• Stocks: The Nasdaq led a market-wide rebound today, powered higher by a chip-stock surge. The Nasdaq and the S&P 500 both enjoyed their best day of trading since early August.
• Bonds: The waiting is over, and bond yields fell as traders began to accept that the Fed may push rates even higher later this year. But one person isn’t going quietly: President Trump.
• Commodities: Oil sank after Saudi Arabia promised to provide more crude via the Strait of Hormuz to make up for its closed pipeline. But prices recouped some losses later in the afternoon after Trump hinted that he is going to make a “big decision” about Iran soon.

crypto

Morning Brew Inc., Photo: Adobe Stock

Just two days after the Senate failed to advance the Clarity Act, the SEC unveiled its counterplan: the Innovation Exemption, a five-year exception that will let approved platforms trade tokenized versions of US stocks.

“The Innovation Exemption is designed to resolve challenges that have prevented responsible innovation from taking root in the United States while providing investor protections and market integrity standards,” SEC Chair Paul Atkins said in a statement.

WTF is a tokenized stock? It’s a digital token on a blockchain that represents ownership in a real company share. Instead of your Nvidia stock existing only inside the traditional brokerage system, an equivalent token could be bought and sold on blockchain-based platforms—potentially around the clock, and with much faster settlement. In short: crypto-style trading of US stocks.

Token trouble

AMC Entertainment CEO Adam Aron recently went after Robinhood for offering a tokenized version of AMC stock without the company’s involvement, mincing no words as he called the practice “contemptible, outrageous, disgusting, detestable, inexcusable, vile.” Investors buying third-party tokens aren’t getting actual shares or the same voting rights and shareholder protections, and tokenization may also siphon trading activity away from the actual stock—making it harder for companies to raise money from investors.

The SEC’s new framework is meant to address some of those concerns: Approved tokenized stocks must carry the same rights as their traditional counterparts, and companies will have the ability to object to having their shares tokenized in the first place.

Say goodbye to the closing bell

Thanks to its Project Crypto initiative, the SEC has been working toward today’s announcement for more than a year—and its decision to keep moving even after the Clarity Act stalled shows how motivated the agency is to bring traditional financial markets “onchain” (onto blockchain rails).

That’s great news for crypto companies like Robinhood, Coinbase, and Kraken, who could benefit from more trading activity—and the custody and transaction fees that come with it. Traditional Wall Street firms are also moving in, with Nasdaq recently investing in Kraken parent Payward as part of a broader push into tokenized markets.

But before you eager day traders cancel your weekend plans, know that this is still a small experiment: Tokenized stocks remain just a tiny corner of the market.—SY

      

Sponsored By Nasdaq

Built on one of the world’s most recognized innovation benchmarks, Nasdaq-100 Index® Options allow investors to participate in innovation-driven growth while managing exposure with greater precision.

From hedging risk to generating income to accessing the companies shaping tomorrow’s economy, investors are increasingly turning to NDX® and XND® as part of a more resilient approach to investing.

In a new episode of the Blueprint of Tomorrow series, hear directly from leading market experts as they discuss the evolution of retail investing, the rise of options trading, and why Nasdaq-100 Index® Options can provide a smarter way to access innovation.

Discover how investors are building a more resilient blueprint for the future.

Stocks

🟢 What’s up

• Workday jumped 6.14% on reports that efforts to finance a potential take-private deal are moving forward.
• Lucid climbed 5.94% following a partnership inked with Bolt to develop autonomous driving technology in Europe.
• Vital Farms rallied 16.65% on reports that the egg producer is exploring a potential sale or take-private deal.
• Nokia rose 4.69% after expanding its partnership with Microsoft to bring more AI tools to telecom providers.
• Generac surged 18.34% on a deal to supply Amazon data centers with $2.4 billion worth of backup generators through 2028.
• Arm advanced 8.57% as management expressed growing confidence that it can meet demand for its new data center chip.

🔴 What’s down

• Boeing fell 2.46% after its CEO said 737 MAX production remains unstable, pointing to problems with wing production.
• Paramount Skydance fell 4.63% after Barclays flagged major risks surrounding its proposed $110 billion merger with Warner Bros. Discovery.
• DraftKings fell 7.64% after data showed that rival Kalshi captured 76% of sports and parlay prediction-market trading during the NFL’s opening week.
• Fluence Energy tumbled 15.36% after cutting its full-year revenue outlook amid delays at a new manufacturing facility in Houston.
• CoreWeave sank 4.16% on plans to raise $3.5 billion in convertible debt and potentially sell another 35 million shares, adding to concerns about its already-heavy debt load.

Call of the day

Are stocks losing steam?

Morning Brew Inc.

Wall Street has undeniably been on a winning run in 2026: Since hitting a low at the end of March, the S&P 500 has gained 20%. Along the way, the index has set nearly as many records as Michael Phelps—it reached 27 new highs this year alone.

But even the hottest winning streak has to end. This week, a slew of major Wall Street suits are starting to think it’s time to put away your banners and medals.

