Market Summary
Markets turned cautious as AI-linked selling pressured the Nasdaq and dragged the S&P 500 lower while the Dow held some gains. Volatility spiked after Broadcom and Oracle headlines hit tech, investors rotated into defensive sectors, yields ticked higher and data-center and AI spending narratives are reshaping sector flows.
The White House issued an executive order preempting state-level AI rules, sparking bipartisan legal and political backlash. Democrats and consumer groups are already threatening court challenges as states vow to press on.
Figure of the Day
800B – Implied private valuation of SpaceX after insider share sales.
SpaceX insiders sold shares at prices implying an $800 billion private valuation, intensifying speculation about an imminent IPO. The moves spotlight tensions between Musk’s long-term Mars ambitions and investors seeking near-term returns.
Oracle pushed some OpenAI data-center completions into 2028, rattling investors and sending shares sharply lower. The selloff erased tens of billions from Larry Ellison’s net worth and intensified scrutiny of Oracle’s AI timing.
Bullish
GreenGrid claims breakthrough battery cuts costs 50% – shares surge
Startup GreenGrid announced a commercial battery breakthrough promising 50% cost reductions and faster charging; investors lifted the stock on hopes it will accelerate EV and grid storage adoption.
Broadcom’s surprise weakness triggered an AI-led selloff that pulled major indexes lower. Traders rotated out of the hottest AI names, leaving markets volatile into the weekend.
The U.S. seized the supertanker Skipper near Venezuela in an operation Washington says targets clandestine oil shipments. The move has choked Venezuelan exports and raised geopolitical tensions in the region.
Bearish
SunMart files Chapter 11 after holiday sales collapse – creditors circle
Regional retailer SunMart filed for Chapter 11 after a sharp holiday revenue drop and mounting debt; suppliers and lenders are moving to protect exposure as closures loom.
Regulators moved crypto closer to the banking system with conditional charters and approvals for crypto-native firms. The developments mark a milestone for stablecoins and institutional digital-asset integration.
OpenAI pushed out GPT-5.2 after an internal ‘code red’, aiming to cut hallucinations and boost accuracy. Separately, Disney committed $1 billion to an OpenAI tie-up, betting characters and content will accelerate AI adoption in media.
Regulatory Impact
White House executive order to preempt state AI rules and an OCC push to grant conditional crypto trust charters signal a federal tilt toward centralized AI oversight and regulated integration of crypto firms into banking. Expect swift legal challenges and updated compliance demands for banks and crypto entrants.
President Trump has narrowed his Fed choices to Kevin Warsh and Kevin Hassett, injecting politics into the central bank succession. Banking leaders have begun signaling preferences, raising questions about policy direction under a new chair.
Fed officials remain divided after this week’s rate cut, with some calling the move necessary and others urging caution. The split complicates the outlook for 2026 and keeps markets on edge over the pace of future easing.
Quote
“This executive order is likely illegal and extremely dangerous.”
— Sen. Amy Klobuchar
Reports that the White House may reschedule marijuana triggered a rally across cannabis stocks. Investors are pricing in a federal loosening that would reshape the industry’s regulatory and tax landscape.
The DTCC won SEC no-action relief to launch tokenization services, a major step for Wall Street adoption of tokenized securities. At the same time, U.S. regulators gave preliminary approval to crypto firms seeking trust charters, accelerating institutional crypto product plans.
Beijing is weighing a fresh multibillion-dollar incentives package to bolster domestic chipmaking amid global supply shifts. Nvidia is also considering local production for H200 chips to meet surging Chinese demand.
Wall Street is warning that the rush to build AI datacenters could produce a costly glut if demand stalls. Banks and investors face rising exposure as construction financing and speculative bets accelerate.
House Democrats released fresh photos from Jeffrey Epstein’s estate featuring prominent figures, intensifying oversight battles and public scrutiny. The trove has renewed pressure on lawmakers to disclose the full files.
Reports show the TSA is supplying passenger data to ICE as part of a stepped-up deportation effort, drawing civil liberties concerns. The White House has denied suspending deportation flights to Venezuela despite Caracas’ claims to the contrary.
The OCC report accuses nine big banks of inappropriate debanking practices, raising regulatory alarms. The regulator is also planning reforms to liquidity risk and AML rules, signaling tougher oversight ahead for large banks.
Eli Lilly reported dramatic weight-loss results from its new shot, reinforcing expectations for blockbuster adoption. Europe’s drug regulator also recommended expanding Mounjaro use to children, boosting market prospects and investor optimism.
The FDA approved two new drugs to treat increasingly antibiotic-resistant gonorrhea, a public-health milestone. The approvals respond to rising STI resistance and could reshape treatment protocols.
