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Good Afternoon. On this day in 1958, President Dwight D. Eisenhower signed the law that created NASA after Sputnik had turned the space race into a national priority. The agency wouldn’t open until later, but America had decided it needed a better way to navigate the unknown.

Today, investors could’ve used mission control: the Fed held steady, three officials wanted a hike, and oil blasted higher just as the biggest week of earnings reached orbit.

—Rosie, Wyatt, Evan & Conor

💰 Markets

S&P 500

Dow Jones

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iShares 7–10 Year Treasury

Bitcoin

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🔍 Today’s Vibe

🔥 What’s Hot: 🔥

  • Oil & Pricing Power: Renewed fighting sent oil sharply higher, while companies that can protect margins have become easier to defend investments in.

🥶 What’s Not: 🥶

  • Rate Cuts: The Fed’s split kept a hike alive, and another round of AI spending questions pressured growth stocks.

🔢 Big number: 3 — That’s how many Federal Reserve officials wanted a rate hike today, even though the committee’s majority voted to hold.

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🇺🇸 Stateside

The Fed’s family fight

The Federal Reserve’s supposed to lower the room’s temperature, but today it turned a policy meeting into a family argument. Chair Kevin Warsh got a hold through the committee, yet three policymakers said borrowing costs should go higher.

The news: The Fed kept its target range at 3.5%–3.75% in a 9–3 vote. Cleveland’s Beth Hammack, Minneapolis’s Neel Kashkari, and Dallas’s Lorie Logan preferred a quarter-point increase, while Warsh reaffirmed the central bank’s commitment to 2% inflation. It’s a rare kind of hold: the official rate didn’t change, but the dissent made the possibility of a future hike harder to ignore.

What’s next: The Fed hasn’t given markets a clean flight path, so incoming inflation and labor data will carry more weight than usual. Oil’s renewed jump adds another variable because energy can raise household costs quickly, and borrowers shouldn’t assume today’s hold means the pressure is over.

Source: Axios

P&G can’t wash away slow growth

Procter & Gamble sells the products people keep buying in almost any economy, but even that dependable basket isn’t immune to cautious shoppers and higher costs. Its year ended with more revenue, yet the underlying growth engine barely moved.

The news: Fiscal fourth-quarter sales rose 2% to $21.2 billion, while organic sales were unchanged and diluted earnings per share fell 15% to $1.26. For fiscal 2027, P&G expects organic sales growth of 1%–3% and core earnings-per-share growth ranging from flat to 3%. It’s also budgeting for about $1 billion of after-tax pressure from raw materials, energy, and transportation.

Big picture: P&G’s challenge isn’t whether people will keep buying toothpaste and detergent; it’s whether price, volume, and productivity can offset another expensive year. The company returned more than $15 billion to shareholders last year, but tomorrow’s progress depends on turning marketing and product investment into real volume instead of leaning on currency or price.

KLA raises the next hurdle

KLA sits in a useful corner of the AI buildout: the more complicated chips become, the more manufacturers need tools that find defects and control production. Its latest quarter says that demand hasn’t disappeared, but stronger guidance has also raised the standard for what comes next.

The news: Quarterly revenue reached $3.66 billion, above the midpoint of guidance, while free cash flow totaled $817 million. Management expects fiscal first-quarter revenue of about $4.0 billion, give or take $200 million, and a non-GAAP gross margin near 62.5%. The company says advanced packaging, memory, and leading-edge logic are all creating more process-control work, so it’s getting several paths into the same AI spending cycle.

Bottom line: KLA doesn’t need every new AI project to succeed, but it does need chipmakers to keep building more advanced factories and designs. Today’s numbers support that case; now management has to protect margins and cash while customers decide how far their next expansion plans should go.

Source: KLA

Big Tech faces its receipt

Microsoft and Meta aren’t being asked whether artificial intelligence is promising anymore. They’re being asked whether the revenue arriving today can justify the giant infrastructure bill investors can already see coming.

