “disorderly” currency markets, many investors think there’s another motive at play: preventing Japan from dumping Treasuries and weakening the US bond market, which is currently flashing bright red warning signs.

At the end of last year, traders were pricing in up to three rate cuts in 2026 from the Fed. Now, after inflation flared thanks to the Iran war, investors are expecting up to two rate hikes this year—and when rates rise, bond yields climb, too. Yet even while the Fed kept rates steady last week, yields still skyrocketed: The yield on the US 30-year note hit 5.27%, its highest since the financial crisis in 2007.

That’s where Japan comes in. The Japanese government is the single largest foreign holder of US Treasury debt in the world. If the yen depreciates further, the Japanese government could be forced to sell Treasuries to raise the funds needed to prop up the yen. That would add supply to an already strained Treasury market and push yields higher.

Quick reminder: Bond prices and yields move inversely. One of the biggest owners of US treasury bonds going on a selling spree would put even more pressure on an already buckling bond market.

Why should you care about the yen?

Spiking yields tends to hurt stocks (especially growth names) because it makes borrowing more expensive and offers investors a compelling alternative to the market. But it isn’t just an issue for stocks: If yields remain elevated, mortgage rates could drift higher, which would make homeowning more expensive and create a domino effect through the rest of the economy.

Higher Treasury yields would also mean that financing for everything from student loans to credit cards to car loans could suddenly cost more. It would be especially bad news for the hyperscalers borrowing massive amounts of money—and supporting the entire stock market—in financing their datacenter buildouts.

Over the past month, most macro indicators have painted a pretty okay—though not perfect—picture of the economy. But the US’s aggressive move to protect the bond market is enough to make investors wonder whether everything is really alright under the surface.—LB

      

News

• Duh of the day: Senators argue that allowing betting on wildfires is playing with fire.
• Last month, US manufacturing activity expanded at its fastest pace since 2022.
• President Trump said oil giants Chevron and Exxon made “too much money” during the Iran war.
• Beleaguered universities are dipping into their endowments.
• Hugging Face’s CEO claimed that China is winning the AI race.
• Citadel Securities argued that the factors driving this year’s bull market are “firmly intact.”
• 25 states are suing the Trump administration over the latest round of tariffs.

Calendar

Economic reports: Let the week of labor market news begin, with the Job Openings and Labor Turnover Survey (JOLTS) reading. And don’t forget, we’ve also got the US June trade balance.

Earnings announcements: SpaceX, AMD, Caterpillar, HSBC, Merck, Toyota, Arista Networks, Amgen, McDonald’s, Gilead Sciences, Booking.com, Pfizer, BP, Spotify, Cummins, Marathon Petroleum, and Apollo Global get the new week of earnings off to a hot start.

recs

👍👎 Take a look at the best-performing stocks in July—and the worst.

🫧 The US loves a good bubble, and it loves ignoring them even more. Here’s a quick recap of all the stock market bubbles over the last 12 years, and why the next one might be different.

🚴 The Tour de France rakes in about $170 million per year in media revenue. Meet the deeply stubborn family that keeps all of it.

🤝 ‘Financial influencer’ is usually a synonym for conman, but these three are worth trusting.

👑 OpenAI was the king of the AI world before fierce competition and public scrutiny toppled it. Here’s how the company plans to win back its crown.

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