This week’s world-famous-news-haiku-competition™ is all about how gambling companies have had to make record payouts because World Cup players have been scoring so many pesky goals. Send me your entry—to haiku at cheddar dot com—by noon ET Thursday, for consideration by your Cheddar peers. (Don’t worry if you get a bounceback email. The mailbox is working, it’s just been inundated with haikus lately, thank Goodness!)

Matt Davis — Need2Know Chedditor

Table of Contents

• Big Banks Explore Ways To Up Card Transaction Fees

• Poll: Voters Say Iran War Not Worth the Cost

• More Bubble Talk, Even in The Treasury

• Lockheed Paying $5 Million for White House Helipad

• Has AI Hype Peaked? And If So, What Now?

• Poll of the day: Sunshine = Disinfect-AI-nt ?

What’s the stock market up to, eh?

$SPX ( ▼ 0.45% )  $DJI ( ▼ 0.25% )  $NDX ( ▲ 1.59% )  

Companies mentioned in today’s newsletter

$JPM ( ▲ 0.44% )  $BAC ( ▼ 0.07% ) $WFC ( ▼ 0.31% ) $PNC ( ▲ 0.33% )  $COF ( ▼ 1.75% )  $LMT ( ▼ 0.49% )  $MORN ( ▲ 2.75% )  $MSFT ( ▲ 0.54% )  $ADBE ( ▲ 1.59% )  $NOW ( ▲ 2.59% )  $SAP ( ▲ 1.42% )  $V ( ▼ 1.41% )  

Big Banks Explore Ways To Up Card Transaction Fees

Some of the largest financial institutions in the country are quietly exploring a major deal to bypass one of their most-disliked (by the banks…) federal regulations: Limits on debit-card transaction fees. Heavyweights including JPMorgan Chase $JPM ( ▲ 0.44% )  , Bank of America $BAC ( ▼ 0.07% )  , Wells Fargo $WFC ( ▼ 0.31% )  , and PNC Financial Services Group $PNC ( ▲ 0.33% ) have held preliminary, tentative discussions about acquiring STAR and Accel, two payment networks owned by the fintech firm Fiserv, the Wall Street Journal reports.

The motivation behind these talks is simple: Circumventing the 2010 Dodd-Frank Act’s Durbin amendment. It caps the interchange fees that banks with $10 billion or more in assets can collect from merchants on transactions routed through outside networks. However, banks are legally exempt from these caps if they own the underlying network infrastructure. The industry recently watched with envy when Capital One Financial $COF ( ▼ 1.75% )  acquired Discover Financial in a $50.6 billion deal, securing its own direct network to merchants and cutting out the middleman.

While a deal could reclaim billions in “lost revenue,” aka charge you a bunch more in card fees…bank executives are highly cautious. Several participating banks have already decided against moving forward, citing significant anxieties over political, merchant, and regulatory backlash if they attempt to upend the rules.

Proponents of the caps, alongside merchants, argue that lower fees keep prices down for consumers. Conversely, banks have long maintained that fee caps limit their ability to fund free checking accounts and debit-card rewards programs. Perhaps they could do that using the combined $100billion in net income the big four banks all made last year? Greedy piggies…

Poll: Voters Say Iran War Not Worth the Cost

A new Financial Times poll reveals that a majority of American voters are deeply skeptical of Donald Trump's military campaign in Iran. Conducted online by Focaldata among 1,795 registered voters, the survey shows that 58 percent of respondents believe the war has not been worth the cost. This widespread disapproval comes as the White House requests that Congress sign off on $67 billion in new federal spending to cover the expenses of the conflict to date.

The ongoing conflict is taking a significant toll on the president’s political standing just four months before the crucial November midterm elections. Only 36 percent of voters approve of Trump’s job performance overall, a figure that drops to 21 percent among political independents. This decline is heavily driven by domestic economic pain, as the war has pushed petrol and other consumer prices sharply higher. Furthermore, 44 percent of respondents believe the war has left the U.S. in a weaker position with Iran, compared to just 31 percent who feel it placed Washington on a stronger footing.

