Zuck has some explaining to do.

Today, Meta Platforms CEO Mark Zuckerberg testified in Los Angeles in a landmark social media safety trial—one of several high stakes trials playing out across the country over allegations that the platforms harm children.

• The trial Zuck testified in today focuses on whether Meta’s platforms like Instagram are addictive for kids.
• A separate trial in New Mexico will examine whether Meta failed to prevent sexual exploitation of minors.
• This summer, a similar trial is expected to kick off in California, over whether Meta and other platforms have led to mental health issues in young users.

Zoom out: For years now, criticism has been building over social media’s role in skyrocketing rates of mental illness among young people. These trials are considered bellwethers, meaning how they end could indicate how thousands of others across the country do. And don’t forget, countries like Germany, Spain, and the UK are considering banning social media for children as well—judgements stateside could go a long way to determining the fate of social media around the globe.

Meta, of course, denies that its products are the source of harm. Last week, Instagram CEO Adam Mosseri took the stand, disputing the notion that people can become clinically addicted to social media, comparing Meta’s products to bingeing Netflix shows.

The $11 billion fallout

If social media companies lose in court, there could be huge fines levied against Meta, TikTok, YouTube, and Snap, or even forced redesigns of their platforms. Another punishment could be an amendment to a law passed in 1996 called Section 230 that absolves social media companies of liability for content posted on their platforms.

The financial hit is nothing to scoff at, either. According to a Harvard study, social media companies made $11 billion from ads targeted at youths in 2022, with Instagram raking in $4 billion alone. But still, that’s not much compared to the $196 billion in ad revenue that Meta reported last year.

The big picture: If this really is a “Big Tobacco" moment for social media companies, the financial consequences of a loss in court may be overshadowed by how their role in society could be reshaped entirely.—LB

🟢 What’s up

• Nvidia rose 1.63% on the news that it expanded a partnership with Meta Platforms, supplying millions of Blackwell and Rubin GPUs, along with CPUs and networking gear.
• Tesla avoided a 30-day sales suspension in California after removing the term ‘Autopilot’ from its marketing language. Shares added 0.14% today.
• Snap gained 3.06% as its direct-revenue business reached a $1 billion annualized run rate, driven by growth in Snapchat+ subscriptions.
• Moderna surged 6.08% after the FDA agreed to review its flu vaccine, reversing last week’s rejection.
• In other buffalo wing news, Wingstop jumped 10.84% as fourth-quarter adjusted earnings topped estimates despite revenue missing forecasts.
• Caesars Entertainment climbed 13.03% on a fourth-quarter beat, with digital EBITDA rising sharply year over year.
• Palantir Technologies gained 1.77% after Mizuho upgraded the stock to Outperform, citing standout revenue growth and expanding margins.

What’s down

• Palo Alto Networks fell 6.82% as weak profit guidance for the current quarter overshadowed stronger-than-expected recent results.
• Waste disposal company Republic Services dropped 2.04% after issuing a softer-than-expected 2026 earnings and revenue outlook.
• Semiconductor manufacturing equipment maker Axcelis Technologies tanked 16.74% following lower-than-expected first-quarter guidance.

MSG just pulled off a slam dunk—on Wall Street.

The board of Madison Square Garden Sports Corp. has unanimously signed off on a proposal to explore separating the New York Knicks and New York Rangers into standalone entities, a move that sent shares of MSG up 16.36% as investors reconsidered what each franchise might be worth on its own.

Forbes values the Knicks at about $9.75 billion and the Rangers at $4 billion, together more than $13 billion—yet MSG’s total market cap was just over $7 billion at yesterday’s close. That discount has persisted for years, partly due to owner Jim Dolan’s control and the perception that the teams weren’t for sale. MSG also produces relatively modest earnings, pays no regular dividend, and hasn’t bought back shares since fiscal 2023.

A split could narrow the gap by giving each team clearer financial visibility and opening the door to minority (or majority) investments.

“Both the Knicks and Rangers are premier teams in their respective leagues, with storied histories and large and passionate fan bases. We believe this proposed transaction would provide each company with enhanced strategic flexibility, its own defined business focus, and clear characteristics for investors,” CEO Jim Dolan said in a press release.

