Welcome to earnings season! Banks are typically first to report (thank you, regulators!), offering some insights into the economy and a taste of what’s to come. Fraser had a new story to tell, with strong revenue and a restructuring plan dubbed “Project Bora Bora” that she says is 90% complete. Dimon delivered a familiar tale that somehow manages to instill calm and panic at the same time. We know consumers are resilient and oil prices hurt. Dimon already warned stagflation could be “the skunk at the party” in his shareholder letter. Two other themes to watch from 10-Qs and earnings calls of the Big Four banks.

Last Days of Disco. Investors are trading like frenzied night-clubbers wondering if the party’s about to end. Oil prices are up. They’re down. Peace talks are on! No, they’re not. Who’s betting what in the prediction markets? What’s the Fed going to do? Wait: the new Fed chairman is invested in Polymarket? Sell! Buy! Fear. Greed. That volatility produced a lot of profits and trading revenue for the banks, not to mention record bonuses for the traders. But volatility can reflect both uncertainty and mounting risk.

Don’t panic over private credit. Yes, there’s a $265 billion meltdown. Yes, the Fed wants more details on banks’ exposure to the largely unregulated $1.8 trillion market in non-bank lending. The Big Four did collectively report more than $128 billion in exposure to private credit loans this quarter. But Bank of America reported having “structural insulation” from loss in a market they characterize as “largely a repricing of liquidity.”  Dimon, the man who warned us that “when you see one cockroach, there are probably more” a few months ago, is now “not particularly worried.” Citi, which has arguably just recovered from the 2008 financial crisis, is “constantly stress testing” and  comfortable” with its portfolio. Wells Fargo isn’t worried, either, and Treasury Secretary Scott Bessent doesn’t see a systemic problem. So relax, and go worry about that $39 trillion national debt instead.

Contact CEO Daily via Diane Brady at diane.brady@fortune.com

Top leadership news

Should schools ban generative AI?

A coalition of more than 250 experts and organizations are calling for a five-year moratorium on all student-facing generative AI products in schools. “It’s an unproven, untested product, and we’re giving it to children in the name of improving education or equity or cognition, when none of those things have been proven,” Emily Cherkin, a screen time consultant on faculty at the University of Washington’s Evans School of Public Policy, told Fortune.

Americans gloomy on economy; Wall Street cashes in 

Americans recorded a 74-year low in pessimism about the economy at the same time Wall Street closed the most lucrative trading quarter since at least 2014. Why the disparity? “Stock markets respond to risks shifting around,” said Claudia Sahm, chief economist at New Century Advisors and inventor of the famous Sahm rule for recessions. “Households respond to reality.”

China ‘nearly erased’ U.S. lead in AI 

China has nearly closed the gap with the U.S. in several areas of AI, according to a report released this week by Stanford University’s Institute for Human-Centered Artificial Intelligence. The country has been “gradually gaining ground” on the U.S.’s lead for years, with it now being “nearly erased,” the report says.

The markets

S&P 500 futures are up by 0.2%, following a 0.3% jump yesterday. Market indices were down across Asia-Pacific today: Japan’s Nikkei 225 dropped 1.8%, following a record high yesterday. South Korea’s KOSPI is down 0.6%, Hong Kong’s Hang Seng Index is down 0.9%. India’s NIFTY 50 is currently up by 0.6%, while the STOXX Europe 600 is up by 0.2% in early trading. Bitcoin is surging, inching closer to $76,000.

Around the watercooler

Manycore, the first of the Hangzhou ‘Little Dragons’ to go public, pushes ‘spatial intelligence’ as the next wave of AI development by Nicholas Gordon

Pause AI and Stop AI: Meet the anti-AI groups facing questions after the attack on Sam Altman by Sharon Goldman

Exclusive: Eigen raises a seed round from Benchmark to build the world’s first ‘mutual friend’ by Lily Mae Lazarus

Meet the Americans refusing to pay their taxes in protest of the Trump administration by Jacqueline Munis

Most of you are rejecting AI. The data shows you’re running out of time by Nick Lichtenberg

This CEO pirated video games as a teen and became a hacker for the Air Force. Now he’s built a $3 billion cyber firm by Preston Fore

CEO Daily is curated and edited by Andrew Wyrich, Jason Ma, Claire Zillman, and Lee Clifford.