Good Afternoon. On this day in 1973, DJ Kool Herc’s Bronx back-to-school party became widely credited as the birth of hip-hop.

He stretched the break; today, oil stretched the market’s nerves as traders waited for inflation to drop the next beat.

—Rosie, Wyatt, Evan & Conor

🔥 What’s Hot: 🔥

🥶 What’s Not: 🥶

🔢 Big number: $4.01 — That’s the national average for a gallon of regular gasoline, up from less than $3.14 a year ago.

It’s why Wednesday’s inflation report matters beyond one data point: expensive energy can reach household budgets, freight bills, and the Federal Reserve’s rate debate.

Wall Street couldn’t find a clean direction while crude kept changing the question. Brent oil briefly crossed $90 before retreating below $87 and ultimately settling at $88.91, up close to 1.4%. That swing matters because energy isn’t just another trade; it can reset what households, businesses, and the Federal Reserve expect from inflation.

The news: The S&P 500 and Dow were both down close to 0.3% late Tuesday, while the 10-year Treasury yield eased to 4.68% from 4.72%. The market’s next test arrives Wednesday, when economists expect July inflation to cool to 3.4% from 3.5%. Traders are also pricing roughly coin-flip odds of a September rate increase, so one report could quickly change the cost-of-money conversation.

What’s next: Investors can’t treat a softer headline number as an all-clear if gasoline and shipping costs keep pushing in the other direction. Watch core inflation alongside energy, then listen for whether Fed officials describe the oil shock as temporary or persistent. That distinction will shape mortgages, business borrowing, and how much valuation pressure expensive stocks can absorb.

Source: Associated Press

The existing-home market isn’t short on people who’d like to move; it’s short on affordable ways to make the move work. Owners with low pandemic-era mortgages don’t want to surrender them, and would-be buyers face the highest borrowing rates in more than a year. That combination keeps listings thin, prices firm, and transactions stuck near three-decade lows.

The news: July sales fell 1.7% from June to a seasonally adjusted annual pace of 4.06 million, though they were up 0.7% from a year ago. The median price rose 2% to $434,100, while inventory slipped to 1.54 million homes, equal to 4.6 months of supply. It’s a market where first-time buyers accounted for just 29% of purchases, well below their roughly 40% historical share.

Bottom line: A modest rate dip wouldn’t instantly unlock the market because buyers still need more listings and income growth to catch prices. Sellers may have to weigh a lower mortgage against the life cost of staying put, while buyers should budget for taxes, insurance, and repairs rather than stretching to win a scarce listing. Watch inventory and first-time-buyer participation for the clearest signs of normalization.

Source: Associated Press

Cardinal Health isn’t relying on one clean quarter to make its case. The distributor is pairing higher earnings with stronger cash generation, a raised outlook, and a much larger buyback authorization. That mix tells investors management believes the business can fund growth, absorb operating risks, and still return capital.

The news: Quarterly revenue climbed 6% to $63.7 billion, and adjusted earnings reached $2.91 per share, including a 31-cent tariff refund. Full-year operating cash flow was $5.2 billion, while adjusted free cash flow reached $5 billion. It’s also a capital-return story: the board approved a new $5 billion repurchase program, and management expects fiscal 2027 adjusted earnings of $12.40 to $12.60 per share, up 13% to 15%.

Big picture: Buybacks only create lasting value when the core business keeps producing cash and the shares aren’t overpriced. Cardinal will still have to manage tariffs, supplier relationships, and the capital needs of its expanding specialty and at-home businesses. Watch results excluding one-time refunds and the pace of repurchases; they’ll show whether today’s confidence is operational or merely financial.

Source: U.S. Securities and Exchange Commission

Joby Aviation is buying expertise that’s difficult to build on a commercial timetable. Resonant Sciences brings secure facilities, cleared employees, and experience developing specialized aerospace systems. The deal doesn’t replace Joby’s air-taxi ambition, but it gives the company another customer base while certification and commercial deployment continue.

The news: Joby agreed to acquire the Ohio-based defense contractor for $500 million, split between $450 million in cash and $50 million of stock. Resonant has about 250 employees, nearly all with security clearances, and it’ll anchor a dedicated defense unit. The companies expect the transaction to close in the first half of next year, subject to approvals.