• Wells Fargo became the first major bank to cut its year-end S&P 500 target on Tuesday, lowering it to 7,700 from 7,950, and explained that investors may start anticipating a slowdown in earnings growth.
• Strategist Ed Yardeni slashed his forecast today, cutting his year-end target from 8,400 down to 7,900, and pointed to surging Treasury yields and other macro factors as opposed to a downturn in corporate profits.
• Savita Subramanian, head of US equity and quantitative strategy at Bank of America Securities, told Bloomberg TV today that she thinks stocks are overdue for a pullback. “It doesn’t feel like a really robust market environment,” Subramanian said.

In some ways, perhaps the bigger surprise isn’t that Wall Street is having doubts, but that these skeptical takes haven’t come sooner. After all, inflation is swelling, consumers are feeling the pressure, and—lest we forget—AI experts themselves think the technology may be on its way to murdering us all.

But instead of ending on that note, we’ll add that not everyone is so pessimistic. Citadel just came out with a fairly bullish take on the current market, arguing that while there may still be some jitters in the near future, stocks will bounce back in October.

The big picture: Whether this moment is a buying opportunity or a canary in the coal mine remains a question even the smartest stock experts can’t seem to agree on.—LB

Morning Brew Inc, Photos: Sean Gallup/Getty Images, Michael M. Santiago

Earlier this month, OpenAI said it solved one of the Millennium Prize Problems, a set of advanced mathematical conundrums. Answering the equation earned the company the $1 million prize that goes with it. Just one issue: It cost OpenAI $15 million in tokens to solve the darn thing.

That’s a perfect encapsulation of the problem with AI economics: High costs have yet to yield high rewards. Industry leaders are arriving at the realization that they may never reach profitability, and they’re beginning to freak out. This week we may have learned how they plan to deal with it: Freak everyone else out instead.

Repeat after us: regulatory capture

As anyone blindsided by their bill for AI tokens will tell you, it’s not cheap to run advanced models. Frontier startups like OpenAI are burning cash at an alarming rate—the company brought in $13.1 billion in net revenue last year, but posted a net loss of $38.5 billion—which is why they’re sprinting to raise money in an IPO.

Don’t forget that earlier this week the Financial Times reported that Anthropic is telling investors its gross margins are above 80%—if you ignore expenses like training its AI models, which, you know, seem like they might be important for the AI company.

At the same time, Chinese open-source models like Zhipu’s GLM and Alibaba’s Qwen are providing 95% of the same capabilities as OpenAI and Anthropic, but at a fraction of the cost—which will only continue to wear down US startups’ margins.

That’s why Anthropic CEO Dario Amodei’s warning-bell essay about slowing AI advances in the name of safety raised eyebrows among skeptics wondering about other motivations. An elegant solution to his competition problem is regulatory capture, or building a moat around his business with government regulations. Citing AI doom and gloom to ban Chinese competitors, wipe out smaller startups who can’t afford compliance, and slow the entire industry is a far less expensive way to keep his company on top.

Or, as French Finance Minister Roland Lescure noted yesterday: “I can clearly see that the calls to slow down are now coming from ​those at the top of the class [...] Making everyone behind ​them slow down so they can stay in first place.”

Pace the frontier

Today, we got more reports from OpenAI of previously undiscovered instances of “concerning behavior” among its models. Expect more alarm-bell headlines about AI cybersecurity incidents in the days ahead, but keep in mind that they may not just be due to the growing capabilities of large language models.

They also present an opportunity for AI leaders to keep calling for a slowdown—buying them the time they desperately need to figure out how they can turn a profit.—MR

      

News

• While the world grapples with inflation and geopolitical conflict, energy traders are profiting big from rising oil prices—and partying hard.
• The White House has reportedly drafted a proposal to pay parents to take care of kids, but there’s a catch: You have to be married to qualify.
• You can now DoorDash Costco to your front step.
• Nvidia CEO Jensen Huang expects to sell twice as many chips next year.
• A bipartisan bill aimed at lowering data center utility costs just hit a roadblock in the Senate.
• This is how soaring energy prices will actually tear through the economy.

Calendar

We’ll have a quiet day tomorrow on the calendar, get off your computer and touch some grass.

recs

💭 Back in our day, being a millionaire used to mean something. Now it’s not enough to crack the top 10%—and the actual number it takes might surprise you.

⚾ Sports team valuations are swinging for the fences. But this pro baseball stock pick could help you steal a few bases.

🏖️ Taking the path to early retirement? Follow this guide to figure out how much you can safely withdraw.

🪜 Climb that ladder. Here’s the net worth you need to join the “upper class” in your golden years—along with one thing you can do right now to get there.

🤸 So you’re planning your own Year of Freak. If you’re looking to live abroad, be advised that you can’t escape these US tax obligations.

^{*A message from our sponsor.}

This time last week...

🤖 Readers’ most-clicked story was about how AI will apparently kill us all (and how it would actually happen).