“We do continue to see the higher-income customers coming to Walmart,” Furner told reporters during the retailer’s annual shareholders’ week in Bentonville, Arkansas, last week. “We’re meeting more of them, they’re buying more, they’re coming more frequently.”

Walmart’s lower-income shoppers have shown “more signs of stress” under the current economy, Furner pointed out. And they’re not the only ones being more strategic with their budgeting; more six-figure earners are turning to discount grocery chains as food costs are inflated by spiking oil prices, tariffs, and global trade uncertainty. 

“That’s really the stress point, is the price of fuel,” the CEO continued. “Hopefully we see some relief on energy prices.”

Walmart has seized the moment, wielding its size and influence as America’s largest food retailer to absorb fuel cost increases and keep prices competitively lower, company executives said. However, that could change in the coming months if gas continues to stay at its current high.

America’s cost-of-living crisis is sending six-figure earners to discount grocery stores 

Shoppers are gawking at their climbing receipts as food costs continue to climb. The median price of a cold brew coffee has increased 3.7% since May 2025, while burgers have shot up 2.4%, in the same time, according to Toast. And the costs of grocery run essentials have soared; the typical price of a pound of ground beef hit a record $6.90 per pound last month, up from about 19% from a year ago. Orange juice prices skyrocketed 21% between January 2025 and February this year, and sandwich bread got 4.3% more expensive. 

Now, Americans are pulling back on entertainment and travel to put food on the table. Around 75% say that they’ve cut spending on other expenses to be able to afford groceries, according to a 2025 survey by Swiftly.

And earlier this month, the CEO of discount grocery store Dollar General, Todd Vasos, revealed that the chain’s shoppers are cutting back on food and other household goods. And it appears to be an escalation from the growing alarm raised by food companies that said that customers were on the hunt for bargains, but were still buying the same amount of food. Now, even shoppers at the budget store are pulling back on the amount they’re picking up.

“Our core customer continues to be financially constrained,” Vasos told analysts last week. “This pressure has been more pronounced on customers in rural communities, as they work to minimize trip distance and make trade-offs in their search for everyday affordability and value.”

Even those who have been considered rich for making over $100,000 are resorting to penny-pinching habits. 

More than seven in 10 of six-figure earners now shop at discount grocery chains to save cash, according to a 2025 report from Clarify Capital. And their financial woes are bleeding into most parts of their lives; around 74% also said they’re cutting back on dining out, 54% are skimping out on entertainment, 51% are getting thrifty with buying clothes, 49% are scaling back their subscriptions, and 49% are spending less on travel.

“In today’s economy, income alone doesn’t guarantee financial peace of mind,” the Clarify Capital report said. “High earners are feeling squeezed by inflation, stressed by social pressure, and more mindful about what it really means to be well-off.”

This story was originally featured on Fortune.com

The CEO of the Amazon-owned company spoke at the Fortune Brainstorm Tech conference in Aspen on Monday alongside Grant LaFontaine, chief executive of popular streaming marketplace Whatnot. Both executives emphasized that real-time connection is core to their business success. They also highlighted that the digital neighborhoods each has made contrast with highly addictive, quick-hit social media channels.

“Social media has become antisocial. Sitting and swiping doesn’t make you feel connected to other people,” Twitch’s Clancy said. “If you think of real-world communities—churches, running clubs—it all comes from shared experiences in real time.”

Twitch and Whatnot have both amassed audiences of millions who view content for hours on the platforms. Twitch has an estimated 35 million daily active users. Whatnot has said it attracts several million daily active users. Whatnot has risen fast in recent years and challenged e-commerce giants like eBay. It had $8 billion in sales last year, with the company succeeding in collectible categories like trading cards and sports cards, but also in fast-growing verticals like women’s fashion and sneakers. It ranks as one of the top shopping apps in Apple’s App Store. 

More from the 25th annual Fortune Brainstorm Tech conference:

Anthropic’s Boris Cherny, creator of Claude Code, says there are days he manages tens of thousands of AI agents at once

Your career needs a ‘gym membership’ to keep up with continuous AI advancements, says Campus founder Tade Oyerinde

Answering a question about Twitch and Whatnot themselves becoming addictive platforms, Whatnot CEO LaFontaine said his company has aimed for long-term customer relationships over short-term exploitation. He also said Whatnot allows its users to set limits, though he did not specify what those limits are.

