Latest / Key Markets & Headlines / Key Markets & Headlines — Wednesday, July 1, 2026
Transcript
- Key markets and headlines for today. The most market-moving story this morning is the Federal Reserve’s shifting rate outlook, which is sending ripples across asset classes. Traders in the fed funds market are now ramping up bets that the Fed could start raising interest rates as soon as July, a move that would have been unthinkable just weeks ago. While the chances of a rate hike at next month’s policy meeting remain low, interest rate swaps are now pricing in about nine basis points of a quarter-point hike, or roughly a thirty-six percent probability. Open interest in August fed funds futures has climbed rapidly since the June seventeenth policy meeting, and the aggressive build-up of new positions is skewed toward sellers, suggesting that traders are shorting the contract. This means they stand to benefit if odds of rate increases continue to rise. The market’s focus will be on upcoming economic data, which could either cement or derail these expectations. Turning to equities, there’s a lot of corporate news and market rotation to cover. Apple remains in the spotlight on two fronts. First, CEO Tim Cook and European Union tech chief Henna Virkkunen had what both sides described as “constructive” discussions on Tuesday, as they try to lower tensions in a dispute over Apple’s new Siri AI. The virtual meeting included talks about how Apple can launch its reinvented Siri in Europe while avoiding millions of dollars in fines for violating the bloc’s competition rules. Both parties say work is ongoing, and the outcome could shape how Apple rolls out AI features across the continent. Separately, the Supreme Court has agreed to hear Apple’s appeal challenging a contempt ruling in its long-running App Store dispute with Epic Games. The case centers on whether Apple violated a prior court order requiring broader access to alternative payment options, and the decision could have major implications for App Store economics and developer rules going forward. Amazon Web Services is making a major push into agentic AI deployments. On Tuesday, AWS announced the launch of a dedicated Forward Deployed Engineering organization, backed by a one billion dollar investment. The new unit is designed to embed agentic AI into customer deployments, compressing deployment timelines from months to days and helping clients become self-sufficient after implementation. AWS says the FDE model is already working with customers like the NBA, Southwest Airlines, and the NFL. This move targets organizations that have moved beyond AI experimentation and need production systems embedded in real business workflows. Anthropic, the AI startup, is also making headlines. The U.S. government has removed foreign access restrictions on Anthropic’s Fable 5 AI model, clearing it for wider distribution after the company resolved safety concerns raised by the previous administration. Commerce Secretary Howard Lutnick said Anthropic has pledged to proactively deter and address security risks associated with the models. Anthropic will restore access to users starting Wednesday. In addition, Anthropic introduced Claude Science, an AI app for researchers that integrates common scientific tools, produces auditable artifacts, and manages computing resources. The platform includes a coordinating agent with more than sixty skills and connectors for genomics, proteomics, and cheminformatics, plus a reviewer agent that checks citations and calculations. Claude Science is available in beta on macOS and Linux for Pro, Max, Team, and Enterprise plans. American Express is expanding its digital wallet offerings. The company announced that U.S. cardholders can now use points on Apple Pay, allowing customers to apply points directly at checkout for online or in-app transactions. This comes as American Express seeks new ways for clients to redeem Membership Rewards points, following recent partnerships with Fanatics and Amazon. Blue Origin, Jeff Bezos’ space company, unveiled new plans for rebuilding its Florida launchpad and transporting its New Glenn rockets. This comes after a devastating rocket explosion in May severely damaged its sole operational pad. The company revealed an updated design for the launchpad and a new machine to transport rockets from the hangar to the pad at Cape Canaveral. The new system involves rolling the rockets horizontally to the pad, then using a crane to lift them upright onto an updated pad for launch. A newly designed tower will hold the rocket in place for flights. Bending Spoons, a Milan-based company that acquires struggling software businesses, raised one point six eight billion dollars in a U.S. initial public offering, pricing shares above the marketed range at twenty-nine dollars each. The IPO gives the company a market value of about eighteen point four billion dollars. Bending Spoons reported net income of twenty-seven and a half million dollars on revenue of six hundred and one million for the first quarter of this year, a sharp turnaround from a net loss a year earlier. Circle Internet Group shares fell