Happy Monday, !

Megan Stewart won our world-famous news haiku competition™ by two votes with this beauty about the Epstein files last week:

Congratulations, Megan, and here’s your celebratory cartoon, courtesy of the New Yorker:

Here’s how N2K readers voted on the competition:

🟨🟨🟨🟨🟨🟨 An exclusive club, with members in denial. Files tell the truth. ~ Joan Benson (126)

🟩🟩🟩🟩🟩🟩 Dollars aren't fig leaves, As the rich and famous find, Shortcomings exposed. ~ Megan Stewart (128)

🟨🟨🟨🟨🟨⬜️ Big shots now exposed, What goes around comes around, Step off Step down Quit ~ Diane K (114)

🟨🟨🟨⬜️⬜️⬜️ The truth is out there? Scully and Mulder were wrong, Not X but Epstein ~ Stephen R Balzac (76)

🟨🟨🟨⬜️⬜️⬜️ So no “You are fired!” If you’re in the Cabinet, And the Epstein files? ~ Bob Epstein (no relation) (79)

523 Votes via @beehiiv polls

This week’s world-famous news haiku competition™ is, in somewhat timely news, about the Supreme Court ruling that emergency powers don’t cover imposing tariffs. Send me your entry — to our spiffy email address, haiku at cheddar dot com — by noon ET Thursday, for consideration by your Cheddar peers.

Now let’s flip the record, shall we?

Matt Davis — Need2Know Chedditor

News You Need2Know

• Court strikes down tariffs. Now what?

• US GDP growth falls sharply to 1.4% in Q4

• Amazon surpasses Walmart in Global Sales

• Nvidia will invest $30B, not $100B, in OpenAI

• What happens when you ask ChatGPT to structure you …

• Poll of the day: Policy shift?

What’s the stock market up to, eh?

$SPX ( ▲ 0.69% ) $DJI ( ▲ 0.47% ) $NDX ( ▲ 0.9% )  

Companies mentioned in today’s newsletter

$AMZN ( ▲ 2.56% )  $WMT ( ▼ 1.51% )  $NVDA ( ▲ 1.02% )  $SFTBY ( ▼ 3.14% )  $AMZN ( ▲ 2.56% )  

Court strikes down tariffs. Now what?

“I’m ashamed of certain members of the court, absolutely ashamed for not having the courage to do what’s right for our country,” the president said.

The Supreme Court’s 6-3 decision on Friday striking down President Trump’s widespread tariffs as an overreach of executive power has been called a major blow to his economic policy.

The court ruled that the administration exceeded its constitutional authority by stretching the use of the International Emergency Economic Powers Act (IEEPA) to impose tariffs. Because Congress didn't give the administration the explicit power to use tariffs in this way, the court ruled that President Trump had acted beyond his constitutional authority.

A defiant President Trump immediately criticized the ruling and the justices in the majority, stating, "They’re very unpatriotic and disloyal to our Constitution," and accused them of being swayed by "foreign interests." Despite the setback, he vowed to reimpose the fees using other authorities, including an order for a 10% global tariff under a different set of laws.

The ruling creates new economic uncertainty, particularly around the over $200 billion in collected tariff revenue and potential refunds. A large portion of this revenue was destined for the congressional general fund.

The Wall Street Journal ran a scathing editorial on Friday titled ”The embarrassing truth about tariffs,” highlighting economic research from the Federal Reserve Bank of New York and others, which reveals that American households and businesses bear nearly 90% of the tariff costs, contrary to President Trump’s claims that foreign entities would pay. The analysis aligns with broader research, suggesting tariffs raise import prices rather than forcing foreign producers to lower costs or driving dollar appreciation.

The administration has dismissed this research, with Kevin Hassett, Director of the National Economic Council, branding it as flawed while expressing concerns about its political damage. While aspects of Trump’s economic policy, such as deregulation and AI investment, have buoyed growth despite the tariffs, American voters remain skeptical of tariffs’ benefits, the Journal’s editors opined. They called for a policy shift. Let us know what you think in today’s poll!

US GDP growth falls sharply to 1.4% in Q4

The US economy grew at a lackluster annualized rate of 1.4% in the fourth quarter of 2025, a sharp decline from the previous quarter’s 4.4% growth. The slowdown, attributed in part to the unprecedented 43-day federal government shutdown, has raised concerns about economic momentum heading into 2026.

According to the Bureau of Economic Analysis (BEA), the shutdown alone shaved a full point off growth. Gregory Daco, chief economist at EY-Parthenon, told the Financial Times it was “a self-inflicted drag from the longest government shutdown in US history.”

Alongside lower government spending, consumer spending also slowed, slightly offset by a rise in business investment. Inflation, however, posed another challenge. The Federal Reserve’s preferred measure, the personal consumption expenditures price index, rose to 2.9% in December—its highest since March 2024 and a significant deviation from its 2% target. “Progress towards [the] inflation goal might be slower and more uneven than generally expected,” warned Fed policymakers in meeting minutes.