Both Twitch and Whatnot have struggled to turn hours of broadcasts into profitable businesses. Historically, most of Twitch’s users have been men, and nearly three-quarters of them have been under 35, according to a 2024 report by investment bank Needham & Co. 

Clancy disputed the possibility of Amazon selling Twitch and said the streaming platform would likely not have grown as big as it did if it hadn’t been for Amazon’s 2014 purchase. He added that Amazon may not have fully understood what it was buying at the time, because Twitch’s value is difficult to grasp for those who aren’t active users of the platform. 

Clancy and LaFontaine said that the scraping of data on their platforms by AI labs has not been a major threat, and that AI avatars replacing their human creators isn’t a problem they anticipate. LaFontaine said he expects AI to aid sellers in creating content or engaging with their followers during times when the sellers aren’t streaming. Clancy said AI will allow Twitch’s creators to “access their creativity” by providing tools that make content creation easier.

“AI is trying to take humans out of the equation, and live is one of the formats that keeps humans at the center,” Clancy said. “You connect with people. You can understand them. You can see who they are.”

This story was originally featured on Fortune.com

Speaking on the first day of the 25th annual Fortune Brainstorm Tech conference in Aspen on Monday, Oyerinde posited that AI’s rapid pace of improvement has permanently changed the calculus of education—no matter where you are in your career. All that scrambling to deploy AI that companies and executives are doing right now? That’s not a one-time project that will suddenly reach a final resolution once and for all, said Oyerinde.

“I’m sorry if you’re exhausted,” Oyerinde told the audience. “You’re going to have to do that every year for the rest of your careers, ad infinitum.” 

He predicts organizations will soon staff permanent “continuous learning, continuous development, continuous evaluation” departments, as standard as operations or finance. And with AI models now approaching recursive self-improvement—where each version helps build the next—the curve will only get steeper.

“The era of learn once and then you’re done for life is over,” Oyerinde said. “We’re going to have this exponential takeoff.”

Which brings us to the gym, another place where consistency matters. Just like “everyone in New York wants to be hot and fit for the summer,” and puts in two or three hours a week to get there, Oyerinde said, staying competitive at work will demand the same dedication and focus. 

“If you want to be the equivalent of hot and fit in your career, you’re going to have to spend two or three hours a week learning how to use the most recent advances in AI.”

A faster, smarter way to learn

The reframing of continuous education as maintenance rather than a single milestone also applies to the traditional thinking around the way schools and curriculums are designed and built. Colleges and universities often take the same approach for vastly diverse student bodies. Instead, AI can map each student’s knowledge at an “atomic level” and route them through custom pathways, letting strong students skip ahead while others work on other gaps, explained Oyerinde.

The result, he claims, is teaching people “about five times faster.” That was the rationale behind Campus’s 2025 acquisition of Sizzle AI, a learning startup founded by Meta’s former AI chief Jerome Pesenti.  

Hadi Partovi, who founded Code.org 13 years ago, recently renamed it to CodeAI to reflect the evolution in coding. The organization has focused on helping students learn the basics of computer science and the technology remaking their world. Now that mission has fully embraced coding and AI. 

Every student, said Partovi, needs to grasp how AI actually works, then learn to build with it, and to use it responsibly. 

More from Fortune Brainstorm Tech 2026:

Anthropic’s Boris Cherny, creator of Claude Code, says there are days he manages tens of thousands of AI agents at once

“This is the most powerful technology that mankind has ever created, and anybody has access to that power,” he said.

Partovi described himself as a “cautious optimist,” but suggests not treating AI as “this magic thing that’s been created from above.” Instead, it’s something humans have developed, and everyone should help shape it. That applies to curriculum and learning to code, too. 

However, just because AI can read, write, and do math, doesn’t mean schools will stop teaching these skills, noted Partovi. But the rote parts of coding, he said, like memorizing where semicolons and brackets go, no longer matter. What will continue to be important is computational thinking, logic, planning, and problem-solving.

“I also think we need to start questioning what students should learn,” said Partovi. “My guess is nobody here in this room uses calculus day to day, and no employer or almost no employer except maybe SpaceX or a few other places, but mostly nobody is hiring the calculus experts. But every student is struggling and thinking they need to get really good at it for almost no purpose whatsoever.”