eighteen percent on Tuesday after a consortium of firms across payments, finance, tech, and crypto—including its distribution partner Coinbase—unveiled a new stablecoin called Open USD. The new coin is backed by Visa, BlackRock, and Alphabet, and will compete directly with Circle’s own stablecoin. Despite the competition, Circle’s CEO Jeremy Allaire expressed confidence, noting that many companies involved in other projects are already partners and support USDC. Guggenheim upgraded Salesforce to Buy from Neutral with a two hundred twenty-eight dollar price target. The firm argues that the bearish case on AI’s impact on software is a “hallucination.” While acknowledging that AI is a significant risk and that Salesforce could be negatively impacted by the advent of agentic AI, Guggenheim believes the Armageddon scenario currently priced into the stock is misaligned with reality. Datadog announced it has acquired artificial intelligence company Adaptive ML to support corporate clients in creating and deploying specialized models using the Reinforcement Learning Operations platform. Adaptive ML will join Datadog’s AI Research unit to support investments in world models and agentic large language model post-training. Financial details were not disclosed. AI chip startup Etched has raised eight hundred million dollars from investors including Jane Street, VentureTech Alliance, Peter Thiel, and Stripes, as it seeks to challenge Nvidia in AI inference chips. Etched plans to begin shipping chips to customers this summer and says it has already signed one billion dollars in sales contracts. The company is differentiating itself with proprietary low-voltage inference technology and by designing complete AI server racks rather than just chips. Wolfe Research upgraded Fox Corporation to Outperform from Peer Perform with a seventy-one dollar price target. The firm believes that Fox’s merger with Roku shifts the debate about the resilience of Fox News and Fox Sports to a more dynamic multi-channel growth story. While the price paid for Roku will dilute Fox’s near-term multiple, Wolfe sees Fox’s strong fundamentals, faster growth, and robust cash flow as incorrectly priced. Janus Henderson has completed its previously announced take-private transaction with Trian Fund Management, General Catalyst, and a consortium of strategic investors, including the Qatar Investment Authority. Shareholders received fifty-two dollars per share in cash, and the company’s shares have been delisted from the New York Stock Exchange. As a private company, Janus Henderson plans to invest for long-term growth, focusing on expanding its investment capabilities, client service, AI technology, and talent, while retaining its current management team. Joby and Toyota have formed a manufacturing joint venture, Joby Toyota Aero Manufacturing Preparation Company, to produce Joby’s S4 electric vertical takeoff and landing aircraft. Toyota will own fifty-one percent of the venture and Joby forty-nine percent, with Toyota appointing three of the five board members. The joint venture deepens the companies’ manufacturing partnership as Joby advances toward commercial production of its eVTOL aircraft. Before launching its own prediction market app, Meta CEO Mark Zuckerberg explored acquiring Kalshi and met with CEO Tarek Mansour. However, discussions did not progress, with some sources indicating that Meta considered the legal and ethical questions surrounding Kalshi too complex. Lime, the Uber-backed electric scooter and bike rental company, raised one hundred seventy-four million dollars in a U.S. initial public offering, pricing shares at twenty-five dollars each. The IPO gives Lime a market value of one point six billion dollars. Uber is expected to control twenty-two percent of the outstanding shares following the offering, down from twenty-four percent before the IPO. Microsoft is planning to announce job cuts soon as part of ongoing cost-control efforts. The cuts will impact thousands of roles, including sales and consulting, as well as jobs at the Xbox gaming division. This round of layoffs will likely be smaller than last year’s, affecting less than two and a half percent of Microsoft’s two hundred twenty thousand-person workforce. Microsoft’s Xbox division has also pulled out of a deal to fund and publish a game with IO Interactive, the maker of Hitman and 007 First Light, as it re-evaluates investment decisions. IO Interactive will continue to develop the game, code-named Project Fantasy, but will need to find other funding or publish the game itself. Xbox says it is focusing on its highest priorities and expects to invest about the same in content as last year, but is changing where and how it invests. Neon, the Oscar-winning independent film distributor, has acquired the rights to release Artificial, an upcoming movie about OpenAI and its CEO Sam Altman. The film follows the confusing firing and rehiring cycle of Altman and is directed by Luca Guadagnino, with Andrew Garfield portraying Altman. Artificial was originally set to be distributed by Amazon’s Metro-Goldwyn-Mayer studio, but Amazon dropped the film earlier