The Knicks and Rangers may not win every season, but they might finally win over Wall Street.—SY

For more details about what splitting the Knicks and the Rangers into separate stocks might mean, listen to today’s episode of the Brew Markets podcast.

Young Americans who’ve been saving up to buy a house are crying uncle—and pinning their hopes (and cash) on stocks instead.

The JPMorgan Chase Institute found that the percentage of 25- to 39-year-olds funnelling money into investment accounts each year more than tripled from 2013 to 2023 to 14.4%. The data also shows that the percentage of 26-year-olds who moved money into investment accounts after they turned 22 (not including 401ks) climbed from 8% in 2015 to 40% last year.

So, where are all these investment funds coming from? George Eckerd, JPMorgan research director for wealth and markets, noticed that many young and lower-income investors have turned their attention away from the housing market and to the stock market. “We’ve seen surprisingly strong growth in retail investing in recent years among people who may otherwise be first-time home buyers,” he told the Wall Street Journal.

This pivot from real estate to Wall Street makes sense given the market’s recent record-setting returns, while the boom in trading apps also made jumping into stocks easy—and fun. Why toil for years fattening up a down payment fund when you can toss some change into Robinhood and get an instant thrill watching your bets take off?

Run the numbers: Emotions aside, the math pencils out, too.

Moody’s Analytics crunched the numbers for the Wall Street Journal on two hypothetical earners making $150,000 a year. One buys a $500,000 house with 20% down at a 6.25% mortgage rate; with insurance, taxes, and maintenance, they’ll pay $3,546 per month on a property expected to appreciate 4% annually. Meanwhile, the renter leases a similar home for $2,500 (with 3% yearly increases) and invests the monthly savings in stocks earning a 10% return.

After 30 years, the renter has amassed a net worth of $2,815,825. The homeowner, even with the house, is way behind with just $1,621,699.

The rent-vs-buy tradeoff in real life

Although this comparison is compelling, there’s a lot missing in that math. First, returns on stocks and real estate are extremely variable. Markets are going gangbusters for now, but what happens the day they don’t? Another consideration is leverage: Homeownership gives you the keys to a half-million-dollar asset for the relatively low cost of a down payment.

The human condition is highly unreliable, too.

“Where the narrative breaks down in practice is that many renters who say, ‘I’ll just invest the difference’ never do it consistently,” Dominick Ertmann at Proper Lending Group told Brew Markets. “The rent-and-invest strategy only works if the investing happens with discipline.”

Bottom line: Although stocks may seem like a more hopeful place to park your money now, that could change.

“I’ve seen how higher home prices and mortgage rates have pushed many buyers to reconsider their priorities, but for many, the most effective strategy isn’t choosing one over the other,” says Ertmann. “It’s using homeownership as a leveraged foundation and continuing to invest in equities alongside it.”

In other words, there’s no need to swear off Zillow surfing (or your weekly dose of real estate inspo from The Playbook, either).—JD

• Retail traders who want to invest in SpaceX and Anthropic will finally get a chance thanks to a new fund.
• US stocks are off to their worst start of the year when compared to global stocks since 1995.
• White House economic advisor Kevin Hassett said the authors of a Fed paper finding that consumers and companies are absorbing the high costs of tariffs should be “disciplined.”
• Billionaire retail mogul Les Wexner testified that he was “duped” by Jeffrey Epstein.
• Over 50% of enterprise software could be replaced with AI, according to Mistral AI’s CEO.
• Here’s why low taxes on the ultra-wealthy are creating economic problems.

Economic reports: We’ve got the usual initial jobless claims report, as well as some US trade deficit data from December. Plus, there’s the Philly Fed manufacturing survey for February, and the Pending Home Sales Index for January.

Earnings announcements: Walmart, Nestlé, Airbus, Rio Tinto, Deere, Newmont, Lemonade, Etsy, Yeti, Opendoor, Dropbox, Live Nation Entertainment, Pernod Ricard, Wayfair, Renault, and Klarna