And as education is pushed to evolve, given the way AI is reshaping learning and job opportunities, there’s a need for faster evolution in the way learning takes place.

“The gap between what’s relevant and what schools are teaching is growing as fast as the AI models are changing,” said Oyerinde.

And as students and companies adapt to the need for continuous new knowledge about AI, the thinking applies to those who are well beyond school or prime executive age. Karin Klein, founding partner at venture firm Bloomberg Beta, said AI can benefit all rather than a few. Klein participates in “talking circles” with icon Gloria Steinem, who is a lifelong learner.

“At 92, Gloria’s still learning,” said Klein. “I taught her how to use AI about a year and a half ago, so we all have no excuses, right?”

This story was originally featured on Fortune.com

“This morning I was managing maybe a few hundred,” he said during the opening session of the 25th annual Fortune Brainstorm Tech conference in Aspen on Monday. “Some days it’s … thousands, or tens of thousands.” This is a big change from even just a year and a half ago, he explained, when developers were running one instance of Claude Code in one terminal window. 

“Fast-forward to today, it looks very different,” he said. “You have a Claude Code, but it has subagents that are other Claudes.” The user is no longer prompting Claude, he added: “It’s actually another Claude that does the prompting.” 

This massive speedup in coding will be as consequential as the printing press, he explained, which was developed by Johannes Gutenberg around 1440 and dramatically lowered the cost of producing books and expanded literacy. Just as the printing press ultimately enabled transformative societal changes such as the Renaissance and Industrial Revolution, Cherny said he believes AI coding assistants are lowering the barriers to software creation and could unlock a similarly profound wave of innovation whose full implications we are only beginning to understand. 

Last week, Anthropic published a blog post titled “When AI Builds Itself,” outlining how it is increasingly using AI systems to help develop future AI models. Taken far enough, and with enough compute, the blog post said such an approach could lead to recursive self-improvement—an AI system capable of autonomously designing, building, and improving its own successors.

Cherny said that with Claude Code writing all the code for Anthropic—leading to an 8x increase in the amount of code written at the company since the beginning of the year—“I think this might be the first product that actually just takes off.” Claude Code is fully writing itself, he said, and is also doing its own security review. 

“We’re starting to get to the point where it has ideas,” he said. “It’s looking at GitHub, it’s looking at [X]; it’s figuring out, ‘What should I build next?’” 

Often, he added, he wakes up in the morning, and Claude has already taken action on a variety of ideas. “It’s quite exciting, because to me it means I can do much more, and the role of a builder is just totally changing,” he said. 

But there are also risks, which Anthropic is taking very seriously, he said. When asked if he was worried about recursive self-improvement, Cherny said yes: “It’s one of the big risks for AI.” 

This story was originally featured on Fortune.com

“The U.S. and Israel did something like ten times as many strikes in the first month of the war as they did in the entire Gulf War,” Schimpf said at Fortune‘s Brainstorm Tech conference in Aspen on Monday. “This is the new normal of what these conflicts are going to look like.”

Schimpf’s remarks opened on a pointed note: back in March, when he was interviewed for a profile of Anduril in Fortune, he predicted that the Strait of Hormuz could still be blocked by the time the Brainstorm Tech conference rolled around. It was.  

For Schimpf, that’s not an anomaly, it’s the new blueprint. Modern conflicts, he argued, are no longer primarily about destroying military assets; they’re about strangling economies. Data centers, oil refineries, and shipping lanes are the targets now, and low-cost drones have made striking them cheaper than ever. “The economic warfare that is effectively the Strait of Hormuz, this is the new normal of what these conflicts are going to look like,” he said.

More from Fortune’s 25th Brainstorm Tech:

Anthropic’s Boris Cherny, creator of Claude Code, says there are days he manages tens of thousands of AI agents at once

Twitch CEO: Social media has become ‘anti-social’ and can’t match the shared, human connection of live streaming

Your career needs a ‘gym membership’ to keep up with continuous AI advancements, says Campus founder Tade Oyerinde

For the U.S. he said, the new reality is a particularly tricky problem. It’s “essentially impossible to inflict economic pain on China without catastrophic economic pain on the U.S.,” Schimpf said.

