Latest / Key Markets & Headlines / Key Markets & Headlines — Thursday, May 14, 2026
Transcript
- Key markets and headlines for today. The most market-moving story this morning comes from the Federal Reserve. The US Senate has narrowly confirmed Kevin Warsh as chair of the Federal Reserve, marking the most contentious leadership transition at the central bank in decades and raising questions about the Fed’s political independence. The final vote was fifty-four to forty-five, the slimmest margin ever for a Fed chair, reflecting deep polarization in Congress and significant concern among Democrats that Warsh may be inclined to yield to President Donald Trump’s demands for rapid interest rate cuts. Warsh has pledged to maintain the Fed’s strict independence, but Trump has been vocal in his expectation that borrowing costs should be lowered immediately. Warsh has also indicated an intention to shrink the Fed’s six point seven trillion dollar balance sheet over time. This leadership change comes at a critical juncture for US monetary policy, with markets watching closely for any signs of a shift in the Fed’s approach to inflation and economic growth. Turning to macro and geopolitics, tensions between the US and China have flared once again. Chinese President Xi Jinping issued a direct warning to Donald Trump, cautioning that mishandling the Taiwan issue could lead to conflict and push the entire China-US relationship into a highly dangerous situation. Xi described Taiwan as the most important issue in China-US relations, according to official Chinese media. While a one-year trade truce has stabilized ties recently, Taiwan remains a major flashpoint. The American readout of the meeting focused more on economic issues, including market access for US businesses and China’s interest in purchasing more US energy and agricultural products. In the Middle East, US efforts to end the war with Iran have suffered a setback after a commercial vessel was seized by unauthorized personnel near the United Arab Emirates. The ship, whose identity has not been confirmed, was taken thirty-eight nautical miles off the UAE coast and is now reportedly bound for Iran. This incident comes amid an uptick in shipping through the Strait of Hormuz, a critical chokepoint for global oil and liquefied natural gas supplies. The strait’s effective closure since the US and Israel began bombing Iran in late February has disrupted energy markets and led to global supply shortages. US Secretary of State Marco Rubio has urged China to use its influence to persuade Iran to reopen Hormuz, warning that a prolonged closure threatens economies worldwide, including those that are major export markets for China. In South Korea, euphoria is sweeping the country’s stock market, now valued at four point six trillion dollars. The Kospi index has surged two hundred percent over the past year, far outpacing every other market globally. Local investors are borrowing record sums to leverage their bets, with margin balances hitting a record thirty-six point three trillion won earlier this month, up thirty-two percent since December. Trading volumes have hit all-time highs, and daily price swings of five percent or more have become common, making the Kospi the most volatile major stock index in the world. The leverage-fueled rally has propelled South Korea to become the world’s seventh largest market, with Samsung surpassing the one trillion dollar valuation mark. Venezuela has hired Centerview Partners as a financial adviser as it embarks on one of the world’s largest-ever debt restructurings. The government plans to rework an estimated one hundred seventy billion dollars of defaulted bonds and loans, including sovereign and state oil company debt. This move sets the stage for one of the most extensive debt restructurings since the Greek crisis more than a decade ago. Venezuela says it will release a macroeconomic framework and a debt sustainability analysis next month, signaling an intent to move quickly. However, current sanctions still prohibit Venezuela from engaging in talks with creditors. Now, shifting to equities and corporate news. Amazon has announced another round of job cuts, this time affecting its Selling Partner Services organization, which works with third-party merchants on onboarding, logistics, and account support. These layoffs follow roughly thirty thousand job cuts across waves in October and January, as well as additional reductions in Amazon’s robotics division in March. The company described the latest cuts as affecting a small number of employees after an organizational review. CEO Andy Jassy continues to drive efficiency and expand investments in artificial intelligence across retail operations, customer service, advertising, and logistics. Jassy has said that AI will allow Amazon to operate more efficiently over time and could help reduce the company’s workforce. Anthropic has launched Claude for Small Business, a toggle install for tools commonly used by small business owners. The suite includes integrations with Intuit QuickBooks, PayPal, HubSpot, Canva, DocuSign, Google Workspace, and Microsoft 365. According to Anthropic, the tools can help with payroll, closing the month, running sales campaigns, chasing invoices, and more. Byron Allen is making headlines with his plan to acquire a fifty-two percent stake in BuzzFeed, the struggling online media outlet. Allen aims to transform BuzzFeed into a free-TV super app that combines news, weather, and entertainment content. He plans to leverage his experience running Local