• Economy: The July PPI reading revealed that wholesale inflation was flat last month, below forecasts of a 0.2% increase. It’s the latest cooler-than-expected inflation reading, and another reason for the Fed to potentially keep interest rates steady at its next meeting in September.
• Stocks: Both the S&P 500 and the Russell 2000 climbed to new all-time closing highs as traders celebrated PPI, with the S&P 500 rising above 7,800 for the first time ever during the trading session.
• Commodities: Crude prices eased after the US announced that nearly 9 million barrels of oil are making their way through the Strait of Hormuz every day. Gold hit a two-month high yesterday, but sank today as traders took profits.

AI

Morning Brew Inc, Photo: Michael M. Santiago/Getty Images

If Anthropic investors have their way, SpaceX won’t hold the title of biggest IPO in history for much longer. The Financial Times reported today that Anthropic’s backers are betting on an eye-popping $2 trillion valuation or more for the AI startup’s expected debut in October.

That figure sounds more like what a toddler would guess a house is worth before having a grasp of numbers than a reasonable valuation for a new public company. But the metrics the FT reported are pretty impressive: Anthropic’s projected annualized revenue could reach between $100 billion and $120 billion by the end of this year, more than ten times higher than where it started 2026.

Anthropic, which filed paperwork with the SEC back in June, has yet to officially set a target valuation for its IPO. But the company is preparing itself for the big splash: Bloomberg reported yesterday that Anthropic is in talks to acquire Decart AI for roughly $6 billion, which would be its biggest acquisition ever. Decart has a software platform that makes AI chips more efficient, a useful tool as Anthropic splashes out billions of dollars on datacenters.

Don’t forget that Anthropic still faces a slew of hurdles: It’s competition isn’t just ChatGPT and other Silicon Valley LLMs, but cheaper models out of China. It also triggered the ire of the White House, and was forced to pull two models due to regulatory scrutiny in June after the Trump administration called the company a national security threat.

Optimism or overconfidence?

It feels like not that long ago that companies were holding off on going public, citing the choppy stock market and cloudy macroeconomic conditions. Now, the once-sleepy IPO market is seeing trillion-dollar-plus debuts from tech behemoths.

Part of this is simply due to SpaceX’s success. As PitchBook analyst Emily Zheng explained to Brew Markets ahead of SpaceX’s debut, all of the AI unicorns were watching how the public market digested SpaceX, and taking note. Now that Elon’s darling has proven that it can rally ongoing enthusiasm from investors, prospective IPOs like Anthropic and OpenAI have reason to be optimistic.

But optimism and $2 trillion worth of confidence are two very different things—and only time will tell what Anthropic is really worth.—LB

      

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Stocks

🟢 What’s up

• Netflix gained 5.43% after Bill Ackman’s Pershing Square Holdings disclosed a new stake in the streaming giant.
• Birkenstock surged 11.59% on an earnings beat and expectations that full-year results will land at the high end of its guidance.
• Crypto exchange Bullish advanced 11.57% despite reporting a $280 million second-quarter net loss, reversing a profit a year earlier.
• Sandisk advanced 13.67% on an upbeat long-term outlook calling for double-digit annual revenue growth and expanding margins.
• Red Robin Gourmet Burgers jumped 21.32% after topping Wall Street’s second-quarter expectations.
• Workday jumped 17.78% following reports that private equity firm Silver Lake is in talks to acquire the company, in what could become one of the largest software buyouts ever.

🔴 What’s down

• Drone company Ondas Holdings tumbled 8.80% as a wider-than-expected quarterly loss overshadowed 1,236% revenue growth.
• Coach and Kate Spade owner Tapestry fell 16.49% on soft guidance despite another quarter of solid sales growth.
• AI chipmaker Cerebras Systems dropped 11.85% after swinging to a quarterly loss.
• Cisco Systems declined 8.40% despite beating earnings estimates, with investors focusing on weaker gross margins.
• Coherent lost 7.99% despite an earnings beat, as lofty expectations following rival Lumentum’s results left little room for upside.

Stock of the day

StubHub stumbles

Morning Brew Inc.

Here’s an easy business model: Sell tickets to the most popular, most watched, and most profitable sporting event in the world. For StubHub, that was apparently too much to handle.

The ticket reseller was supposed to have an excellent second quarter, and for what it’s worth, the company’s top line looked great: Revenue rose 33% year over year to a record $573.1 million. The problem was expenses, which soared 37%, completely wiping out any sales gains and leaving StubHub with a loss attributable to common stockholders of $40,000, or $0.00 per share—well below analyst expectations of an $0.11 per share profit.