What’s next: Defense work can bring funded programs and technical credibility, but it can also pull management toward classified priorities that don’t map neatly to passenger aircraft. Joby will need to protect the commercial roadmap while integrating a culture built around government missions. Watch contract wins, employee retention, and spending; they’ll reveal whether the new unit diversifies execution risk or adds another demanding program.

Source: Axios

Rocket Lab isn’t simply a launch company anymore, and the backlog is beginning to show the scale of its broader space-supplier ambitions. Record quarterly revenue came with more satellite, defense, and launch commitments, giving management better visibility while the larger Neutron rocket moves from engineering toward the pad.

The news: Second-quarter revenue rose 62% to a record $234 million, while backlog reached $2.36 billion, up 137%. The company said it entered more than $1 billion of new contracts in the third quarter, including post-quarter awards, and guided current-quarter revenue to $250 million to $265 million. Neutron’s first hardware delivery to its launch pad is targeted for the fourth quarter.

Bottom line: Backlog isn’t the same as cash, especially when a new rocket still requires heavy testing and capital. Rocket Lab ended the quarter with about $2.13 billion of cash and equivalents, but used $134.4 million in operating cash during the first half. Watch milestone timing and contract conversion; schedule discipline will determine whether scale arrives before the spending curve gets steeper.

Source: U.S. Securities and Exchange Commission

Singapore’s Sea Limited is still growing quickly, but the more important change is that its commerce engine is contributing real profit. Shopee can spend on logistics, pricing, and user acquisition only if order growth eventually produces operating leverage. This quarter suggests scale is starting to carry more of that load.

The news: Revenue jumped 48.1% to $7.8 billion, net income rose 10.6% to $458.1 million, and adjusted operating earnings reached $917.2 million. Shopee merchandise volume grew 28.4% to $38.3 billion, with orders up 27.5% to 4.2 billion. It’s now expected to generate about $1 billion of adjusted operating earnings in 2026.

Big picture: Faster orders are valuable only if delivery, promotions, and credit don’t consume the margin they create. Sea has to preserve marketplace trust while financing growth across several Southeast Asian economies with different competitive conditions. Watch Shopee’s profit per order and lending quality; they’ll show whether today’s scale advantage can keep compounding without another subsidy cycle.

Source: Sea Limited

Swiss running brand On Holding isn’t willing to chase volume with discounts at the expense of its premium image. That discipline helped lift direct-to-consumer sales and gross margin, but it also means management must convince shoppers to keep paying full price when rivals and retailers have promotions available.

The news: Quarterly sales rose 13.5% to 850.3 million Swiss francs, or 21.6% in constant currencies. Direct-to-consumer sales grew 26% and represented 45.7% of the total, while gross margin reached 65.4%. It’s still guiding for low-20% constant-currency sales growth this year, gross margin of at least 65%, and an adjusted operating margin between 19.5% and 20%.

What’s next: Selling more through its own channels gives On better customer data and margin, but it also carries inventory and store-execution risk. The brand can’t let scarcity become unavailability or full-price discipline become slower growth. Watch wholesale orders and repeat purchases; they’ll indicate whether demand is durable enough to support premium pricing without heavier promotion.

Source: On Holding

Australia’s central bank isn’t declaring victory after three rate increases this year. Inflation remains above target, but household consumption has slowed and home prices are falling in some cities. Holding steady gives policymakers time to learn whether earlier tightening is cooling demand without unnecessarily deepening the slowdown.

The news: The Reserve Bank of Australia unanimously kept its cash rate at 4.35%. Officials said business investment and credit remain strong even as consumption growth weakens, and they don’t expect inflation to return to the midpoint of the target range until late 2027. The board also warned that further increases may be needed if capacity and energy pressures keep prices elevated.

Bottom line: A pause isn’t a promise that borrowing costs have peaked. Australian households and businesses should test budgets against rates staying high for longer, particularly while energy and global trade remain volatile. Watch services inflation, wages, and consumer demand; broad cooling would support patience, while another price flare-up could put a fourth 2026 increase back on the table.

Source: Reserve Bank of Australia

Q: Why couldn’t the oil barrel keep a secret?

A: It’d always leak the story.

The extent to which a business transfers higher input costs into customer prices.

In a sentence: If expensive oil lifts freight and production bills, companies’ cost pass-through will help determine whether the shock stays in corporate margins or reaches tomorrow’s inflation readings.

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