in June and began screening it for prospective buyers. In February, Amazon agreed to invest fifty billion dollars in OpenAI. Nike executives gave a cautious outlook and warned about elevated consumer anxiety, adding to investor concerns about the company’s slow turnaround. Outgoing CFO Matt Friend said on a call with investors that the company does not expect the environment to improve meaningfully over the next six months. Nike expects a slowdown in the coming quarter, citing the timing of wholesale shipments in North America and persistent softness in Greater China, where results were down twelve percent from a year earlier. Competition in China has intensified, with consumers moving toward local brands amid rising costs. Nike is working to clear excess inventories, but analysts say the recovery will take longer and investors may still question whether Nike has fully reset earnings expectations. Guggenheim analyst Simeon Siegel reduced the target price on Nike stock to sixty dollars from seventy-four. Nubank has made an offer to buy the Portuguese bank Caixa Geral de Depositos in Brazil, according to local reports. Four finalists advanced to the second round of the sale process, and the deadline for binding offers expired last week. Nubank has previously stated its intention to obtain a banking license in Brazil this year and is evaluating different alternatives to achieve that goal. Jana Partners has built a new stake in technology company Everpure, formerly Pure Storage, according to sources and documents reviewed by Reuters. The activist hedge fund began accumulating shares in the first quarter of this year and held more than one million shares at quarter-end after obtaining a temporary delay from U.S. regulators in disclosing the position. The current size of Jana’s stake and any strategic changes it may seek remain unknown. Everpure says it maintains an open dialogue with shareholders and remains focused on executing its strategic plan. SAP is reorganizing its product and engineering leadership as Chief Product Officer Muhammad Alam prepares to leave in March. CEO Christian Klein will assume most of Alam’s responsibilities, while COO Sebastian Steinhäuser will take over industrial AI. The move is part of SAP’s broader effort to accelerate its AI strategy as competition from companies like OpenAI and Anthropic intensifies. SAP is also searching externally for a new product leader, focusing on candidates in the U.S., its largest market. The restructuring follows a series of executive changes aimed at strengthening the company’s AI capabilities amid customer concerns about the value of its early AI offerings and a sharp decline in its share price this year. Dish DBS, a unit of Echostar, filed for prepackaged bankruptcy after striking a deal with creditors that ended a prolonged lawsuit, possibly paving the way for a merger or acquisition transaction. The satellite-TV business filed for prepackaged Chapter Eleven in the Southern District of Texas. The plan will facilitate early repayment of Dish DBS debt and help complete the transition of the Dish Wireless Business after the sale of spectrum licenses announced last year. The prepackaged plan has the support of holders of more than eighty-eight percent of Dish DBS’s secured and unsecured notes, who also hold more than eight point eight billion dollars of Dish Wireless debt. Keefe Bruyette is keeping an Underperform rating on SoFi Technologies with a sixteen dollar price target after the company announced the launch of small business loans. Keefe does not expect a significant financial impact from the new offering in the near term, but says continued investments into small businesses with expanded product offerings could help SoFi develop a sizable business over time. Shares of Shutterstock plunged about thirty percent in after-hours trading after Getty Images said it would cancel a planned merger due to a ruling from UK regulators. The UK’s Competition and Markets Authority conditioned its approval on a sale of Getty’s editorial photography business, leading Getty’s board to vote to terminate the merger agreement after July sixth, assuming no material change in circumstances. Getty Images intends to hire a financial adviser to find other financing alternatives. Tesla announced that engineering tests of the first production Cybercab have begun in Austin. The company posted a video showing the vehicle navigating streets with no one in the driver’s position, since the Cybercab is built without a steering wheel or pedals. A safety monitor sits in the passenger seat during the tests. Rocket Lab’s acquisition of Iridium has increased speculation that ViaSat could become the next satellite industry takeover target, as companies with valuable satellite spectrum attract strategic buyers. Analysts estimate ViaSat’s global L-band spectrum alone could be worth about fifteen billion dollars. ViaSat is now viewed as the only remaining independent owner of a large global L-band portfolio following recent acquisition announcements involving Globalstar and Iridium. Potential acquirers could include SpaceX or Amazon, both of which may seek