• Markets: Stocks swung back up yesterday after cooler-than-expected inflation and blockbuster bank earnings put investors in a cheery mood. At the complete opposite end of the spectrum was Lucid, which plunged and was halted for volatility following a report that it was considering bankruptcy (which it denied).

BROKEN RECORDS

Mike Kemp/Getty Images

The five biggest banks in the US reported record earnings that exceeded even the rosiest of expectations yesterday, thanks to the AI boom and the trading volatility created by the war with Iran.

JPMorgan, Bank of America, Goldman Sachs, Wells Fargo, and Citigroup combined to report $49 billion in profits in the latest quarter. How did these wise Wall Street institutions flourish in Q2, while many people on Main Street struggled to afford gas and groceries?

• Trading profits: The $85 billion IPO from SpaceX brought bullish retail investors out in droves and netted the banks involved ~$500 million. The trading volatility around the repeated opening and closing of the Strait of Hormuz, and the back-and-forth on AI representing either a brighter future or the end of the world, also drove revenue for banks.
• Fees: No, not the $3 fee for using an ATM. The much higher ones that come from investment banking during a rush of mergers and acquisitions, along with deals for AI companies building out their infrastructure.

Proceed with caution

JPMorgan Chase CEO Jamie Dimon tempered excitement during the bank’s earnings call. While he lauded the “resiliency” of the US economy, saying business conditions are nearly “as good as it gets,” Dimon also warned: “Several risks are shifting below the surface like tectonic plates, including geopolitical tensions and wars, sticky inflation, large global fiscal deficits, and elevated asset prices.” He added, “We cannot predict how these forces will ultimately play out.”

Zoom out: During Goldman Sachs’s earnings call, ⁠CEO David Solomon said the banking industry “is in the middle of an AI capex super ​cycle” due to AI infrastructure buildouts. Then there are the AI IPOs in the offing: Anthropic’s will be led by Goldman and Morgan Stanley, while OpenAI is still deciding which banks will be involved.—DL

      

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They grabbed some guy named Paul to announce it because nobody else in the office wanted to.

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World

Tour de headlines

Brendan Smialowski/Getty Images

🧊 Inflation cooled last month, but it may not last. For the first time in six years, inflation eased in June, as the brief ceasefire between the US and Iran led to a steep decline in energy prices. But with hostilities resuming, experts believe inflation is likely to heat up again. In remarks delivered to Congress yesterday, Federal Reserve Chairman Kevin Warsh acknowledged that the central bank has more work to do to tame rising prices. “There might be some who look at today’s data and say ‘mission accomplished,’” he said. “That is not my view.”

🚢 Trump walked back his 20% Hormuz toll demand. One day after announcing a 20% tax on cargo ships passing through the Strait of Hormuz, President Trump abandoned the plan, saying he wants to replace it with “MASSIVE” investments in the US from Gulf states. Trump’s initial toll demand was largely met with skepticism, with industry and geopolitical experts calling it unworkable and a UN agency deeming it illegal. The president’s secretary of state, Marco Rubio, had previously said that no country could impose tolls on the strait, as it violates international law. Not long after Trump’s reversal, the US military resumed its blockade of Iranian ports.

🦖 T. rex fossil sold for a record $50.1 million. The 12.5-foot-tall, ~67-million-year-old Tyrannosaurus rex skeleton became the most expensive dinosaur fossil ever sold at auction, per the New York Times. Sotheby’s, which brokered the sale, would not divulge the buyer’s name or location. Nicknamed Gus, the fossil surpasses a stegosaurus that sold for $44.6 million to hedge fund billionaire Ken Griffin in 2024. While some very wealthy person now gets to upgrade their living room, scientists complain that the booming private fossil market is pricing museums out of access to dinosaur skeletons for research and public engagement.—AE

EMPIRE STATE NOT BUILDING

Niv Bavarsky

Cold water is being thrown on new data centers in the Empire State, but not for them to slurp up. Yesterday, New York became the first state to temporarily ban approvals for resource-hungry jumbo data centers that AI companies are rushing to build.

Governor Kathy Hochul signed an executive order pausing permits for new data centers that use 50 or more megawatts of power for up to a year. However, projects with prior approval can still proceed.

Hydration break brainstorm

Hochul said the moratorium will give regulators time to study how to ensure that the facilities don’t raise local electricity bills, undermine the water supply, or cause noise pollution. The governor plans to require large data centers to produce their own electricity or pay extra to access New York’s grid. She also wants to have operators invest in grid infrastructure, while removing tax subsidies.

• Environmental activists and some fellow Democratic politicians cheered the pause.
• But local unions said it threatens construction jobs and tax revenues, plus some critics said it gives China an advantage in the AI race.

Meanwhile, Hochul is weighing whether to sign into law a stricter moratorium recently passed by the state legislature.