That logic flows directly into how he thinks about Anduril’s business. Schimpf was especially candid about supply chain fragility. He noted that the U.S. fired through roughly 850 Tomahawk missiles in four weeks of conflict with Iran—burning through a stockpile that the Pentagon had been replenishing at a rate of about 90 per year. 

His proposed solution is not just redesigning weapons to be more manufacturable—it’s moving upstream into raw materials. “We’re looking at how do we secure supply of germanium years out,” he said, pointing to China’s systematic acquisition of critical minerals, including rare earth magnets and copper film suppliers, as a strategic stranglehold the U.S. has been slow to counter.

The CEO was equally as candid speaking about the current defense tech valuation frenzy—where some companies are raising at 50x or even 100x forward revenue. “I do think there is a bit of a bubble.” He invoked the Uber-and-Lyft dynamic, arguing that in any hot category, roughly 90% of returns accrue to the top two players, and that companies chasing stratospheric valuations are setting themselves up for an impossible growth bar. Anduril has been deliberate about its own pricing, he said, but acknowledged the temptation is real.

An Anduril listing on the public markets is a long-running subject of speculation. Schimpf, when pressed on the IPO question, declined to give a timeline. In March, the company raised a $5 billion Series H raise at a $61 billion valuation, led by venture capital firms Thrive Capital and Andreessen Horowitz. Last week, Anduril cofounder Trae Stephens told Fortune he saw the company ideally going public in the next couple of years. 

Schimpf, however, made an argument for the advantage of remaining private. “Right now, we’re in a hype-y time. We’re growing like crazy. Why would we go out right now? We don’t need to, he said.” Schimpf laid out a simple 3-point framework for contemplating an IPO: If you go public in the middle of a “hype cycle,” when growth is slowing, or when you’re more than two years from profitability, and you’ll have a bad three-year stock return. Anduril checks at least one of those boxes, he said, citing the current industry-wide hype cycle, and therefore sees no rush.

This story was originally featured on Fortune.com

On Monday, the French insurer unveiled AXA Global Private, a hub that combines life insurance products with wealth management and succession services for rich families in Asia. The platform will also bundle niche coverages often demanded by the wealthy, such as kidnap‑and‑ransom, art collection, and family‑office insurance. 

“After COVID when the border reopened, we saw mainland Chinese customers coming back to Hong Kong, but these were high‑net‑worth customers, rather than the mass affluent,” says Sally Wan, CEO of AXA Greater China and the newly appointed head of AXA Global Private. “They were looking for diversification and protection, especially for family business and legacy planning.”

Wan says wealthy families increasingly use participating life policies for estate planning and efficient tax management, often wrapping 5% to 10% of their total assets into insurance contracts that behave “like a trust.” Policies sold in Hong Kong are typically denominated in U.S. or Hong Kong dollars and offer exposure to asset classes that are harder to access in China. “Just Hong Kong may not be enough” to serve those clients, Wan adds.

Mainland Chinese policyholders account for roughly half of AXA Hong Kong’s overall portfolio by premium, according to Wan. Many of those customers come through private banks.

“The difference is that for high‑net‑worth individuals, the premium size is much larger and the underwriting, financial planning, and tax‑planning needs are much more complex,” Wan says.

The group can also insure art collections, provide kidnap‑and‑ransom coverage for families traveling in higher‑risk markets, and offer bespoke protection for family offices and their physical and cyber assets. “If you look at other insurance companies providing high‑net‑worth products like art insurance, they probably need to purchase from somebody else,” Wan argues. “We can do it all in one shop.”

AXA, No. 103 on the Fortune Global 500, generated 116 billion euros ($133 billion) in revenue last year, a 6% increase. Net income rose 24% to 9.7 billion euros ($11.2 billion). The company is refocusing its attention back to its core product of insurance, selling AXA Investment Managers to BNP Paribas last year. 

Hong Kong boom

Hong Kong narrowly overtook Switzerland as the world’s largest cross-border wealth hub last year, according to analysis from Boston Consulting Group. Cross-border wealth in the Chinese city rose to $2.9 trillion, thanks to surging inflows from mainland China and the city’s strong IPO market. BCG forecasts the gap will widen by the end of the decade: Hong Kong will be home to $4.6 trillion in cross-border flows, compared with $4 trillion in Switzerland. 

