Visa and more report

Good morning investors! Stocks went higher thanks to great earnings.

Today we cover:

📊 Economy and News

Semiconductor shares are suffering one of their worst months on record as investors question how long the artificial-intelligence spending frenzy can last. The Philadelphia Semiconductor Index has dropped more than 22% in July, ranking among its steepest monthly declines ever.

Worries center on circular financing deals, intensifying competition, and a flood of AI-related debt. A newly reported $250 billion arrangement between Nvidia and OpenAI, in which Nvidia would help back debt for a massive SoftBank data-center project in Ohio, only deepened the unease. Analysts noted that stocks fell despite the backstop, suggesting the correction has further to run. Parallel credit guarantees by Alphabet for Anthropic’s data centers raised similar questions about the sustainability of the boom.

Chinese advances are adding pressure. Shanghai Aishengna has begun producing deep-ultraviolet lithography machines critical for advanced chips, hitting Dutch equipment maker ASML. At the same time, open-weight models such as Moonshot AI’s Kimi K3 are offering lower-cost alternatives to OpenAI and Anthropic products, prompting some companies to diversify and scale back spending.

Jim Cramer of CNBC’s “Mad Money” described the move as Wall Street “fleeing” the pure AI infrastructure trade. Memory makers that soared on shortages—Western Digital, Micron, Seagate—have reversed sharply after parabolic runs. Western Digital, which peaked near $746 in mid-June, has since fallen nearly 40%. Cramer called such moves classic boom-bust patterns that investors must sell.

Capital is rotating instead into companies with broader growth drivers: Costco, Walmart, ServiceNow, Salesforce, and Johnson & Johnson, the latter hitting an all-time high after settling talc litigation for a lower-than-expected $5.5 billion. Cramer remains constructive on Nvidia and Intel, arguing their demand is more durable than temporary pricing power in memory chips.

Veterans of past cycles note that similar “speed bumps” occurred in the 1990s semiconductor boom before the eventual peak. Whether July’s sell-off marks a temporary pause or the start of a deeper AI unwind remains the central debate on Wall Street.

Reminder: The Strategic Petroleum Reserve has fallen to the lowest level since March 1983.

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📈 Stocks

S&P 500 7,428.78 (+0.21%)
DJIA 52,747.32 (+1.04%)
NASDAQ 24,876.91 (-0.23%)
BRENT CRUDE 84.04 (-4.13%)
* Prices as of Mar 3rd, 12:20 AM UTC

Here are major earnings from yesterday:

Surprising: Shein revealed in documents connected to its IPO that the Federal Trade Commission is investigating its U.S. business. In other news, OpenAI’s rogue agent compromised an account at a second tech firm.

💵 Personal Finance

Attorneys general from 44 states told the Commodity Futures Trading Commission that the agency lacks authority to regulate sports-related event contracts on prediction markets.

In a letter led by Ohio AG Andy Wilson, the coalition argued the CFTC’s proposed rule exceeds its statutory powers, conflicts with the Constitution, and is arbitrary. They urged the agency to scrap the rule and confirm that sports bets fall under state law, not federal regulation of designated contract markets.

Florida, Georgia, New Hampshire, Missouri, and Texas did not join.

The letter arrived as the public comment period on the CFTC’s first draft prediction-market rule closed. That draft focuses heavily on sports contracts and defines “gaming” in a way critics say improperly preempts state authority.

Prediction platforms and the CFTC maintain these contracts are federally regulated swaps. States counter that they are simply sports betting under their jurisdiction. The fight has already produced lawsuits against nine states and conflicting court rulings.

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