• Stocks: The tech-weighted Nasdaq gained as traders bought the dip in the AI trade ahead of earnings this week from Silicon Valley giants like Meta, SpaceX, and Tesla.
• Bonds: Treasury yields rose as investors digested inflation concerns and potential interest rate hikes.
• Commodities: Brent crude oil prices neared five-month highs after Ukraine set oil facilities ablaze in Russia and Houthi militants took credit for attacks on Saudi Arabian infrastructure.

Commodities

Illustration: Morning Brew Inc., Photo: Adobe Stock

In what might be a clerical error from the universe, things are going unusually well in Cleveland. Fresh off a Browns victory on Sunday, the city got another reason to celebrate when Cleveland-Cliffs reported its strongest quarter in three years today, sending shares soaring more than 16%.

The steelmaker swung to a $165 million profit after eight consecutive losing quarters, while adjusted EBITDA more than quadrupled year-over-year to $612 million. Adjusted earnings of 28 cents per share topped Wall Street’s forecast of 21 cents, while revenue rose 18% to $5.6 billion—only slightly missing expectations.

But the real winner was outlook: Cleveland-Cliffs expects to generate more than $4 billion in adjusted EBITDA in 2027, roughly 60% above Wall Street’s $2.5 billion estimate. The company generated just $37 million in all of 2025.

Steeling for optimism

Cleveland-Cliffs’ ambitious forecast reflects a broader recovery in the US steel industry, with several factors positioning the company for a much more profitable 2027:

• Less foreign competition: The Trump administration doubled tariffs to 50% on many steel imports last year. In fact, US finished-steel imports fell 18.5% in the first eight months of 2026, giving domestic producers greater pricing power.
• Higher selling prices: With less pressure from foreign competitors, benchmark US steel prices have climbed to around $1,350 per metric ton from roughly $850 a year ago. Cleveland-Cliffs’ own average selling price rose 14% last quarter.
• More lucrative contracts: Cleveland-Cliffs has secured higher prices and smaller discounts in its 2027 customer agreements, with many incorporating take-or-pay commitments that provide more predictable demand. Management expects renewals to contribute more than $1 billion in additional annual EBITDA.

Now, that spirit is spreading across the industry, with fellow US steelmakers Nucor and Steel Dynamics also trading higher today.

Don’t tempt fate

But Cleveland-Cliffs’ rosy outlook hinges on what management calls “prevailing market conditions,” which aren’t guaranteed to last. Higher steel prices also have hazards: While they boost producers’ profits, they also raise costs for customers, potentially weakening demand. CEO Lourenco Goncalves doesn’t seem worried, though. “Now the problem is no longer price. The problem is having access to steel,” he said in an earnings call.

Wall Street isn’t quite as convinced. Barclays maintained its bearish Underweight rating Monday despite raising its price target to $11, while Jefferies lifted its target to $14 but stuck with Hold. Even Wells Fargo, which upgraded the stock earlier this month on expectations that higher steel prices would drive stronger earnings, has stuck with $14. With shares trading around that level today, the targets leave little room for further gains.

Whether Cleveland’s sudden run of good fortune can survive another year is known only to the universe at large. For now, investors might want to exercise some earthly caution.—SY

      

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Stocks

🟢 What’s up

• Nvidia, Sandisk, and Marvell Technology rallied 1.38%, 5.53%, and 4.06%, respectively, as semiconductor stocks rebounded following nine consecutive losing sessions.
• Amazon climbed 4.98% after Morgan Stanley named it a “top pick”, arguing that the e-commerce giant can benefit from AI even as Meta’s Muse threatens traditional online shopping.
• Datadog jumped 5.36% on a Bernstein upgrade to Outperform thanks to growing demand for its cloud monitoring software amid accelerating AI adoption.
• Intel gained 2.43% following a JPMorgan Chase upgrade to Neutral that argued the stock’s recent selloff has made its valuation more reasonable.
• Victoria’s Secret rose 3.01% after Barclays praised its annual fashion show as a return to the lingerie retailer’s roots.
• Silence Therapeutics surged 125.58% on a roughly $1.3 billion all-cash acquisition by German drugmaker Merck.
• Disc Medicine soared 38.86% after its experimental treatment for a rare light-sensitivity disease met late-stage trial goals, paving the way for FDA approval.

🔴 What’s down

• EyePoint Pharmaceuticals plunged 85.28% after its experimental eye treatment failed a late-stage trial, prompting plans to cut more than half its workforce.
• Unilever fell 1.54% following an agreement to sell its colorful bandage brand Welly to private-equity firm Forward Consumer Partners.

Stat of the day

Homebuilders drop the hammer

Illustration: Shannon May, Photo: Adobe Stock

Construction companies have hit a wall, and they’re not papering over it. New numbers find that homebuilder sentiment is the lowest it’s been in nearly 15 years—and that figure can ripple across the rest of the economy.

The NAHB/Wells Fargo Housing Market Index dropped three points to ‌29 this month, a level that hasn’t been recorded since June 2012. The Middle Eastern energy crisis has sent manufacturing and shipping costs soaring, triggered inflation fears and a mass bond selloff, and sent home-buying costs through the roof.