additional spectrum to expand their satellite networks. However, a potential sale could be complicated by ViaSat’s agreement to pool its spectrum in a joint venture with Space42, although management has indicated it may retain flexibility over how much spectrum is contributed. Wayve Technologies has become the first major company to use the London Stock Exchange’s new Private Securities Market, known as Pisces, filing to hold a private share auction on July eighth. Separately, the autonomous driving startup will allow employees to sell up to eighty-five million dollars of stock through a tender offer, providing liquidity without pursuing an IPO. The move highlights growing adoption of the UK’s new regulated private market, which enables shareholders in private companies to trade shares through periodic auctions. Wayve, last valued at eight point six billion dollars, is preparing to launch self-driving taxi services in London with Uber while expanding its driver-assistance software partnerships with automakers. Paramount Skydance has formally offered commitments in an attempt to allay European Union fears over its one hundred ten billion dollar takeover of Warner Bros. Discovery. The European Commission set a new deadline of July twenty-second to decide whether to clear the deal or open an in-depth probe. The offer by Paramount is expected to garner approval from EU competition regulators. Paramount says it is confident the remedy directly addresses any concerns expressed in the EC’s preliminary assessment and will support timely clearance. The proposed antitrust fix comes after Competition Commissioner Teresa Ribera flagged concerns over the power Paramount may have in film distribution in Europe, particularly wanting to ensure alternatives for producers and filmmakers to get their content into theaters and homes. In the UK, Secretary of State for Culture, Media and Sport Lisa Nandy wrote a letter to Warner Bros. and said to parliament that she is “minded to intervene” on public interest grounds. If she does, the country’s media regulator and antitrust watchdog will report to her about the deal’s impact on competition. Turning to macro and central bank news. Abu Dhabi’s MGX has raised forty-nine billion dollars for one of the world’s largest AI-focused investment funds, exceeding its forty-five billion dollar target. The fund has already begun deploying capital and will invest alongside MGX’s existing portfolio, which includes stakes in OpenAI, xAI, Anthropic, and AI infrastructure projects. This fundraising supports Abu Dhabi’s strategy of leveraging its financial resources to become a leading force in AI, with MGX aiming to grow beyond one hundred billion dollars in assets under management. The new capital gives MGX greater capacity to pursue increasingly expensive AI investments as competition for strategic AI assets intensifies. In the crypto space, Bitcoin fell to a fresh twenty-one month low as the prospect of higher interest rates and concerns about the largest corporate buyer of the token weakened sentiment. Hawkish comments by Federal Reserve policymakers are fueling expectations for higher rates, encouraging capital away from assets like cryptocurrencies that don’t pay a yield. Investors have also reversed an initial vote of confidence in Michael Saylor’s financing overhaul at Strategy, raising fresh concerns that one of the biggest buyers of Bitcoin may no longer be a consistent source of demand. Bitcoin has now fallen more than fifty percent from its record high above one hundred twenty-six thousand dollars in October last year and is below its two hundred-week moving average, a technical level that can signal a prolonged bear market. On the policy front, U.S. envoys Steve Witkoff and Jared Kushner held what a senior administration official described as positive discussions in Qatar as indirect U.S.-Iran negotiations continue to build on last month’s interim peace agreement. Technical talks between lower-level officials are progressing, though major issues remain unresolved, including the future management of the Strait of Hormuz, the release of Iran’s frozen assets, and the country’s nuclear program. The Trump administration is signaling a preference to continue diplomacy rather than escalate militarily, with reports indicating President Trump is willing to let negotiations extend beyond the August eighteenth deadline. Oil prices eased as hopes for a lasting ceasefire improved, although uncertainty over Hormuz continues to pose risks to global energy markets. Japan’s top currency official, Atsushi Mimura, defended the government’s recent yen-buying intervention, saying it was effective and indicating the U.S. did not oppose the move. He emphasized close coordination with U.S. officials as the yen trades near a forty-year low of around one hundred sixty-three per dollar, fueling speculation that Tokyo could intervene again. Markets are watching for another round of intervention if the yen weakens further, with some investors viewing one hundred sixty-four to one hundred sixty-five per dollar as a potential trigger. Persistent yen weakness continues to raise inflation