Despite hosting the biggest sports tournament in history, the US is still in a vacation-destination recession.

According to research group Tourism Economics, the US tourism industry lost out on roughly $16.6 billion last year from international travelers ditching the US—and that number could grow to $21 billion this year. The US government’s harsh immigration policies, deployment of troops in US cities, and the White House’s general antagonism toward other nations are all pushing vacationers to choose other destinations.

Even the World Cup, which is the biggest sporting event on the planet and is bringing an estimated 1.2 million foreign visitors to the US this summer, hasn’t delivered the tourism windfall many hoped it would.

Just look at the numbers: 71 million international visitors are traveling to the US this year, including those coming for the soccer tournament. That sounds like a lot, but Tourism Economics data shows that visitors won’t reach the pre-pandemic record of 80 million until 2029. In fact, many hotels across the country that spent tons of money upgrading in preparation for the event are seeing bookings far below expectations, according to Bloomberg.

Lucrative turbulence

Using basic supply and demand logic, you might expect that fewer visitors flying to the States for the World Cup would translate to lower ticket prices for airlines. But what’s going on in the airline industry right now is not as simple as Econ 101.

Back when the Iran war spiked oil prices, airlines responded by raising fares (eight times, to be exact) after fighting began in late February. By May, ticket prices were a full $100 higher than a year prior.

But passengers have noticed that while oil prices have dropped 40% since their April high, airline ticket prices haven’t budged. The reason, of course, is because companies don’t need to cut airfare: Airlines saw that travelers would be willing to pay higher prices, and now aren’t going to lower them until they have to.

With budget airlines gone (RIP Spirit ), there’s even less price competition than there once was. On top of that, some airlines have been keeping prices higher by canceling unprofitable flights, eating into supply and spurring more demand for the routes that remain. That’s been bad news for budget-conscious travelers, and predictably great for these airline stocks: American Airlines has risen 21.47% over the past month, while Delta Air Lines jumped 11.58% and United Airlines surged 19.84% during that time.

With airline prices unlikely to fall soon, expensive travel could just be one more reason travelers put a trip to the USA on the back burner.—LB

🟢 What’s up

• Broadcom gained 4.83% as Apple expanded its chip partnership with a multiyear agreement worth more than $30 billion.
• MasTec rose 6.7% after acquiring electrical contractor Superior Group in a $1.65 billion cash-and-stock deal.
• Dell Technologies climbed 3.52% on an Evercore ISI price-target increase driven by growing confidence in its AI infrastructure business.
• Penguin Solutions surged 25.13% after earning Nvidia AI Factory Specialized Partner status.

What’s down

• Moderna slipped 7.48% despite receiving a higher price target from Morgan Stanley.
• FuelCell Energy tumbled 13.17% after launching an upsized 10.7 million-share public offering to raise about $225 million.
• Bath & Body Works fell 5.97% on a Goldman Sachs downgrade over concerns its third-party distribution strategy could cannibalize store sales.
• Estée Lauder dropped 3.13% after increasing the estimated cost of its restructuring plan to $1.75 billion from $1.55 billion.
• Palantir Technologies declined 1.6% as investors reacted to reports of growing political scrutiny and internal concerns.
• Zillow sank 1.46% and Rocket Co. lost 3.21% after a judge ruled that the two real estate companies are going to trial against the FTC.

Back in 2019, people were queuing up for Popeye’s chicken sandwiches, planning to storm Area 51, and going nuts for Baby Yoda. A lot has changed since then (though Baby Yoda has only reached new levels of superstardom), but one thing hasn’t: Nvidia’s price tag.

Since hitting an all-time high of $236.54 on May 14, Nvidia shares have sunk 16% through yesterday’s close, erasing over $1 trillion in market cap and giving the stock a valuation of just 18x forward earnings—its lowest level since 2019. To put that in perspective, the entire S&P 500’s forward P/E ratio is just above 20, while rivals AMD and Intel are trading at 73x and 137x, respectively.

The GPU king has been yanked lower by a double whammy: First, investors pulled their money out of Nvidia and poured it into memory stocks, the hot new focus of the AI trade. Now, traders are worried that the entire AI trade has finally lost steam, and have been pivoting out of tech entirely and into more conservative investments.

We never thought we’d write these words, but with such a cheap forward P/E ratio, Nvidia might be a great value stock. Nvidia owns 97% of the server GPU market, according to Bloomberg, and the company reported record revenue of $81.6 billion last quarter (up 85% year over year), while Wall Street expects more strong growth through the rest of this year. But hurry—just like with the Popeye’s sandwich frenzy, this deal won’t last forever.—MR

AI investors are packing their suitcases.

As US stocks slid today following the collapse of the Iran ceasefire, Chinese equities moved the other way, with investors rotating into the country’s increasingly competitive AI sector.

The gains were led by Alibaba, which jumped 11.03% after reports ahead of earnings suggested its loss-leading e-commerce business isn’t losing as much money as it once was. Peers Baidu and JD.com also climbed 4.93% and 4.3%, respectively, as investors took their money out of the overheating memory trade and shifted it into Chinese LLM developers, whose AI offerings remain far cheaper than US rivals like OpenAI and Anthropic.

Seoul’s selloff

That’s bad news for South Korea, whose KOSPI fell 5.35%, extending its losses to more than 20% from its recent high last month, pushing the index into technical bear market territory.

The Kospi is facing spillover from the index’s two biggest constituents, Samsung and SK Hynix, which together account for roughly half the benchmark. Samsung fell another 6.25% today, continuing its selloff this week as investors worried memory-chip pricing and earnings may have peaked. Meanwhile, SK Hynix’s planned Nasdaq depositary receipt—potentially raising up to $29 billion—has sparked dilution concerns.

The next destination

If this story feels familiar, that’s because the KOSPI has made a habit of keeping investors on their toes this year.

Last month, the index fell 8% in a single day, only to erase those losses the very next day as retail traders piled back in. Then, just two weeks ago, it tumbled another 10% in just one day, after regulators warned about excessive leverage in the market.

Adding today’s selloff to the mix, three major drawdowns are beginning to look like a pattern. As investors grapple with the KOSPI’s repeated bouts of volatility and Korea’s growing ties to the US-led AI supply chain, China’s resurgent tech sector could increasingly look like a compelling alternative, offering cheaper AI exposure and a way to diversify away from Korea’s memory-heavy market.

That could be welcome news for Alibaba. While the stock is still down 26.05% this year, analysts believe the company is nearing a turning point after narrowing losses in its food delivery business, allowing investors to refocus on its higher-margin cloud and AI operations.

For now, Alibaba still has baggage. But for AI investors looking beyond Korea’s turbulence, it may be the next ticket worth booking.—SY

• Smucker’s $5 billion acquisition of Twinkie-maker Hostess has gone horribly wrong.
• Fed officials couldn’t decide on the direction of interest rates, according to minutes from the most recent Fed meeting.
• Parents are facing delays opening Trump Accounts.
• Allianz is cutting up to 1,800 jobs as the insurance giant turns toward AI.
• The International Monetary Fund said that the war with Iran will leave the US with higher inflation readings until 2027.
• Jeff Bezos’ Blue Origins is now worth $130 billion.
• Bank of America did a $520 million about-face on OpenAI’s IPO.

Earnings announcements: Keep an eye on PepsiCo and the WD-40 Company, two consumer-facing companies that sell iconic products.

Economic reports: Existing Home Sales for June will give us a look at the state of the housing market, while the weekly initial jobless claims report provides some insight into the labor market.