Now, a free streaming service, and will create new shows as well as license existing movies and TV programs for a share of advertising revenue. Allen also hopes to expand BuzzFeed’s shopping channel and use artificial intelligence tools to increase user-generated content on the app. Cerebras Systems, the artificial intelligence chipmaker, is set to price its US initial public offering at one hundred eighty-five dollars per share, according to people familiar with the matter. Cerebras marketed thirty million shares in the IPO, raising the price range and number of shares earlier this week. At this price, the listing would raise five point five five billion dollars and give Cerebras a market value of about forty billion dollars. The IPO has attracted orders for more than twenty times the number of shares available. Cerebras is positioning itself as a challenger to Nvidia in the AI chip space. Both Arm and its majority owner SoftBank Group have expressed preliminary interest in acquiring Cerebras in the past two months, but the company has reportedly rebuffed those advances. Cisco Systems surged as much as nineteen percent in late trading after delivering a better-than-expected sales forecast and announcing plans to cut thousands of jobs to focus on the fast-growing AI market. Cisco projects revenue of sixteen point seven to sixteen point nine billion dollars in the fiscal fourth quarter, well above analyst estimates of fifteen point eight billion. CEO Chuck Robbins said the layoffs, which will affect fewer than four thousand jobs, are necessary to refocus the company for the AI era. DayOne Data Centers is considering upsizing its Series C funding round to more than four billion dollars amid strong investor interest in assets supporting the artificial intelligence boom. This would double the size of its previous closing in January. DayOne, which was close to filing confidentially for a US listing in March, is now focused on completing the upsized round before deciding on an IPO timeline. The company is also in talks with investment banks about raising a one billion dollar revolving credit facility to fund expansion. The surge in AI demand has made data centers a prime target for investors seeking exposure to critical digital infrastructure. GameStop CEO Ryan Cohen has written to eBay’s board chair, Paul Pressler, saying that the company dismissed his takeover offer without engaging on its substance. Cohen intends to put the offer directly to shareholders after his request to meet eBay’s board was rejected, according to the Financial Times. GoPro has retained investment bank Houlihan Lokey to assist with its review of strategic alternatives, including a possible sale. The move comes days after GoPro announced it was initiating a strategic review and had received multiple unsolicited offers from defense and consumer-facing companies. GoPro is aiming to expand into the defense industry and highlighted Houlihan’s expertise in that sector. CEO Nicholas Woodman said he fully supports the effort to review a potential sale to maximize shareholder value. GoPro shares closed at one dollar and nine cents on Wednesday, giving the company a market capitalization of one hundred eighty-seven million dollars. ITV remains in active discussions to sell its Media and Entertainment unit to Sky, according to its first-quarter trading update. The British media company confirmed in November last year that it was in preliminary talks with the Comcast-backed group for a potential sale valued at one point six billion pounds sterling. French AI startup Mistral AI is in talks with European banks about deploying its answer to Anthropic’s Mythos, the limited-access AI model that can uncover cybersecurity vulnerabilities at unprecedented speed and scale. Mistral has been developing its own cybersecurity-focused AI model and has held discussions with the European banking sector about its rollout. Europe’s banks, lacking access to Mythos, are under pressure to detect and fix vulnerabilities that could be exploited by AI tools. Mistral was already working with banking clients on using AI to uncover security flaws before Mythos’s release and is now developing an off-the-shelf version for broader deployment. Modal, a serverless cloud platform that enables developers to run compute-intensive workloads in AI and machine learning directly from Python code, is seeking a four point five billion dollar valuation, an eighty percent premium to its last round. The startup’s annualized revenue has surged to around three hundred million dollars. Modal’s last confirmed capital raise was an eighty-seven million dollar Series B round in September last year, led by Lux Capital, which valued the company at one point one billion dollars. Microsoft has spent more than one hundred billion dollars on its partnership with OpenAI, underscoring the software giant’s central role in the AI company’s growth. This figure includes Microsoft’s original investments in OpenAI as well as the costs of building infrastructure and hosting OpenAI’s computing. Many of these costs were incurred before Microsoft received any revenue from the partnership. Microsoft invested about thirteen billion dollars in OpenAI through early twenty twenty-three and has been its primary cloud infrastructure provider. Last week, CEO Satya Nadella said the company is targeting a ninety-two billion dollar return from its early investments in OpenAI. In addition, Microsoft is exploring acquisitions of AI startups as it looks to diversify its AI portfolio and reduce reliance on