risks for Japan by increasing import costs, even as exporters benefit from the weaker currency. In Washington, President Donald Trump reported earning at least one point four billion dollars in two thousand twenty-five from crypto and memecoin-related businesses, according to his latest annual financial disclosure. Trump reported making more than five hundred ninety-four million dollars from sales by World Liberty Financial, the crypto firm whose co-founders include Trump, his sons, and Steven Witkoff, a top diplomat in his administration. CIC Digital, Trump’s memecoin business, generated six hundred thirty-six million dollars in income. He also made nearly one hundred ninety-seven million dollars from an equity sale of Stablecoin Holdco. Also in Washington, Democratic Socialist Melat Kiros defeated fifteen-term incumbent Representative Diana DeGette in Colorado’s heavily Democratic First Congressional District, marking a major upset and another victory for the party’s progressive wing. The result follows a string of recent primary wins by progressive challengers backed by New York Mayor Zohran Mamdani, underscoring growing voter frustration with Democratic incumbents. In Colorado’s gubernatorial primary, Attorney General Phil Weiser also defeated Senator Michael Bennet for the Democratic nomination after campaigning as a stronger opponent of President Trump. The outcomes highlight increasing ideological divisions within the Democratic Party as progressives gain momentum ahead of the twenty-twenty-six midterm elections. In event-driven news, Alcoa has agreed to buy South32’s bauxite, alumina, and aluminum assets in a deal worth as much as five point six billion dollars, cementing its position as a top producer as long-term demand strengthens and the Iran war exposes supply concerns. Alcoa will pay three point one billion dollars in cash and about one billion in Alcoa shares, while assuming seven hundred fifty million of net debt and lease liabilities. South32 could receive an additional seven hundred fifty million if alumina and aluminum prices exceed agreed thresholds over the next four years. The acquisition significantly expands Alcoa’s integrated aluminum business, strengthening its position as one of the world’s largest producers by adding assets across the entire value chain, from bauxite mining to alumina refining and aluminum smelting. Schneider Electric will acquire industrial AI software company Cognite for three point one billion dollars in cash, strengthening its industrial data and AI capabilities as European manufacturers accelerate AI adoption. Schneider plans to combine Cognite with its industrial software unit, Aveva, creating a broader platform for industrial data management, digital twins, and AI-driven factory optimization. The acquisition aligns with Schneider’s strategy to expand its software business and capitalize on growing demand for AI-enabled industrial automation, although some analysts have questioned the valuation. Cognite generated more than one hundred seventy million dollars in revenue last year and serves customers across energy and process manufacturing industries. Hedge fund news sees Millennium Management preparing to raise billions of dollars in new cash to tap into investors’ demand for multistrategy hedge funds. Izzy Englander’s firm plans to raise at least ten billion dollars, with the new money being callable, meaning clients make pledges that Millennium can tap over time. Millennium currently manages around eighty-nine billion dollars. In Japan, activist returns on investments are underwhelming, according to the Nikkei. Evidence shows limited outperformance in activist holdings over the benchmark, even as positions broaden, which may fuel a push for more radical corporate reforms. Okasan Securities analysis showed the market value of activist holdings exceeded sixteen trillion yen, or ninety-eight and a half billion dollars, as of May, an all-time high. Yet returns have languished, with a sample of stocks held by activists with market values of thirty billion yen or more outperforming the Topix by just zero point eight percent, a three-year low. Some believe activist funds are allocating surplus funds and may be struggling for returns, possibly due to portfolio expansion into large-caps, which offer less room than smaller companies for activists to influence management. Let’s take a look at some notable market trends and charts. Within equities, small cap and micro cap stocks have exploded higher in recent weeks as market rotation continues, according to Strategas. Retail investors have been especially active, buying nearly three and a half times the average daily amount on S&P down days during the first half of twenty-twenty-six. This is the strongest buy-the-dip behavior in Citadel’s dataset. Dealmakers are holding the course for a potential record amount of deal value in twenty-twenty-six, according to Bloomberg. Investor sentiment may also be shifting toward active management, as seen in the relative share price performance of T. Rowe compared to BlackRock. That wraps up today’s key markets and headlines. Thanks for listening.