• Markets: Stocks crept cautiously higher as Treasury yields fell for a second day. All eyes are on Nvidia’s earnings announcement tomorrow afternoon (more on that below).
• Trade: Canada went “elbows up” and revealed retaliatory tariffs of 15% to 50% on about $20 billion of US imports starting September 8. Here are all the American-made goods that will be affected.
• Crypto: Bitcoin climbed above $80,000 for the first time in over three months this morning, though the crypto king’s rally took a quick breather this afternoon.
• Bonds: Drama is brewing after hedge fund manager Stanley Druckenmiller, Treasury Secretary Scott Bessent’s former mentor, penned an op-ed in the Wall Street Journal saying Bessent’s buyback plan is a mistake.

Earnings

Morning Brew Inc

Depending on who you ask, the AI trade is either a huge bubble that’s about to destroy the economy, or an underestimated force for good. But the skeptics and bulls alike can agree on one thing: Nvidia is the ultimate bellwether of how investors are feeling about AI.

Shareholders don’t exactly seem resoundingly optimistic ahead of Kingvidia’s Q2 report, which hits after the closing bell tomorrow: On Monday, shares capped off a seven-day losing streak, their worst week in four years. Some of that was just basic pattern recognition: In each of its last four earnings reports, Nvidia declined immediately after. The stock gained 2.19% today.

But if you zoom out, Nvidia’s been struggling for a while now: Since its last earnings report in May, shares are down roughly 4.5%. The company has faced fierce competition from rivals, and is in the center of larger questions about how many winners of the AI buildout there will actually be.

Most analysts still rate the company a Buy, and some believe that Nvidia’s ‘meh’ performance presents a huge opportunity to snag shares on the cheap. But eagle-eyed investors will be scrutinizing its report closely.

Don’t call it a comeback—quite yet

Broadly, investors are expecting revenue to reach $92.2 billion for Q2, which would be a roughly 97% jump from last year. Last quarter, Nvidia reported $81.62 billion, an 85% leap year-over-year.

Here are some other tidbits to watch for in the earnings report:

• Nvidia’s customer base: The company’s explosive rise has been fueled by sky-high demand from its biggest customers, the hyperscalers (aka Amazon, Google, and Microsoft). But investors want to see that Nvidia has staying power—and to do that, it needs to expand its customer base beyond the biggest Big Tech companies.
• The $1 trillion jackpot: At Nvidia’s GTC conference earlier this year, CEO Jensen Huang said he projects $1 trillion in sales through 2027 via the company’s Blackwell and Vera Rubin products. Investors will want an update on how that’s coming along.
• The web of AI financing: The ultimate question is whether all of the complicated financing techniques propping up the AI infrastructure buildout will lead to a huge payoff—or crumble like a house of cards. Specifically, shareholders will want more details about Nvidia’s new deal with some of Wall Street’s biggest asset managers.

“Bottom line: How Huang frames NVIDIA’s growing and complex set of circular financing arrangements across the AI ecosystem may become a larger focus on Wednesday’s call,” explained Ameriprise Chief Market Strategist Anthony Saglimbene in a note. “How his framing is received by investors may do more to move the stock post-earnings than the headline numbers and outlook itself.”

Sometimes being a good storyteller is the most important skill a CEO can have.—LB

      

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Stocks

🟢 What’s up

• Moderna gained 14.36% following a Wolfe Research upgrade, with the firm pointing to growing investor enthusiasm around its cancer vaccine.
• AMD climbed 4.91% on a Raymond James upgrade to Strong Buy.
• Marvell Technology surged 4.84% after Rosenblatt and Susquehanna both raised their price targets ahead of earnings, citing continued AI demand.
• Navitas Semiconductor rose 1.72% on a $233 million deal to acquire power-management company Claros.
• Software company Dynatrace jumped 2.08% thanks to a Morgan Stanley upgrade that sees annual growth topping 20% over the next few years.
• Bloom Energy advanced 6.58% following a disclosure that Nancy Pelosi purchased positions tied to the stock.
• Standard Nuclear jumped 16.7% on a new deal to supply Radiant Industries with nuclear fuel through 2031.

🔴 What’s down

• Dick’s Sporting Goods fell 30.68% on weaker-than-expected revenue, with the retailer pointing to a tough market for footwear.
• Rubrik slipped 5.48% as investors took profits ahead of the cybersecurity company’s earnings report.
• Target dropped 3.78% amid backlash over a Halloween costume that critics said resembled racist imagery.

Stocks of the day

New kids on the block

Morning Brew Inc

Private companies from SpaceX to Jersey Mike’s are going public, as investors try to cash in on a strong stock market and a lighter regulatory environment. But the biggest debuts may be ahead, as a boatload of big names prepare to hit the market in the coming months:

• Oura will try to raise $3 billion from an IPO likely to arrive in September, which would give the smart-ring maker a valuation of $16 billion.
• Inspire Brands, parent company of Dunkin’ and Arby’s, is seeking a valuation of around $20 billion when it hits the market by the end of this year, or perhaps sometime early next year.
• E-commerce and fast-fashion giant Shein wants to raise $1.77 billion for its debut on the Hong Kong stock market on September 1, giving it a valuation of $27 billion—a far lower price tag than it once commanded.