Beyond New York…lawmakers in several states are pushing for new data center pauses. Meanwhile, the White House opted for a lighter touch, recently getting tech giants to pledge to cover the energy generation for new data centers.

Big picture: Most Americans say they oppose nearby data center construction, and the Financial Times reports that local pushback disrupted $130 billion worth of US projects in Q1 of 2026.—SK

      

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WASH YOUR GREENS

Marvin Joseph/Getty Images

Romaine is always causing problems. An explosive, diarrhea-causing outbreak of the cyclospora parasite has been running flowing spreading making its way through the Midwest, most prominently in Michigan.

Health officials haven’t identified a source of the outbreak but are investigating Taco Bell, according to the Washington Post. A few Michigan locations aren’t serving lettuce or cilantro out of caution.

Here’s what else we know about the outbreak:

• The parasite usually spreads through particles of infected human feces that get into water and end up on fresh produce through either irrigation or cleaning. Produce that has high water content—like leafy greens, berries, and snow peas—is particularly susceptible.
• The parasite isn’t deadly, but it can last for several months if left untreated, causing severe dehydration and, of course, some unforgettable bathroom visits.
• Michigan’s health department reported at least 3,309 cases as of yesterday, while the CDC said 34 states have reported cases.

Unlike the stool this outbreak will cause, tracking down the source is especially hard. Symptoms can be delayed for weeks (and tracking relies on people remembering exactly where and when they ate certain items). Plus, the CDC scaled back one of the programs it used to proactively track cyclospora last year.

In a statement, Taco Bell said that the health and safety of it guests are its “top priority” and noted that officials haven’t confirmed a link to the restaurant.

What you can do: Wash and scrub your produce, avoid bagged lettuce, cook your veggies, and wash your hands.—MM

      

Sam’s stock of the week

IBM has its Black Tuesday

Cheng Xin/Getty Images

On Wednesdays, the Brew’s Sam Klebanov highlights a fascinating stock, commodity, or other asset that’s worth your attention.

Yesterday was the worst day for IBM’s stock since at least 1968: Shares of the company plunged more than 25% after it said customers are snubbing its computers and software and splurging on AI infrastructure instead.

Ignored business machines

IBM told investors that it was surprised by just how much the AI frenzy is eating into its corporate customers’ budgets:

• IBM’s new gadget, the industrial computer z17, didn’t get as much takeup as it expected.
• Sales of software, a product category IBM was banking on to drive growth, also slowed.
• The company earned $2.93 per share in Q2, below the $3.01 that analysts projected.

Plus…IBM admitted that it was further hurt by Anthropic’s release of the Mythos AI model, which has forced companies to spend elsewhere to fortify their cyber defenses amid worries that the tech could help hackers.—SK

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Eni’s $225m investment agreement. Italy’s largest oil producer has agreed to invest up to $225m in EnergyX, a $1b+ private unicorn that’s primed to lead the lithium race. Their portfolio holds up to 15m+ tons of untapped lithium. General Motors, POSCO, and 50,000+ investors are in, too. You can join them, but hurry. Invest in EnergyX by tomorrow’s deadline.

News

What else is brewing

• Uber is in advanced talks to acquire German food-delivery giant Delivery Hero for about $13.7 billion, Bloomberg reported.
• ICE is reportedly suspending most traffic stops temporarily after its officers fatally shot two people in Maine and Texas in the span of a week.
• E. Jean Carroll received $5.6 million from President Trump as part of the civil trial that found him liable for sexual abuse and defamation.
• United Airlines said that its Airbus A321XLRs will have a row with an empty middle seat and a shared tray table for customers in the aisle and window seats.
• SCOTUS Justices Amy Coney Barrett and Elena Kagan asked a House committee for more security funding, the first time members of the Supreme Court have testified before Congress since 2019.
• Spain defeated France 2–0 to advance to the World Cup final on Sunday, where they’ll play the winner of England vs. Argentina.
• Reese’s Pieces launched its first new flavor in a decade, but you’re not allowed to try it if you pronounce it Ree-sees Pee-sees.

recs

• Five new rollercoasters in the US to try this summer.
• How to protect your roses from black spot disease.
• An endless scroll that’s designed to put you to sleep, not keep you up.
• A nifty tool for de-sanding yourself at the beach.**

^{*A message from our sponsor. **This is a product recommendation from our writers. When you buy through this link, Morning Brew may earn a commission.}

Play

Word Search: This week’s puzzle is about an ennead. Or, if you prefer, a nonet. Or a nonad. See what we mean and play the Word Search here.

Hot dog trivia

Today is National Hot Dog Day. Which two European cities, in neighboring countries, claim to have invented the hot dog? Hint: Think of other names for hot dogs.

Answer

Frankfurt, Germany (frankfurter) and Vienna, Austria (wiener)

Word of the Day

Today’s Word of the Day is: ennead, meaning “a group or set of nine.” Thanks to Caleb from South Carolina for the suggestion. Submit another Word of the Day here.