• Stocks: The tech sector pulled the entire index down with it as investors continued to rotate out of semiconductor stocks.
• Commodities: Oil prices rose this morning as conflict between the US and Iran continued to escalate, before giving up gains this afternoon. Gold spot prices dropped below $4,000 per ounce for the first time since last November.
• Crypto: Visa unveiled a new platform allowing institutions to “access, store, and redeem stablecoins.” It’s a vote of confidence in crypto from a major financial institution, and a serious threat to Circle, which slid 7.66% today.

Healthcare

Morning Brew Design

A cholesterol pill and magic mushrooms may not seem to have much in common, but they both could be Big Pharma’s next cash cow.

Today, the FDA greenlit Lipfendra, a groundbreaking new pill from Merck that treats high cholesterol even better than statins, the current gold standard treatment. The drug works by targeting and removing a protein called PCSK9, which stops the body from clearing LDL, or “bad” cholesterol.

The drug already exists as an injection, such as Amgen’s Repatha, which generates $3 billion in sales a year. But cost has been a barrier to its wider adoption, and Merck’s proposed price tag for Lipfendra is far lower than the injectable versions. Plus, a pill form will be more palatable for patients, which could help propel sales of the new drug to $5 billion a year, according to the Wall Street Journal.

Shares of Merck rose 3.29% today on the news.

Far out, man

In a very different corner of medication development, Eli Lilly is betting big on psychedelic drugs.

Today, the pharma giant acquired AtaiBeckley for $2.8 billion, which will give it access to the company’s range of mental health treatments utilizing hallucinogens such as DMT and MDMA. Using psychedelics to treat conditions including depression and PTSD has risen in popularity over recent years, and the FDA under the Trump administration has fast-tracked development of some of these treatments.

Shares of Eli Lilly jumped 1.19%.

The patent cliff is coming

Weight loss drugs have determined Big Pharma’s winners and losers over the past few years, but a far more existential threat is looming over the industry.

Over the next few years, a slew of patents for blockbuster drugs will expire. Brand name drugs worth over $174 billion in annual sales will lose exclusive patents by 2032, with some estimates of lost sales as high as $350 billion. For the pharma companies that weren’t early movers in the GLP-1 gold rush—think Merck, Pfizer, and AbbVie—the looming patent cliff is a huge threat to their business.

Now these companies are in a race to roll out new medications before they go tumbling over the patent cliff, even if it means betting on esoteric treatments like psychedelics. But investors aren’t the only ones who get to enjoy the show: Today, Kalshi announced it’s expanding biotech wagers to include the outcomes of clinical trials.

A good way to hedge your pharma investments, or a symptom of the dystopic gamification of financial markets? You be the judge.—LB

      

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Stocks

🟢 What’s up

• UnitedHealth Group surged 1.2% on a blowout second quarter and a higher full-year profit outlook, buoyed by easing medical costs and AI-driven efficiency gains.
• Abbott Laboratories gained 10.69% after raising its full-year profit forecast on stronger nutrition sales.
• J.B. Hunt Transport Services climbed 8.01% with second-quarter earnings topping expectations amid resilient freight demand.
• Uber Technologies rose 1.89% on a $14.8 billion deal to acquire Delivery Hero, expanding its global delivery business.
• ManpowerGroup advanced 32.37% after beating earnings expectations and forecasting stronger-than-expected third-quarter revenue growth.
• AeroVironment gained 5.71% following a Raymond James upgrade on expectations for improving bookings and backlog.

🔴 What’s down

• TSMC slipped 2.32% despite reporting a 77% jump in quarterly profit.
• Alphabet stumbled 4.43% after delaying the release of its new AI model.
• United Airlines fell 1.79% after announcing an earnings beat late yesterday, with investors focused on renewed pressure from higher jet fuel prices.
• GE Aerospace dropped 3.47% as a strong earnings report failed to clear investors’ high expectations.
• AST SpaceMobile tumbled 17.04% on plans to raise $1 billion through a convertible senior notes offering.
• Sweetgreen declined 7.44% as a growing outbreak of cyclosporiasis raised concerns about fresh produce safety.
• SpaceX fell another 3.08% today ahead of its rocket launch tonight, its first launch since its IPO and a key test for the newly public company.

Stats of the day

Consumer conundrum

Morning Brew Design, Photo: Adobe Stock

In periods of mild economic duress, consumers tighten their purse strings and cut back on discretionary spending until the good times roll back around. But when people stop buying groceries, you know it’s getting bad out there.