Voters are equally disillusioned with recent diplomatic efforts. While Washington and Tehran agreed to pause hostilities after a series of tit-for-tat strikes, two-thirds of voters believe the temporary memorandum of understanding will either make no difference or actually increase regional instability. Only one in five believe the deal will lead to peace.

The friction also extends to traditional alliances. Although Trump has attacked NATO as a "paper tiger" because European allies refused to join the campaign, 53 percent of voters believe the U.S. should remain in the alliance.

Still, he got that red card overturned in the World Cup, though, eh?

More Bubble Talk, Even in The Treasury

While the public face of the Trump administration remains bullish on AI, a draft report circulating inside the Treasury Department paints a far more cautious picture. Obtained by website NOTUS, the internal document reportedly warns of systemic risks in the AI market, drawing uneasy parallels to the dotcom bust of the early 2000s.

According to the report, career Treasury analysts fear that AI firms are so deeply embedded in the U.S. economy that missed productivity goals, financial shifts, or supply chain bottlenecks could trigger widespread economic shockwaves. If the AI sector falters, the draft warns that stock markets, private credit, chip manufacturers, and utilities would all feel the impact. The caution contrasts sharply with the public rhetoric of Treasury Secretary Scott Bessent, who praised tech firms for investing $750 billion in AI buildouts. Bessent enthusiastically asked, "Could we do at least that? Can we do maybe more?" while emphasizing that "the biggest risk to AI is China getting ahead of us."

The Treasury has tried to distance itself from the draft. A spokesperson dismissed the findings as unvetted, stating, "The official position of the Secretary and the U.S. Treasury is that Artificial intelligence will be a key driver of America’s new Golden Age." The spokesperson insisted AI has the potential to "deliver unprecedented productivity gains, expand economic opportunity, and empower American workers and businesses."

However, warnings of an artificial bubble are gaining traction on Capitol Hill. Senator Elizabeth Warren, pushing for stricter financial disclosures, cautioned that "AI and Big Tech companies are increasingly reliant on shadowy forms of debt and balance sheet magic to fund their multi-trillion dollar AI buildouts." Warren emphasized that her bill aims to "protect our economy from another preventable financial crisis."

Meanwhile Wall Street’s expectations for corporate profits are surging at their fastest rate since the post-pandemic rebound, fueling intense fears of an “earnings bubble,” the Financial Times reports. Driven by a resilient economy and the AI boom, analysts forecast a massive 25% increase in S&P 500 earnings.

However, investment experts caution that these soaring estimates are unsustainable. GMO's Ben Inker warned reporters that forecasts are rising at an "exceedingly high rate", while Michel Lerner of UBS HOLT said the likelihood of maintaining such profits is "incredibly low." These elevated expectations leave a "very narrow margin of safety" if earnings fall short, he said.

Quote of the day

Song of the Day: Poolside and Stevie Appleton, ‘Bedroom Eyes’

"Bedroom Eyes" is a dreamy, sun-soaked single by Los Angeles daytime-disco pioneer Poolside (Jeffrey Paradise) featuring soulful vocals from British singer-songwriter Stevie Appleton. It’s pristine and laid-back!

Lockheed Paying $5 Million for White House Helipad

Ever buy a lawnmower so powerful it accidentally vaporized your grass? That’s basically the White House's current situation with its new $5 billion Marine One helicopter fleet. The solution? A brand-new, $5 million granite helipad on the South Lawn, generously funded by the very defense contractor that built the lawn-scorching helicopters: Lockheed Martin’s Sikorsky unit. $LMT ( ▼ 0.49% )  

President Trump explained this transaction with characteristic transparency: “Sikorsky is paying for it... Because they didn’t tell us how powerful these helicopters were and they felt a little bit guilty.” Yes, guilt. That’s the traditional driving force motivating multi-billion-dollar defense contractors.