Coming apart at the beams

That’s the structural assessment of the National Association of Home Builders, which blames mortgage rates well over 7% for slumping spirits. Builders are also battling both energy and tariff-related costs for materials, steeper construction loans, and serious labor shortages. More than a third of companies have reported immigrant enforcement in their area, which discourages legal workers from showing up to shifts, said NAHB Chairman Bill Owens.

For cash-strapped consumers, it’s not the time to take out a home loan, and for builders, it is time to slow down. That can pull back on job prospects for millions—not just site workers, but architects, engineers, real estate agents, skilled trades, and more. And other industries will take a hammering, from raw materials suppliers to furniture and appliance makers.

In summary: Homebuilders’ heavy moods can break open issues well beyond the housing market. If they roll up their blueprints, it may put us all in a hole.—GR

AI

Illustration: Shannon May, Photos: Adobe Stock, Getty Images

It looks like America’s next generation of investors will be building portfolios while holding pacifiers.

Anthropic announced this weekend that it will put 5% of its shares into a new Public Benefit Fund to support nonprofits, make direct payments to population groups, and help address AI’s impact on the labor market. If the Claude developer eventually goes public at a valuation between $1.5 trillion and $2 trillion as estimated, that stake alone could be worth up to $100 billion for the public.

On the heels of the news, Elon Musk argued that Anthropic should just give shares directly to people—and added that he’ll give every American child one SpaceX share next year. At roughly $150 a share for 72 million children, the gift would total about $10.8 billion. (Take that with a few billion grains of salt: Musk hasn’t provided any details on how the giveaway would work.)

The ideas come shortly after the government launched Trump Accounts for children, which save kids money for retirement well before they start working. Suddenly, some of tech’s wealthiest are talking about spreading the money around. The smart question to ask is: Why now?

Sharing the upside

Anthropic has been unusually explicit about the risks created by its technology. The company devoted nearly a third of its IPO prospectus to outlining AI’s hazards, and it’s already committed $200 million to addressing disruption that the tech poses to the labor market. Its new fund specifically lists AI’s impact on workers as a potential use of the money.

Those concerns are getting harder to treat as sci-fi. The IMF warns that AI could shift about 40% of jobs globally, and an even larger share in advanced economies. Meanwhile, companies investing heavily in AI are already citing efficiency gains as they cut jobs or slow hiring. That’s the reality modern labor is facing: As companies using the tech benefit, workers can face fewer jobs, less bargaining power, or financial precarity.

Anthropic’s announcement echoes effective altruism and impact investing, where capital allocation is used to pursue social outcomes. It also gives the company something valuable as it heads toward going public: evidence that its safety-first self-branding comes with actual commitments.

A small stake for mankind

For investors, this matters well beyond philanthropy. If AI meaningfully changes the job market, companies may have to manage a fallout in the form of increased regulation, taxes, or political pressure. And a technology can be enormously effective and still difficult to deploy if it’s resisted by the workers expected to use it.

That makes Anthropic’s fund and Musk’s announcement interesting as a financial signal. The companies are effectively acknowledging that in this industry, managing AI’s social consequences may become part of the cost of doing business. If more tech giants follow, investors may have to evaluate how much companies are willing to share of AI’s economic upside, especially if industry leaders make giving back the norm.

Oppenheimer said physicists who pieced together the atomic bomb had “known sin.” Silicon Valley may know disruption—and put 5% down to pay for it.—HC

      

News

• Farmers are getting hit by a triple whammy of fertilizer shortages, El Niño storms, and record diesel costs that could push US food inflation above 3.5% next year.
• One hacker used AI agents and $5,000 to attack more than 1,200 websites and breach over 100 organizations.
• JPMorgan is putting $5 billion of its equity into US national security, funding companies that handle advanced manufacturing, defense tech, and batteries.
• Digital gold ownership could triple to more than $160 billion as younger investors pile into tokenized versions of the metal.
• Anthropic is pitching Congress on an AI safety bill that could block models posing extreme cyber, biological, or physical risks.
• Massachusetts casinos are fighting a proposal to legalize “historical horse racing” machines that look a lot like slots but are regulated like track betting.

Calendar

After today’s NAHB reading on homebuilder sentiment, we’ll continue with housing starts and pending home sales. SpaceX drops its earnings report, along with Netflix, General Motors, United Airlines, Capital One, Synchrony, Northrop Grumman, Halliburton, 3M, Hasbro, GE Aerospace, RTX, Omnicom, and Chubb Insurance.

recs

🍯 So the S&P 500 may be hiding a few bears. Morgan Stanley analysts see a buying opportunity—and recommend you earmark funds for these specific factors.

⚡ Chase the boom. Here’s how to pick the right energy ETFs to ride out oil supplies.

❣️ Feeling romantic? Goldman Sachs recommends these 23 unloved stocks while tech grabs all the admirers.

🔛 Short sell, long view. Michael Burry of The Big Short fame gave followers his top ten lessons for living (and investing) wisely.

🤸‍♀️ Streeeeetch it out. Speaking of wisdom, here’s some key advice for how to easily make your money last through retirement.

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