Still, BCG’s analysis suggests that Hong Kong is primarily a hub for mainland China, which contributed almost 60% of cross-border inflows last year. The firm estimates that mainland Chinese wealth grew by 15% last year, and will continue to grow by 9% a year through 2030.

Courtesy of AXA

Wan isn’t surprised that Hong Kong overtook Switzerland: Several organizations, including the city’s government, expected to reach this milestone by the end of the decade. “Now it’s just faster,” she says. “The majority of the flow is coming from mainland China, but it’s also coming from Taiwan, Korea, and other places in Asia like India.” She credits Hong Kong’s booming financial sector, including its IPO market and family offices, for the surge in wealth.

Hong Kong’s government has also spent the past few years aggressively pitching the city to global capital. Wan sits on the market development committee of the Financial Services Development Council, an advisory body representing the financial sector. 

“During COVID, there were a lot of misconceptions about Hong Kong,” she says. “The government has been going out to promote the city, and the result is that family offices are coming back.”

Wan suggests that AXA might expand the Global Private platform to the Middle East after Asia. 

She concedes that while flows into Hong Kong from the Gulf remain “very limited,” they’ll likely build as more Middle Eastern entrepreneurs set up Asian operations and relocate part of their businesses and families to the region. “It will be coming, though probably not as much as the China flow,” she says.

Aging populations

Hong Kong is aging quickly. With a median age of 47.9 years, it is one of the oldest cities in the world. The city reported around 32,000 births last year, leading to a fertility rate of just 0.73 births per woman. 

“Aging is giving insurers a lot more pressure because people live a lot longer,” Wan says. “In the past, people may have had enough money to live for another 20 years after retirement. Now, they’ll live for 30. What happens in that last 10 years?”

Wan argues that high‑net‑worth clients, who typically combine life, health, and long‑term-care coverage with detailed financial planning, are less likely to be caught unprepared. Her bigger worry is the mass market in Hong Kong and across the Greater Bay Area. Hong Kong has historically lacked sufficient rehabilitation and eldercare facilities.

“Hong Kong has not come to that realization yet,” she says. “The education has not been spread enough.”

This story was originally featured on Fortune.com

The Defense Department announced the designations Monday in an update to a roster of companies that it has determined aid the People’s Liberation Army. The companies were included in a previous version that was posted briefly in February before being withdrawn minutes later without any explanation, sowing confusion about the Pentagon’s intentions. 

With the move, the US has now declared that three of China’s most prominent artificial intelligence champions — Alibaba, Baidu and Tencent Holdings Ltd. — are aiding the Asian country’s armed forces. Tencent was added to the list in 2025 and has been seeking its removal. The designation of BYD, meanwhile, targets China’s top electric-vehicle company.  

American depositary receipts in Alibaba fell 1% to $119.84 at 3:40 p.m. New York time. Those of Baidu were down 2.1% at $119.14. BYD’s receipts fell 0.7%. 

Read More: US Briefly Names Alibaba, Baidu as Firms Aiding China’s Military

The newest version of the Pentagon’s so-called 1260H list also restored two Chinese memory chipmakers — ChangXin Memory Technologies Inc. and Yangtze Memory Technologies Co. — that had been previously designated by the Pentagon but were removed from the version that briefly appeared in February. 

While the list carries few immediate legal repercussions, the Pentagon is increasingly using it to restrict companies’ abilities to contract with the US military or to receive research funding. A 1260H designation also serves as a warning to US investors, and is widely considered a red flag that can precede more punitive trade restrictions. 

None of the companies immediately provided comment when contacted by Bloomberg News. Many have previously rejected US claims that they support the Chinese military. 

The Chinese embassy in Washington had no immediate comment. Liu Pengyu, an embassy spokesman, said previously that “China urges the United States to immediately correct its wrong practices and provide a fair, just, and non-discriminatory business environment for Chinese companies.”

The list was released less than a month after President Donald Trump met with his Chinese counterpart Xi Jinping in Beijing, where the two leaders discussed some of the sticking points on trade between the world’s two largest economies. Their closely watched summit failed to yield a significant easing in tensions over advanced technology, especially AI.  

“The Pentagon’s republished Chinese military companies list serves as a post-summit reality check,” said Craig Singleton, senior China fellow at the Foundation for Defense of Democracies. “The Xi-Trump meeting did not pause competition; it clarified where competition will continue,” said Singleton, who tracks the 1260H designations closely.