OpenAI. However, concerns over regulatory scrutiny led Microsoft to abandon talks to acquire Cursor, due to overlap with GitHub Copilot. The company is now in discussions with Inception, a small startup founded by a Stanford University team that focuses on a different method of developing large language models. SpaceX has also expressed interest in Inception, which has hired a bank to help negotiate a deal and is seeking a price of over one billion dollars. Netflix has expanded its presence in American football, picking up three additional National Football League games for the upcoming season. Netflix will air the league’s first-ever game in Australia, a matchup between the Los Angeles Rams and the San Francisco 49ers, as well as the NFL’s first Thanksgiving Eve game on November twenty-fifth and another game on January ninth. The deal extends Netflix’s relationship with the NFL through the twenty twenty-nine season. Bloomberg Intelligence estimates Netflix could be paying as much as five hundred million dollars a year for these rights, as the company seeks to attract advertisers and boost ad revenue. Netflix plans to spend about twenty billion dollars on content in twenty twenty-six, including sports. Productivity software maker Notion has introduced a new developer platform that extends the capabilities of its custom AI agents, connects with external agents, and allows teams to build automated multistep workflows that can pull in data from any database. By building an orchestration layer that coordinates AI work across multiple tools and data sources, Notion is positioning itself as more than just a note-taking app with AI features. Since launching Custom Agents in February, Notion customers have built over one million agents. The new Developer Platform allows teams to deploy their own custom code through Workers, a cloud-based environment for running logic and integrating external data. This shift positions Notion to compete with other workflow automation platforms. The US has cleared around ten Chinese firms to buy Nvidia’s H-two hundred chips, but no deliveries have been made so far. Among the companies approved by the US Commerce Department are Alibaba, Tencent, ByteDance, and JD.com, as well as distributors including Lenovo and Foxconn. Each approved customer can purchase up to seventy-five thousand chips under US licensing terms. However, deals have stalled despite US approval, with Beijing reportedly pressuring companies to block or tightly screen the orders over concerns that imports could undermine efforts to develop homegrown AI chips. Rakuten reported first-quarter operating income of thirty point three nine billion yen, beating the average analyst estimate of thirteen point five nine billion yen. Net sales totaled six hundred forty-three point five eight billion yen, exceeding the consensus estimate of six hundred fourteen point six seven billion yen. The mobile segment posted a loss of forty-eight point two billion yen, an improvement from a loss of fifty-nine point three nine billion yen a year earlier. Net loss came in at eighteen point six five billion yen, better than the estimated loss of twenty-three point two four billion yen. Rivian’s spinoff Mind Robotics has raised another four hundred million dollars, just two months after raising five hundred million, as it develops industrial robotics to further automate factory operations. The funding round was led by Kleiner Perkins, with investments from the venture arms of Volkswagen and Salesforce. The new round brings the total raised to more than one billion dollars and values Mind Robotics at over three billion. Rivian CEO RJ Scaringe, who is chairman of Mind Robotics, said the company aims to build robotics with human-like skills. Uber is set to establish its first data center in India in partnership with Adani Group, marking a significant step in expanding its technology and engineering presence in one of its fastest-growing markets. The new facility is expected to become operational later this year. Uber already operates large engineering and technology teams in India, with centers in Bengaluru and Hyderabad. For Adani Group, the partnership adds to its growing ambitions in digital infrastructure, including data centers and cloud services. Andreessen Horowitz is making its first investment in the Gulf region, leading a twenty-five million dollar Series A round for Riyadh-based enterprise software firm Stitch. The proceeds will be used for product development and regional expansion. Existing investors Arbor Ventures, COTU Ventures, Raed Ventures, and SVC also participated. Stitch aims to challenge traditional banking software providers by helping financial services firms onboard customers, monitor transactions, and manage financial products on its platform. RBC Capital has downgraded Wix.com to Sector Perform from Outperform, with a price target of sixty dollars, down from ninety. RBC cited a very challenging first quarter and admitted to underestimating the sustained margin compression Wix would face as AI-powered coding tools proliferate in traditional web design. While the stock already reflects significant headwinds, RBC warns that the earnings report could represent only the midpoint or even the beginning of core business risk, with key customer value yet to be proven and unlikely to show up before next year. Walmart is repurposing former pharmacies, thrift stores, and other small spaces in local communities as last-mile stockrooms to speed up delivery in its battle with Amazon for grocery market share. Over the past