Several reports published this week raised some eyebrows around the financial world. First, a survey from USAA Federal Savings Bank revealed that 35% of Americans are using credit card reward points to pay for everyday items like food or gas. More people are redeeming points for cash than usual, and fewer are treating themselves to travel or splurging on a big-ticket item.

To drive the point home, a report from Bain & Company using NielsenIQ grocery data revealed that people are buying fewer groceries. According to CNBC, grocery unit sales—which measures individual items sold—sank 1.8% year over year in June, well below 0.1% growth in June 2025. And a poll from Washington Post-Ipsos found that 66% of Americans say they can’t afford groceries, up from 45% in February.

With inflation upping the prices of food and gasoline, and cuts to SNAP benefits hurting lower-income Americans, consumer-staples companies like PepsiCo that can usually endure economic downturns may soon find themselves in a difficult position. On the other hand, this trend could prove beneficial for companies like Walmart that promise discount prices for household essentials just when consumers are looking for a deal.

Now if only you could use credit card reward points to buy stocks.—MR

International

Morning Brew Inc.

Investors hear the same AI names over and over again: Nvidia. SpaceX. OpenAI. But while Wall Street keeps obsessing over Silicon Valley, some of the most interesting developments are happening an ocean away.

China is an obvious place to look for big AI developments, considering the country’s heavy investments in the new technology. For example, domestic companies Alibaba and Baidu each announced new AI partnerships with Apple this week. Alibaba said its Qwen model will power Apple Intelligence across the iPhone, iPad, Mac, and Vision Pro, while Baidu confirmed its search and AI technology will support Apple’s AI features in China.

The partnerships are a win for Apple, too. Shares rose 1.76% today after the company was added to China’s list of approved generative AI providers, clearing another hurdle in one of Apple’s most important markets and strengthening its ability to compete with domestic rivals in China.

Japan’s journey

China isn’t the only country becoming an AI battleground. On Wednesday, Nvidia made the case that Japan’s AI market is rapidly maturing. The chipmaker unveiled its new robotics AI model Cosmos 3 Edge, and announced partnerships with companies including Fujitsu, Hitachi, and Kawasaki Heavy Industries to expand its physical AI ecosystem in the country.

Nvidia also highlighted the expansion of Tokyo-1, Japan’s AI drug-discovery consortium, with major domestic pharmaceutical companies on board to use its AI biology tools. Those include Astellas, Daiichi Sankyo, and Ono Pharmaceutical.

These investments are part of a broader shift, as the country quietly emerges as an AI hub. In April, Microsoft committed $10 billion to building stronger AI infrastructure in Japan, and the country’s AI market is projected to reach nearly $28 billion by 2029.

India joins the race

India is also quietly minting AI winners of its own. Just yesterday, vibe-coding startup Emergent became the country’s second AI unicorn in the past month, after Sarvam AI’s valuation climbed to $1.5 billion following its latest funding round. Emergent says roughly 12 million apps have already been built on its platform.

And it doesn’t stop there: Research firm IDC expects nearly half of Indian organizations to adopt AI cloud services this year, while Bank of America reports that India is now the largest market for the adoption of Gemini, ChatGPT, and Perplexity.

How to play it: As companies look for their next leg of growth, they’ll likely begin looking beyond their own shores and increasingly need local partners to navigate regulations, reach new customers, and tailor AI to different countries. Apple needed Alibaba and Baidu to bring Apple Intelligence to China, while Nvidia is relying on Japanese manufacturers and drugmakers to expand beyond datacenters.

The AI industry has long been centered on the US, China, and South Korea, but it’s quickly expanding further—and investors would do well to keep an eye out for the little-known companies that are preparing to power the AI trade’s next phase.—SY

      

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News

• Chevron is exploring constructing a pipeline for Iraqi oil that would be an alternative to the Strait of Hormuz.
• The movie industry is officially as lucrative this year as it was before Covid-19 thanks to a box-office bounty.
• Trump Media is planning to sell faster access to Truth Social posts.
• The US will impose a 25% tariff on some Brazilian goods.
• The EU is requiring Google to share search data and to open Android to its rivals.
• US retail sales rose just 0.2% in June, well down from the 1% gain in May.

Calendar

Earnings announcements: Travelers Companies, Truist Financial, Regions Financial, and Fifth Third Bank wrap up the first week of earnings season with a bang.

Economic reports: Keep an eye on the import and export price indexes, plus housing starts and building permits, as well as the July University of Michigan consumer survey.

recs

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