Read More: Frail Trump-Xi Truce Highlighted by Pentagon’s Botched Blacklist

In releasing its updated list, the Pentagon said the named entities qualify as “Chinese military companies” operating directly or indirectly in the US based on their alleged activities “providing commercial services, manufacturing, producing, or exporting.”

Bloomberg News reported in May that the Pentagon’s initial decision to remove YMTC and CXMT was the reason the list was quickly withdrawn in February. Trump national security officials thought that removing the chipmakers — especially ahead of the planned meeting between the US and Chinese leaders set at the time for late March — would incorrectly suggest that the US no longer considered them a threat, according to people familiar with the matter. 

Officials also feared the move would strengthen the Chinese companies at the expense of Micron and two other major memory players from US ally South Korea: Samsung Electronics Co. and SK Hynix Inc., according to the people.

Immediately after the list’s publication, a senior White House official called the Pentagon to express displeasure that their concerns had been ignored, Bloomberg reported. Defense officials raced to get the list taken down just minutes after it had been posted. 

The snafu gave companies a monthslong opportunity to press for further changes via a mix of lobbying and legal strategies. In the end, the version published in June was substantially similar to the version published in February and then withdrawn — except for the reinstatement of the two chipmakers. 

Read More: World’s Biggest Battery Maker CATL Seeks Relief From US Curbs

Congress first ordered the Defense Department to make a list of Chinese military companies operating in the US in 1999. The Pentagon finally began doing so more than two decades later, after lawmakers and the first Trump administration revived the issue. 

Due to China’s “military-civil fusion” policy, under which Beijing mandates private-sector collaboration with the country’s armed forces, the Pentagon could theoretically justify designating almost any Chinese company with a US presence.

The version that was briefly published in February and essentially republished Monday is among the most significant updates in the list’s history, targeting nearly 200 companies — many of them among China’s most prominent.  

John McEntee, a former senior Trump White House official who lobbies for Tencent, criticized the company’s continued inclusion on the list. 

“By expanding the list to Chinese car companies like BYD and NIO, they’re revealing how ridiculous the justification is. By their logic, Ford and GM should be classified as American military companies,” he said.

Read More: Wi-Fi Giant’s US Future Hinges On Its Claimed Split From China

One remaining point of confusion emerging from the newest update is the addition of China-based TP-Link Technologies Co. Ltd. — which is focused on selling routers to customers in China — rather than US-headquartered TP-Link Systems Inc., which has come under US scrutiny for the possible national security risks posed by its dominance in the market for wireless routers.

To be added to the list, a company must operate directly or indirectly in the US. 

“As a U.S.-based company incorporated in California, TP-Link Systems Inc. is not subject to this posting or its associated restrictions,” said a company spokeswoman. She added that TP-Link’s founder and CEO, Jeffrey Chao, lives in California “and is not and never has been a member” of the Chinese Communist Party.

This story was originally featured on Fortune.com

The chipmakers that had their worst session since 2020 on Friday (Micron, Broadcom) were Monday’s best performers, up 6.5% by midday. Wall Street appears to consider Friday as a welcome easing off of a record-setting rally, as opposed to a genuine repricing of the AI trade that other analysts warned of.

New York’s bad dream was, overnight, Asia’s waking one. South Korea’s Kospi—the best-performing major index in the world this year—plunged as much as 8.8% at the open Monday, triggering a 20-minute trading halt, its third of 2026, and closed down 8.29%. 

Samsung Electronics and SK Hynix—the two memory-chip makers that together make up roughly half of the index—fell about 10% and 8%, respectively; the won opened at a 17-year low against the dollar. Japan’s Nikkei lost 3.9%, China’s CSI 300 2.1%.

Nvidia’s Jensen Huang called Friday’s selloff a buying opportunity, telling investors demand for AI chips keeps outrunning supply. It echoed the case he made at Nvidia’s GTC conference in March, when he projected $1 trillion in combined sales for the company’s Blackwell and next-generation Vera Rubin chips through 2027—double an earlier forecast—and called demand “off the charts.” It appears that the markets listened to him.

