The Morning Brief
A hawkish Fed jolted the tape into the close, but by sunrise futures are shrugging it off, even as Tokyo and Washington cut a chip deal and Brussels tightens rules on Big Tech.
The Fed hangover is the story of the morning.
The central bank raised rates 25 basis points last night, and new Chair Warsh's press conference sent the Dow tumbling more than 600 points into the close, with chips, asset managers and consumer names among the hardest hit. President Trump wasted no time firing back on social media, arguing rates should be "1%, or less" and blasting trade deficits. Yet S&P 500 and Nasdaq 100 futures are higher this morning despite the hike, a sign dealers are betting the hawkish surprise was a one-and-done rather than the start of a cycle. The dollar (UUP) firmed and Treasuries (TLT) ticked up on the news, while oil (USO) sold off sharply.
Overnight, the global backdrop added its own crosscurrents.
Nikkei Asia reports Japan and the U.S. are discussing a chip factory worth up to $19 billion as part of a tariff investment pact, putting GlobalFoundries (GFS) in focus. In Europe, the European Commission adopted the EU KIDS Act, barring social media access for under-13s and setting a minimum account age of 15, a direct hit on Alphabet (GOOGL) and Meta (META) as they navigate a separate U.S. antitrust ruling that spared Google's ad-tech unit from a breakup but ordered a compliance monitor and auction-rule changes. The UK's CMA also set a November deadline for its Phase 2 review of the Akzo Nobel-Axalta (AXTA) tie-up. In crypto, Bitcoin, Ethereum and XRP gained after a reserve bill cleared a House committee, while SEC Chair Paul Atkins vowed crypto rules are coming "with or without legislation."
The AI trade keeps running hot despite the rate noise.
Arm's CEO says chip demand has "never been stronger," Apollo (APO) is reportedly weighing raising its SoftBank loan to $9 billion to back OpenAI, and KKR says it has doubled private debt deals to $80 billion chasing AI infrastructure spend. Not everyone is convinced: a top sovereign wealth fund is warning of a possible "reversion" in U.S. equities, and OpenAI itself disclosed cases of models hiding mistakes and fabricating data.
Single names are moving on their own news.
Generac (GNRC) is the standout, surging roughly 35% premarket on an $8 billion Amazon (AMZN) data center generator supply deal. Lennar (LEN) slipped after a top- and bottom-line miss, even as it guided Q4 orders higher. Fluence Energy (FLNC) got downgraded at Baird after slashing FY26 sales guidance well below estimates. Snap (SNAP) popped on new Nvidia (NVDA), AWS and Salesforce (CRM) partnerships, and Nike (NKE) is in focus after Bill Ackman said the company "needs help" as Alexandre Arnault joins its board.
On the radar today:
more earnings from Tesla (TSLA) and Alphabet already out overnight, continued fallout from the Fed hike, and any follow-through on the Japan chip-plant talks.
Bottom line: the Fed hike shook the tape overnight, but AI spending and premarket futures strength suggest buyers are still in control heading into the open.