“With over 75 matches played over the course of just 2.5 weeks in the second quarter, we navigated unique operational challenges and delivered for fans,” CEO Eric Baker said on the earnings call. “As with any event of this scale and complexity, a small subset of orders experienced fulfillment issues, and we chose to increase our investment in customer support and fulfillment to address them.”

There’s nothing wrong with spending money to fix any issues that your customers are having, but when doing so erases your entire quarter’s profits, there’s probably bigger problems afoot than just “a small subset of orders.” Investors agreed: StubHub shares stumbled 10.07% today, topping off a 58.40% decline since the company went public last September.

And there are plenty more issues ahead: StubHub has already settled once with the FTC this year for failing to alert customers of its many fees, but regulators are still circling. Plus, California is currently considering a legislative proposal that would set a limit on ticket resale prices.

The World Cup was StubHub’s chance to show the market it could handle the pressure of a global sporting event. Instead, it scored an own goal.—MR

Trade

Morning Brew Inc, Photo: Adobe Stock

Uncle Sam is handing out tariff refunds—and corporate America is first in line.

As of July 31, US Customs and Border Protection had received more than 252,000 refund applications and accepted $128.7 billion worth of requests for processing. A chunk of that has gone to some of the biggest companies in the US: More than 40 S&P 500 companies have disclosed a combined $9.6 billion in tariff refunds over the past quarter, including at least $2.1 billion in cash.

Some of the biggest beneficiaries include:

• Apple—reported $2.2 billion in refunds
• Nike—recorded $986 million
• FedEx—received $800 million

Technology hardware companies have reported the most refunds of any sector, with Apple alone accounting for nearly 90% of the group’s total.

Those refunds are already showing up in earnings. Apple said they contributed $0.11 to EPS last quarter, or roughly 5% of the total, while GE HealthCare said refunds added $0.18 to its quarterly EPS of $1.24.

One catch: Reported refunds don’t necessarily mean cash in the bank. Some companies are recognizing expected refunds before the money arrives, meaning earnings can get a one-time boost without an equivalent increase in liquidity.

Consumers get a cut

If you feel like you’re missing out on the action, some of those tariff refunds are making their way back to customers, too.

Shippers, which directly collected tariff charges from customers, are now passing those refunds along. FedEx plans to return about $800 million to customers beginning in August. Costco said it will distribute refunds to customers at levels similar to the tariff costs it had passed on, and valve supplier IDEX expects to rebate $14.7 million of the $20 million it received.

For retailers, it’s more complicated. Companies like Amazon (which got $640 million in refunds) generally passed tariff costs along indirectly rather than as a separate fee, making individual refunds hard to trace. Instead, Amazon management said some of that money could make its way back to consumers through lower prices.

Even so, consumers are getting back far less than they paid in tariffs, prompting more than 80 class-action lawsuits against retailers, including Costco, Nike, and Amazon.

Zoom out: For the American economy, tariffs are becoming a huge drag. The US deficit hit $432 billion for the month of July—a record for the month—as refunds cut into customs revenue. The result is a messy redistribution: Companies are getting billions back, consumers are seeing only a fraction, and Washington is dealing with a fiscal headache.—SY

      

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News

• Despite pioneering EVs at Tesla, Elon Musk is relying on fossil fuels to power SpaceX.
• You’re not imagining it: Wage gains have been canceled out by inflation.
• The K-shaped economy travels, too: Rich people are propping up the airline industry as ticket prices surge 25% from last year.
• OpenAI Chief Revenue Officer Denise Dresser is departing the company, making her the second executive to leave this week.
• The call is coming from inside the house—Bill Ackman called his own fund’s underperformance this year “frankly absurd.”
• September is approaching: Here’s why it’s the worst month for stocks.

Calendar

Economic reports: US consumers are in focus tomorrow with the July retail sales report, and we’ll have the preliminary consumer sentiment survey for August from the University of Michigan.

recs

🎤 Kevin Warsh’s speech at Jackson Hole will be must-watch TV for investors. Here’s the trade you should make before he takes the mic.

💰 Wealth managers are struggling to convince investors to put to work the $3 trillion they’ve got stuffed in money market funds.

🧠 Bill Ackman says investors are so focused on AI that they’re missing some of the biggest bargains on the market. Here are the six stocks he’s bought this year.

🏘️ A housing market slump is creating some opportunities—if you know where to look. Here are 10 cities where sellers are listing their homes for less than they originally paid.

📈 Solid CPI and PPI reports don’t mean inflation’s going away anytime soon—but it does mean that one inflation-protection investment is suddenly on sale.