Of course, all of these companies pale in comparison to the most anticipated debuts of them all: Anthropic and OpenAI. OpenAI management recently made waves when they said the AI startup will be public by 2027 or sooner; Anthropic may still beat its rival to market and debut sometime before the end of the year. In fact, Anthropic is expected to release its prospectus in the coming weeks, which is rumored to claim that the company’s total addressable market, or the sum of all its potential revenue, could be higher than $30 trillion—topping SpaceX’s TAM of $28.5 trillion.

The last time the IPO hype was this sky-high was back in 2021—just before the market tanked and pushed 80% of all newly public stocks below their IPO prices. Here’s hoping this time will be different.—MR

Macro

Morning Brew Inc, Photo: Adobe Stock

Ask Americans how the economy is doing, and you probably won’t get a glowing review. Consumer confidence just fell to a seven-month low in August, as households grew more worried about jobs, business conditions, and inflation.

But while sentiment continues to sour, actions speak louder than words—and some companies are seeing something very different from consumers.

Visa and Mastercard shares both hit record closing highs yesterday, backed by remarkably strong consumer spending. Visa’s quarterly payment volume topped $4 trillion for the first time, up 10% in constant currency terms, while Mastercard’s gross dollar volume climbed 8% to $2.9 trillion.

It’s worth noting that other major consumer bellwethers, including Expedia and Coca-Cola, also notched records yesterday—more proof that spending remains alive and well.

Picky, not broke

Inflation has picked up this year, driven in part by higher energy prices and tariff pressures. And yes, some of the growth in consumer spending simply reflects higher prices translating into more dollars at the register. But wage growth is still roughly keeping pace with inflation, helping households preserve enough purchasing power to keep spending.

Consumers are just more selective about where that money goes. In fact, Walmart, Target, and Home Depot have all pointed to shoppers searching for value and pulling back on bigger purchases.

Walmart, for example, cut prices on more than 11,000 items during the quarter—roughly twice as many adjustments as usual—while Home Depot said customers are favoring purchases that don’t require financing and tackling smaller projects instead of expensive remodels.

“US consumers consistently find ways to spend money, which is shocking and a little worrisome,” Greg Portell, lead partner of global markets at Kearney, told Bloomberg.

All this spending sounds great for the economy, but the problem is that consumers have increasingly leaned on savings, wealth gains, and credit to support their shopping habits. The personal saving rate has fallen every month this year, reaching just 2.7% in June—meaning Americans are saving less than 3 cents of every dollar in disposable income.

The economy’s next test

That’s not very sustainable, and is probably why economists forecast some cooling: Bloomberg’s August survey sees consumer spending growing at a 2.1% annualized pace in the third quarter, down from 3.2% in Q2. At the same time, the Conference Board’s Expectations Index—which measures how households think the economy will look six months from now—fell 7.8% in August.

That matters because consumer spending is the engine of the US economy, accounting for roughly 70% of the country’s economic activity. And if Americans eventually start spending the way they already feel, the economy could soon have a big problem on its hands.—SY

      

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News

• SpaceX is constructing a $100 billion spaceport in Louisiana.
• Apple announced new products with AI upgrades, including the revamped Mac Mini and Mac Studio.
• Waymo is rolling out driverless cars in Germany starting in 2027, its third international market.
• Paramount CEO David Ellison is facing a tough antitrust challenge blocking him from buying Warner Bros. Discovery.
• United Airlines adds a slew of new flights starting in 2027—from Sardinia to Okinawa. Here’s why the airline is betting big on premium international travel.
• The SEC has subpoenaed Wall Street banks, including Goldman Sachs and Citigroup, over the Situational Awareness debacle.

Calendar

Economic reports: The biggest report of the week arrives tomorrow in the form of the July PCE reading. Economists expect PCE to rise 0.1% month-over-month and hit an annual rate of 3.6%, while core PCE should remain steady at 3.3%.

Earnings announcements: There are a handful of companies dropping their latest quarterly numbers, but let’s be honest—all eyes are on Nvidia.

recs

🇺🇲 Texas’ economy is the size of Russia’s. Florida? Australia. Here’s how each US state’s economy compares to the GDP of countries around the world.

🛠️ The battle of the builders: Should you invest in Home Depot or Lowe’s right now? Only one offers strong upside ahead.

📈 There’s a 75% chance the Fed hikes interest rates by December. Here are the three sectors that will benefit if it does.

😢 The South Korean stock market was the hottest place to invest. Now, it’s destroyed $2.5 trillion of wealth in a matter of weeks. Enjoy some schadenfreude reading about the traders who lost it all betting on the AI boom.

🤖 The future is humanoid: JPMorgan Chase analysts forecast a shortage of US manufacturing jobs in the coming years. Here’s how robots fill the gap, and the companies that could profit.

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This time last week...

Readers’ most-clicked story was about how Costco will start selling medicare plans, which feels like a plotline from Idiocracy.