Inflation and Growth
July inflation stayed high. The PCE price index rose 0.2% in July and 3.7% year-over-year. Core PCE held at 3.3%. The economy grew at just a 1.5% annualized rate in the second quarter, unchanged from the earlier estimate and down from 2.1% in Q1. This puts the Fed in a hard spot: inflation that will not come down paired with slowing growth. Markets now wait for Fed chair Kevin Warsh's Jackson Hole remarks for any hint on where interest rates go next.
Meta Settles Social Media Lawsuit
Meta (META) will settle a lawsuit brought by several state attorneys general who claimed Facebook and Instagram fueled social media addiction and harmed children and teens. Meta agrees to pay up to $17 billion over 10 years. The deal also forces Meta to set default daily usage limits and overnight blocks for teens, strengthen age checks, expand parental controls, and accept independent oversight. States had sought damages of about $200 billion, so the settlement is less than 10% of that. Meta expects to book about a $10 billion legal expense in the third quarter. Meta shares still ended the session up more than 1%, a sign investors see the cost as manageable even with the new restrictions.
Revolution Medicine's Cancer Drug Approval
Revolution Medicines won FDA approval for a targeted drug for adults with metastatic pancreatic cancer, one of the deadliest cancers. In trials, the drug more than doubled median overall survival to 13.2 months versus 6.7 months on standard chemotherapy. The once-daily pill targets the proteins that drive tumor growth. Approval could open a bigger market as the company tests the drug in earlier-stage pancreatic cancer and other RAS-driven tumor types. This adds to recent oncology progress alongside Moderna and Merck.
Moonshot AI Courts US Cloud Giants
China's Moonshot AI is reportedly negotiating revenue-sharing deals with Microsoft (MSFT), Amazon (AMZN), and Google (GOOGL) for use of its Kimi K2 model. Reuters reports Moonshot wants up to 30% of revenue from K2-related services on Azure, AWS, and Google Cloud. The report is unconfirmed and many details remain to be worked out, but it would be the first such deal between a Chinese tech firm and a big US cloud company.
SoftBank's OpenAI Bond Plan
SoftBank is reportedly in talks with investment banks about a new bond offering tied to its stake in OpenAI. Per Bloomberg, the offering could be between $10 billion and $20 billion, denominated in dollars and euros, and could come in the next few weeks. Proceeds would reportedly repay $40 billion of a bridge loan secured for its OpenAI commitment and other AI investments.
What to Watch Next
Marvell (MRVL) reports with Wall Street expecting about $2.7 billion in revenue, up roughly 35% year-over-year, and EPS near 93 cents. The larger question is whether AI infrastructure demand is spreading beyond custom chips into optical interconnect, which could become a key bottleneck as AI clusters grow. Marvell's expanded Google partnership gives it exposure to the TPU ecosystem and potentially up to $120 billion in custom product purchases through 2028. Investors will listen for guidance on the pace of custom silicon and optical growth, and whether Marvell can keep the AI-driven acceleration it promised through fiscal 2027.
Attention also turns to any Nvidia (NVDA) effect from Jensen Huang's coming comments, starting with Asia. Watch how TSMC (TSM) and memory names trade given his remarks on memory players, and how the broader tech sector holds up tomorrow. Recent action has looked like a classic sell-the-news event; the question is whether that carries into tomorrow after the press conference. Nvidia was down about a quarter of a percent at the time.