The news: Consensus estimates across the largest cloud spenders call for capital investment to rise from $384 billion in 2025 to $682 billion in 2026, then reach $878 billion in 2027. Microsoft’s fiscal 2027 capital-spending estimate has nearly tripled from its fiscal 2025 level to $190 billion, while Meta’s 2026 estimate has climbed to roughly $137 billion. It’s why their upcoming results need to show more than demand; investors want evidence that AI adoption can support profitability.

What’s next: Revenue growth can still earn applause, but it won’t answer the return-on-investment question by itself. Watch cloud demand, advertising efficiency, margins, and any change to spending plans, because those details will show whether AI’s earnings are beginning to catch its construction budget.

eBay pays for a culture failure

eBay has agreed to pay nearly $50 million to the Massachusetts couple targeted in a harassment campaign by former employees. It’s a painful reminder that a company’s controls aren’t just about accounting; they’re also supposed to stop a warped internal culture from becoming somebody else’s nightmare.

The news: Settlement details released Tuesday put the total compensation near $50 million, and it’s mostly funded by eBay. Seven former employees were charged in 2020, and the company separately agreed to a $3 million criminal penalty in 2024. The couple had published a newsletter about the e-commerce industry, and the campaign was meant to intimidate them over critical coverage.

Big picture: eBay can pay a settlement, but it can’t buy back the trust lost when employees misuse a company’s resources and authority. Boards should treat this as a governance case study: incentives, escalation paths, and executive oversight matter long before misconduct reaches a courtroom.

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🌎 Around The World

Oil restarts the inflation clock

Brent crude’s sharp rebound changed the day’s math across markets. Renewed fighting involving Iran revived worries about the global oil flow, and it’s put energy inflation back in the conversation just as central banks are trying to decide whether price pressure is fading.

The news: Brent crude jumped 7.3% to settle at $88.09 a barrel after missiles and airstrikes ended the market’s brief sense of relief. The move didn’t just help energy producers; it pressured stocks and bonds because higher fuel and shipping costs can move through the economy faster than many other inputs.

Bottom line: One oil spike doesn’t guarantee another inflation wave, but it narrows policymakers’ room for error. Businesses with fuel-heavy operations may need to revisit hedges and pricing plans, while households shouldn’t count on immediate relief at the pump if the fighting keeps export routes under stress.

SK Hynix misses the mark

SK Hynix delivered record results from the memory-chip boom, yet Seoul investors still wanted more. That’s what happens when a company becomes one of AI’s most important suppliers: a good quarter isn’t enough if expectations have already raced ahead.

The news: Quarterly revenue reached 79.3 trillion won, below an analyst estimate near 84 trillion won, and shares were down close to 13% in Seoul despite robust demand for high-bandwidth memory. The company expects capital spending in the high-40-trillion-won range this year, well above 2025, so it’s making a large bet that AI-server demand will stay strong.

What’s next: SK Hynix hasn’t lost its strategic position, but investors will want production growth without a damaging supply glut. Watch memory pricing, customer commitments, and the pace of new capacity, because today’s shortage can become tomorrow’s margin problem if too many factories arrive together.

CaixaBank’s record falls short

CaixaBank earned more money than ever in the first half, but Madrid investors treated the report like a disappointment. The problem wasn’t the past six months; it was management’s decision not to raise the year’s targets after such a strong start.

The news: First-half profit rose 8.5% to €3.20 billion, pushing return on equity above 18% and supporting a planned interim dividend. Shares still closed down close to 7.1% because the bank kept its existing guidance, which surprised analysts who expected an upgrade. It’s another example of strong results losing to even stronger expectations.

Big picture: Higher interest rates have helped bank earnings, but they’ve also taught investors to expect upgrades when results run ahead. CaixaBank’s selloff says guidance credibility now matters as much as a record profit, and European banks may face tougher comparisons as rate benefits move fully through their balance sheets.

Source: Cinco Días

🥸 Dad Joke of the Day

Q: Why’d the investor bring a microscope to the Fed meeting?

A: They couldn’t forward guidance without zooming in.

📖 Vocab Word of the Day

Interest rate risk:

The chance that changing borrowing costs will alter an investment’s value or a borrower’s payments.

In a sentence: Today’s Fed split didn’t reduce interest rate risk; it reminded bondholders and floating-rate borrowers that the next move could still be higher.

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