Naturally, our paragons of corporate virtue at Lockheed assure us there is absolutely nothing to see here. A company spokeswoman explained the $5 million write-off was simply part of “a long history of supporting projects.” Furthermore, she declared, “Our engagement with the federal government is guided by rigorous ethics and compliance standards.”

Incidentally did you know that FIFA has an ethics committee? No. Me, either.

Has AI Hype Peaked? And If So, What Now?

The extreme market concentration in AI that dominated the first half of 2026 is showing signs of a shift. Philip Straehl, Chief Investment Officer for the Americas at Morningstar $MORN ( ▲ 2.75% ) , told us that the market has been highly abnormal, with just "10 stocks that contributed almost 60% of returns in global equity markets this year.” With the momentum factor reaching "its highest level in 30 years," Straehl cautions that "other themes ultimately will have to come through for the market to stay balanced over the next six to 12 months.”

A transition is underway from semiconductor hardware to actual software application. While memory chip prices are currently sky-high due to bottlenecks, Straehl warns that "markets underappreciate the possibility for ultimately supply to impact future profitability of these firms." As more supply comes online, "prices will have to come down". With hyperscaler capital spending estimated to reach "close to a trillion in 2027," the focus is shifting. Straehl emphasizes that the next phase "is going to be less about infrastructure, more about productivity gains."

So, where should investors look? Straehl points to "software and software adjacent firms" showing "resilient corporate profitability". Entrenched giants like Microsoft $MSFT ( ▲ 0.54% ) Adobe $ADBE ( ▲ 1.59% ) , ServiceNow $NOW ( ▲ 2.59% ) , and SAP $SAP ( ▲ 1.42% ) are key beneficiaries because they can seamlessly "add an AI layer" to enterprise workflows. Financial services and analytics firms also stand to benefit as they use AI to "lower costs". Furthermore, payment companies like Visa $V ( ▼ 1.41% ) , which were sold off over disintermediation fears, present high-quality opportunities.

With headline valuations looking "stretched" and "fairly extreme," Straehl stresses diversification. Notably, "roughly half of the stocks in the global equity market have [posted] negative return so far in 2026". For savvy investors, the real opportunity lies in looking beyond the recent winners to find high-quality assets that have been left behind.

Or you could just stick it in an index fund. I opened one of the new Trump Accounts for my kid yesterday and stuck $25 in. Good lad. He’s got a “Trust Fund” now! Whoo-hoo!

Free yourself from advertising forever!

Should you check your 401(k) today?

👎️ 

Still a no, gosh darn it!

Poll of the day: Sunshine = Disinfect-AI-nt ?

Poll of the day: You’re gonna thrash that Honda

We asked: “Would you consider an EV as your next car purchase?”

You answered:

🟨🟨🟨🟨⬜️⬜️ Yes, I think the batteries are lasting long enough, and gas prices are erratic enough that I'd consider one. (155)
🟨🟨🟨⬜️⬜️⬜️ In another five years, once the technology has got a little cheaper. (140)
🟩🟩🟩🟩🟩🟩 I'm still not convinced by EVs. I'd rather stick with my Honda Civic, thank you, and drive it into the ground! (222)
517 Votes via @beehiiv polls

Need2Know is covered by Cheddar’s Terms of Service

P.S. So, you remember the cheese puns that used to open this newsletter? Suffice to say, they were divisive. Now, thanks to a thing called “dynamic content options,” I can offer you the option to see cheese puns again, if you’re one of the thousands who got in touch bemoaning their departure six months ago. All you need to do is answer “true” on this survey, and submit it. If you never want to see cheese puns in this newsletter again, don’t click that link, don’t fill out the survey, don’t submit it. Just keep reading and pretend this conversation never happened. Mmmkay? Thank you.