Good Afternoon. Wall Street hit pause today. The S&P 500 slipped from record highs as big names like Nvidia, Dell, and Tesla dragged the market lower. With the Stock Market taking a break for Labor Day, we’ll be back in your inbox Tuesday to see if stocks come back rested or restless. Enjoy the long weekend.

—Rosie, Wyatt, Evan & Conor

🔥 What’s Hot: 🔥

🥶 What’s Not: 🥶

1. S&P 500 dips from record highs as Dell and Nvidia drop

The News: The S&P 500 slipped below 6,500 on Friday, retreating from Thursday’s record close as Nvidia (-3.3%) and Dell weighed on the tech-heavy market. While Nvidia’s earnings showed continued AI infrastructure spending, investors balked at lofty expectations and concerns of over-investment. Marvell plunged 18% on weak guidance, while Caterpillar lost 4% after warning tariffs will drive up costs. On the macro side, U.S. consumer spending rose at the fastest pace in four months, but economists still expect the Fed to cut rates in September as labor market softness and tariff-driven inflation are seen as temporary.

Why It Matters: Even with today’s dip, August shaped up strong: the S&P and Dow are set for their fourth straight monthly gain, while the Nasdaq is on track for a fifth. For investors, the lesson is that while AI and mega-cap tech drive the headlines, rate cuts and consumer spending remain the broader market’s tailwinds. Call it a long weekend reminder, markets don’t move in straight lines, even when they’re aiming for the moon, and time in the market is always better than trying to time the market.
Source: msn.com

2. Wheat That Makes Its Own Fertilizer

The News: Scientists at UC Davis have engineered wheat that can make its own fertilizer, a potential game-changer for both farmers and the environment. Using CRISPR gene-editing, the team boosted production of apigenin—a natural plant compound that stimulates soil bacteria to fix nitrogen into a usable form. Unlike beans and peas, wheat can’t naturally host nitrogen-fixing bacteria, so farmers rely heavily on chemical fertilizers. This breakthrough could change that.

Why It Matters: Fertilizer is expensive and wasteful, U.S. farmers spent $36 billion on it in 2023, but plants only absorb 30–50% of applied nitrogen. The rest pollutes waterways, creates “dead zones,” and pumps potent greenhouse gases into the air. If even 10% of fertilizer use is replaced by self-fertilizing wheat, farmers could save over $1 billion annually while cutting environmental damage. The innovation could also help farmers in poorer regions who can’t afford fertilizers, improving global food security, while bringing down the cost of food and helping to combat environmental change. Talk about a win-win-win.
Source: ucdavis.edu

3. Tesla sales continue plunging in Europe

The News: Tesla’s sales in Europe plunged 40% in July, its seventh straight monthly decline, as consumers turn away from the brand amid growing backlash against CEO Elon Musk’s political endorsements of far-right parties. Meanwhile, Chinese rival BYD surged 206% year-over-year, outselling Tesla for the first time in the EU with 9,698 vehicles versus Tesla’s 6,600. That leaves Tesla with just 0.7% market share, while BYD now holds 1.1%.

Why It Matters: The political fallout is hitting Tesla at the worst possible time. European EV sales are booming, up 39% in July, but Tesla is missing out. Beyond reputational issues, the company faces delays in regulatory approval for its advanced driver-assistance features and factory shutdowns for retooling. The slump weighed on Tesla stock, adding pressure to the broader market as tech giants like Nvidia and Dell also dragged down the S&P 500. For Tesla, it may be time to recharge the batteries as Europe’s patience with Musk seems to be running out.
Source: pbs.org

4. Gen Z investing at unprecedented rates, study finds

The News: A new JPMorgan Chase study finds that Gen Z is investing at unprecedented levels. Today, 37% of 25-year-olds hold investment accounts, up from just 6% in 2015, making them six times more likely to invest than millennials were at the same age. The trend has coincided with a decline in first-time homeownership, showing younger Americans are swapping mortgages for markets.