‘A healthy reset’

Morgan Stanley’s chief equity strategist, Mike Wilson, called Friday “a healthy reset,” noting markets “rarely move in a straight line” at the pace seen since the March lows, and reaffirmed an 8,000 target for the S&P 500, now trading around 7,460. Chris Larkin, managing director at E*Trade From Morgan Stanley, made the same point from the other side: After nine straight weeks, he wrote the market “was arguably due for at least a reset.”

“Last week didn’t derail the rally, but it may have made it more sensitive to negative surprises in the near term,” Larkin wrote in a note.

The negative surprise was positive news for the economy: A stellar May jobs report. Employers added 172,000 workers, roughly double what forecasters expected, and the strength was enough to push traders to fully price a quarter-point Fed rate hike this year, according to Oxford Economics.

That’s because a labor market that hot gives the Federal Reserve no reason to cut and some reason to hold or hike—and higher rates fall heaviest on the high-growth AI names that had led the rally. The May report was the first jobs data of Kevin Warsh’s tenure as Fed chair, and it makes it harder for him to appease President Donald Trump with a rate cut. Trump said in an interview that aired Sunday on Meet the Press that the report was “great” and insisted, “There’s no reason to raise interest rates,” which he said would “kill success.”

Warsh, he added, should “do whatever he wants.”

Fearing a rate hike

The reason Trump and many on Wall Street fear a rate hike is that it could uniquely hurt the AI trade. A stock that earns most of its money years out is worth less when the interest rate used to value those future earnings goes up, which is why the Nasdaq fell 4% on Friday, while the Dow, with less riding on tech, lost 1.4%. The two-year Treasury yield, the most rate-sensitive point on the curve, rose on Friday to its highest since February 2025, while the 10-year pushed above 4.5%.

Treasury yields barely moved Monday, which shows markets are looking more toward inflation, Larkin says: That data that will come out this week as the May consumer price index (CPI) arrives on Wednesday and the producer price index (PPI) Thursday. The Fed is already in its pre-meeting blackout, so there are no officials to talk the numbers up or down. If inflation runs hot, the surprise Larkin described might arrive on schedule.

The other variable is the war in Iran. Even as fighting intensified over the weekend—Iran struck Israel overnight in retaliation for Israeli attacks on Lebanon, and Israel struck back—by Monday morning in New York both sides had pledged to de-escalate. The markets could be pricing in an end to the war in Iran, though crude jumped more than 4% on the strikes before trimming the move to about 1.5%—hardly a market pricing in peace. If there’s another flare-up, it could also disrupt the AI rally.

The demand story faces an especially critical test Friday, when SpaceX is set to price what would be the largest IPO in history at a $1.75 trillion valuation. Much of the case rests on AI: The company has lined up roughly $75 billion in future contracted compute revenue, including a $30 billion deal under which Google will pay $920 million a month to rent about 110,000 Nvidia chips from the data centers SpaceX picked up in its xAI merger.

Not everyone takes the number at face value: Morningstar said it values the company at less than half its target. The question under the chip rebound and the question under the IPO are the same one: whether AI demand justifies the price. But Friday will give one real answer.

This story was originally featured on Fortune.com

But the administration launched a probe this month into Brazil’s deforestation as part of Trump’s implementation of new tariffs, which entail investigations into countries’ trade practices. 

Brazil is home to about 60% of the Amazon rain forest, which absorbs carbon dioxide that would otherwise enter the atmosphere and contribute to global warming. Legal deforestation—mostly as a result of cattle ranching and agricultural expansion—has cost the country about 3.7 million acres per year.

To be sure, Trump hasn’t changed his mind about climate change, though his sudden concern over deforestation is still ironic. 

Instead, the U.S. Trade Representative (USTR) announced a wave of new tariffs on dozens of major U.S. trading partners under Section 301 of the 1974 Trade Act, alleging they failed to enforce bans on imports made with forced labor. 

The levies included an additional 12.5% import tax on Brazil, which was accused of six practices that unlawfully limit U.S. trade, including unfair and preferential tariffs, ethanol market barriers, as well as illegal deforestation. 

Illegal logging and land-clearing often rely on uncompensated labor, and the products that come from deforestation practices may have artificially low costs as a result of unfair labor practices, which undermine competition. The USTR’s investigation alleges Brazil violated its environmental laws, but does not explicitly mention climate change.