year, Walmart has opened at least three so-called Walmart Depots in Dallas, New Jersey, and Arkansas. Potential future locations include former Rite Aid pharmacies in New York and California and a former Goodwill store in Virginia. Walmart is in talks to open more depots in the New York metropolitan area, Florida, Nevada, and the Pacific Northwest. The company says these depots are a new way to deliver faster to more people. The WNBA and NBA board of governors have unanimously approved the sale and relocation of the Connecticut Sun franchise from the Mohegan Tribe to Houston Rockets owner Tilman Fertitta. The Sun will play the remainder of the twenty twenty-six season in Connecticut before relocating to Houston for the twenty twenty-seven campaign. The sale, reportedly set at three hundred million dollars, is a record price for a WNBA team and does not include a relocation fee. Fertitta is the latest NBA owner to acquire a WNBA team, and the sale is expected to close soon. XAI, Elon Musk’s artificial intelligence venture, has recruited several Wall Street firms, including Apollo Global Management and Morgan Stanley, to test its Grok chatbot as part of a push to boost revenue ahead of parent company SpaceX’s initial public offering. These firms have begun using Grok internally alongside software from other AI model makers. XAI is moving quickly to increase revenue by selling chatbot subscriptions and access to its computing resources before SpaceX’s expected IPO next month. Much of XAI’s sales so far have come from deals with Musk’s other ventures, including SpaceX and Tesla. However, Grok’s tools are widely viewed as inferior to those of OpenAI and Anthropic for the finance industry. Inside XAI, staff have been told that training Grok for finance is a priority, with personnel being shifted to focus on this effort. In a separate development, XAI is operating nearly fifty natural gas turbines at its Mississippi data center, power plants that the state is currently not regulating due to a loophole. The turbines are considered mobile because they are mounted on flatbed trailers, allowing them to avoid air pollution regulations for one year. The NAACP has filed a lawsuit on behalf of local residents, arguing that unchecked emissions from the turbines are worsening air quality in an already polluted region. The Southern Environmental Law Center, representing the NAACP, says the turbines are being operated in violation of federal law. XAI has been granted permits for fifteen of its turbines. Turning to event-driven news, Fervo Energy saw its market valuation surpass ten billion dollars in its public market debut, driven by demand for AI data centers and the energy needed to power them. Fervo raised one point eight nine billion dollars in an upsized initial public offering, initially valuing the company at around seven point six billion dollars before the stock surged another thirty-three percent in early trading. Like other energy companies, Fervo has benefited from surging demand from data centers and AI companies seeking reliable electricity supply. The IPO generated about five hundred million dollars more than expected, giving Fervo additional flexibility as it develops its Cape Station power plant in Utah. Hewlett Packard Enterprise, which has been under pressure from Elliott Management, has seen more activist investors take stakes in the company. Irenic Capital is among the new activist funds with positions in HPE and has discussed its holdings and frustrations with company executives. Fitch Ratings has placed the authority’s senior and subordinate transportation system revenue bonds on Rating Watch Negative, citing the financial impact of Spirit Airlines’ exit from Atlantic City International Airport. Spirit accounted for about seventy-six percent of passenger traffic at the airport, leaving the facility without daily commercial service after Spirit Aviation Holdings shut down earlier this month following a failed emergency funding effort. While other carriers are expected to help offset some of the service cuts, Fitch said the authority’s operating deficit could widen, weakening its financial position. A downgrade could follow if the airport fails to replace Spirit’s traffic, leading to larger deficits and pressure on cash flow. Now, let’s take a look at some notable data points and charts from the markets. The US Misery Index, which combines year-over-year consumer price inflation and the unemployment rate, increased for a fourth consecutive month in April and now sits at a three-year high. This suggests that inflation and joblessness are both weighing on American households more heavily than at any point since the pandemic recovery. In the bond market, US ten-year Treasury yields are creeping higher as investors demand a greater premium for inflation risk. This trend reflects growing concern that inflation may prove more persistent than previously expected, prompting investors to seek higher returns to compensate for the risk. There are also worrying parallels with the energy shocks of the nineteen seventies. The last mile of fighting inflation is proving to be a marathon rather than a sprint, as energy prices remain volatile and central banks struggle to bring inflation back to target. Finally, a visual on South Korean equities highlights the extraordinary surge in the country’s stock market over the past eighteen months, underscoring the leverage-fueled rally and the growing risks of volatility. That’s a comprehensive look at today’s key markets and headlines. Thanks for listening.