Why It Matters: Gen Z is changing what retail investing looks like. Many were drawn in by social media fads like meme stocks during the pandemic, and the behavior has stuck, especially among men and lower-income investors. While this democratization of investing is closing income gaps, it comes with risks: new investors tend to chase prices and time dips, leaving them vulnerable in downturns. For the market, this means more flows into ETFs, tech names, and “hot” trends like AI and crypto sectors that resonate with younger investors’ digital-first worldview. The big question: will Gen Z’s investing habits mature into steady wealth-building, or stay tied to hype cycles?
Source: fortune.com

5. Senate Democrats push to halt Fannie Mae, Freddie Mac IPOs

The News: Senate Democrats, including Elizabeth Warren, Cory Booker, and Chuck Schumer, are warning the Trump administration to pause plans to privatize Fannie Mae and Freddie Mac, the mortgage giants that guarantee nearly half of U.S. home loans. In a letter to FHFA Director Bill Pulte, the senators said selling government shares—potentially raising $30 billion in one of the largest IPOs ever—could push mortgage rates higher and make housing even less affordable.

Why It Matters: Mortgage rates may have dipped to 10-month lows this week, but they’re still above 6.5%, keeping many buyers on the sidelines. Democrats argue that privatizing Fannie and Freddie could strip away the implicit government guarantee that has long helped keep borrowing costs down. If investors start doubting whether the government would step in during a crisis, lenders could demand higher rates, hitting homebuyers hardest, especially first-time buyers already struggling in the most unaffordable housing market since the mid-1990s.

The Trump administration, however, sees the IPO as a way to end Fannie and Freddie’s 17-year conservatorship while maintaining oversight. Treasury Secretary Scott Bessent insists the process will be “deliberate” to avoid sudden rate spikes, but Wall Street is already circling the offering, with banks like JPMorgan and Goldman Sachs involved in talks. For homeowners, the debate boils down to this: will Trump’s Fannie-Freddie IPO finally “free the market” or just free mortgage rates to climb higher?
Source: wsj.com

1. Volkswagen adds 5 years to AWS cloud, AI partnership

The News: Volkswagen is doubling down on its digital shift, extending its cloud partnership with Amazon Web Services (AWS) for another five years. The deal keeps VW’s Digital Production Platform, the “digital nervous system” of its factories, running on AWS, now deployed across 43 plants and slated to connect all 114 globally. More than 1,200 AI applications already help VW cut costs, improve quality, and even reduce energy consumption at some plants.

Why It Matters: For Volkswagen, it’s about survival in a margin-squeezed industry with AI-driven efficiency potentially saving millions. For Amazon, it’s another reminder that AWS, not e-commerce, is its real profit engine. Cloud contracts like this underpin Amazon’s cash flow, subsidizing everything from free shipping to Alexa to its AI ambitions. As automakers embrace “software-defined” vehicles, AWS cements itself as the quiet backbone of global manufacturing.
Source: ciodive.com

2. Klarna IPO to Kick Off September Rush

The News: Swedish fintech giant Klarna is finally hitting Wall Street, with its long-awaited IPO slated for September 2025. The Buy Now, Pay Later pioneer is targeting a valuation of $13–14 billion, a steep drop from its pandemic-era peak near $46B, but still aiming to raise up to $1 billion in fresh capital. Shares will debut on the NYSE under the ticker KLAR, with Goldman Sachs, JPMorgan, and Morgan Stanley leading the underwriting.

Why It Matters: Klarna isn’t just another tech IPO, it’s the bellwether for fintech. Unlike many peers, Klarna has already achieved profitability ($21M net income in 2024), giving it a stronger pitch to investors wary of money-losing growth stories. A strong debut could jumpstart the IPO market further and open the floodgates for other tech firms waiting on the sidelines. Klarna’s pitch is simple: “Buy now, pay later.” But for Wall Street, it’s really “buy now, because the IPO window may not stay open forever.”
Source: bloomberg.com

3. Bank share prices tumble after calls for tax on profits

The News: Shares of major UK banks tumbled Friday after the Institute for Public Policy Research (IPPR) proposed a new windfall tax on the sector that could raise £8 billion annually. The think tank argues banks are benefiting from taxpayer-backed losses at the Bank of England, calling it a “subsidy to shareholders.”

Why It Matters: For consumers, the concern isn’t just whether Barclays or Lloyds see slimmer dividends, it’s whether the tax gets passed on in the form of higher borrowing costs or tighter credit. With mortgage affordability already stretched, even small upward pressure could make life harder for households. The Treasury says it wants to keep the UK competitive as a global financial hub, but the political pressure to close budget gaps may make a new bank levy tempting. For banks, it raises the risk that their “bumper profits, dividends, and buybacks” could be clipped.
Source: bbc.com

Q: Why was the broom late?

A: It swept in.

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