The new duties under Section 301 come after the Supreme Court struck down tariffs imposed under the International Emergency Economic Powers Act. As the Trump administration looks for other ways to preserve the cornerstone of its trade policy, it imposed tariffs under Section 122, which allow temporary levies of up to 15%. Those 150-day tariffs will expire on July 24, raising the stakes for Section 301 tariffs to stick.

“He’s running out of options,” Georgetown University government professor Marc Busch, an international trade policy and law expert, told Fortune.

Trump’s tariff tensions

However, Trump’s tariff policy has been largely unpopular with both U.S. companies and households. As tens of thousands of importers pursue refunds to recoup costs from more than a year of import taxes, Americans are growing increasingly skeptical of Trump’s affordability message.

Busch noted that Democrats have consistently pushed against deforestation and suggested that as tariffs remain unpopular, framing them around ethical issues favored by left-leaning politicians could give them a boost, especially ahead of midterm elections.

“The big question is, when is Trump satiated, and with what goal in mind?” he said. “And does this impact the narrative about affordability heading into the midterms?” 

To Busch, the USTR’s investigation into Brazil under Section 301 is discredited by Trump’s cooling trade relationship with Brazil. Last year, Trump imposed a 50% tariff on Brazil in response to its prosecution of former president and Trump ally Jair Bolsonaro, while the new president, Luiz Inácio Lula da Silva, has pushed back on Section 301 investigations. 

“Don’t read too much into it. See, this isn’t serious,” Busch said. “It’s just your standard kitchen-sink approach: You throw everything at Brazil because Trump is upset with Brazil, and you see what sticks. And you hope that what sticks gives you somewhere between a 10% and a 20% tariff as a remedy.”

USTR did not respond to Fortune’s request for comment.

America’s deforestation flip-flop

There’s an added layer of irony to the Trump administration admonishing Brazil over deforestation in particular, Busch explained. The U.S. has been a staunch opponent of the European Union Deforestation Regulation (EUDR), which requires companies to prove that certain commodities, such as soy and wood, do not originate from land that has been deforested. 

The U.S. and more than a dozen other countries—including Brazil—have argued these metrics are difficult to measure, and audits are expensive. The EUDR has also effectively priced Brazil out of the European soy market because so many farmers can’t afford the audits.

By accusing Brazil of illegal deforestation, the U.S. is not just contradicting its own stance calling out deforestation regulation, it’s also emulating a policy it has historically opposed, Busch pointed out.

“You’re doing this to protect your market from certain imports,” he said. “And ironically, now the U.S. takes a page from the EUDR playbook and castigates Brazil for more or less the same thing.”

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The Sam Altman-led firm submitted paperwork for an initial public offering with the US Securities and Exchange Commission, the company said. OpenAI is working with Goldman Sachs Group Inc. and Morgan Stanley on a potential listing as soon as in the fall, people familiar with the matter have said.

Deliberations are ongoing and details of the IPO plan could change. “We have not decided on timing yet; it may be a while because there are things we want to do that are likely easier as a private company,” the company said. “But it’s a complicated set of tradeoffs and this gives us the option to go public sooner if that ends up being best.”

Founded more than a decade ago, OpenAI kicked off the generative AI boom with the release of ChatGPT in late 2022. Though the company and its flagship chatbot remain synonymous with AI for many people, OpenAI also faces a number of challenges, including heightened competition from Anthropic PBC and Alphabet Inc.’s Google. 

OpenAI reportedly missed certain internal revenue and user growth targets. Several key executives have departed or stepped back from their roles. And the company has been working to streamline its sprawling product lineup.

A public debut in 2026 would also pit Altman squarely against Elon Musk on a different plane than the failed lawsuit against OpenAI and its CEO. SpaceX, Musk’s rocket, satellite and AI firm, is targeting an IPO raising more than $75 billion at a more than $2 trillion valuation as soon as June, Bloomberg News has reported. 

OpenAI has already dwarfed even SpaceX’s IPO in a single funding round. The company completed a deal to raise $122 billion from investors at an $852 billion valuation.

AI companies are racing to raise tens of billions of dollars to buy chips and data centers and build more advanced AI systems. In February, OpenAI told investors it was planning to spend about $600 billion on AI infrastructure by 2030.

This story was originally featured on Fortune.com