While President Trump blamed Democrats and Fed Chair Jay Powell for the disappointing numbers, claiming, “The Democrat Shutdown cost the U.S.A. at least two points in GDP,” economists remain cautiously optimistic. Michael Pearce of Oxford Economics told the FT, “the core of the economy is resilient,” expecting gains from fading tariff pressures (see story above) and increased capital spending in 2026.

Quote of the Day

Amazon surpasses Walmart in Global Sales

Amazon $AMZN ( ▲ 2.56% ) has eclipsed Walmart $WMT ( ▼ 1.51% ) in quarterly revenue for the first time. During the fourth quarter of 2025, Amazon brought in an impressive $187.8 billion, surpassing Walmart’s $180.5 billion for the same period, according to reports from both companies. Walmart has held the title of top revenue generator each quarter since 2012, when it overtook Exxon Mobil $XOM ( ▼ 2.44% )  

While Walmart still maintains its lead in annual revenue — projected to reach $708.7 billion this fiscal year compared to Amazon’s estimated $700.8 billion — the gap is quickly closing. Amazon’s diverse business model is fueling its growth beyond core retail, with significant contributions from its cloud computing platform, Amazon Web Services (AWS), third-party seller services, and advertising arm. In 2025, third-party seller services represented 24.5% of Amazon’s total sales, while AWS accounted for nearly 17%.

Walmart, striving to keep pace with its rival, has adopted similar strategies by expanding its third-party marketplace, fulfillment services, and advertising business. The retail giant also leverages its Walmart+ loyalty program to compete with Amazon Prime.

The big change comes after Amazon announced last month that it was axing 16,000 jobs amid its push for AI development. Amazon CEO Andy Jassy said in June that he expected the company’s workforce to shrink in the coming years as AI becomes more integrated.

“We will need fewer people doing some of the jobs that are being done today, and more people doing other types of jobs,” Jassy said.

Song of the Day: Dermot Kennedy, ‘Refuge’

Here’s a nice acoustic track with a romantic vocal — the second single from Mr. Kennedy’s upcoming third studio album, “The Weight of the Woods.” They’re heavy, eh? Those woods, I mean?

Free yourself from advertising forever!

Nvidia will invest $30B, not $100B, in OpenAI

Nvidia $NVDA ( ▲ 1.02% ) is on the verge of finalizing a $30 billion investment in AI startup OpenAI, replacing the previously announced $100 billion long-term commitment. According to insiders, this new investment will form part of a larger funding round, valuing OpenAI at $730 billion. Much of this new capital will be reinvested into Nvidia hardware, a move that highlights the close ties between the two companies (see illustration, above).

While the deal is being celebrated by stock market investors, it has raised eyebrows among analysts who are wary of the circular investment structure.

Previously, Nvidia committed to investing in ten $10 billion increments as OpenAI’s demand for computing power grew, with OpenAI purchasing millions of Nvidia processors. However, this agreement, announced with much fanfare last year, never progressed beyond a memorandum of understanding.

Commenting on the reports of cooling relations, OpenAI CEO Sam Altman said, “We love working with Nvidia and they make the best AI chips in the world. We hope to be a gigantic customer for a very long time.” Nvidia's CEO Jensen Huang echoed this sentiment, dismissing any controversy as “nonsense.”

As negotiations finalize, SoftBank $SFTBY ( ▼ 3.14% ) and Amazon $AMZN ( ▲ 2.56% ) also expected to make sizeable investments in OpenAI, the focus should remain on how these funds are utilized. OpenAI plans to spend about $600 billion on computing resources by 2030, further tightening its partnerships with major tech providers. My sophisticated analysis is as follows:

What happens when you ask ChatGPT to structure your investments?

The rise of generative AI is shaking up industries, and wealth management is no exception, it seems. With the emergence of AI tools like ChatGPT, the reliance on traditional financial advisers is being tested like never before.

Take this example: Stuart Kirk, a 53-year-old columnist at the Financial Times with £640,000 in cash challenged ChatGPT to build a model portfolio targeting £1 million by the age of 60. The AI’s response was pretty thorough: It identified the need for a 6.5% annual return, describing this as “ambitious but achievable.” It then recommended a diversified portfolio, allocating 45% to equities, 20% to investment-grade bonds, 15% to alternatives and real assets, 10% to private markets, and 10% to absolute return strategies.

ChatGPT’s breakdown went further. It suggested specific weightings within each asset class (e.g., 30% in developed market stocks, 10% in emerging markets) and highlighted how infrastructure, real estate, and even commodities could provide stability and inflation protection. Even valuation assumptions were intelligently moderated; U.K. and emerging markets got a boost, while U.S. equities faced a “valuation drag.”

Incredibly, all this advice came at £20 per month (the cost of a ChatGPT subscription). Although if you just buy a mutual fund with a target retirement date, your investment firm will do the asset allocation for you and you won’t sound quite so smug about it all at cocktail parties. #NotFinancialAdvice

Should you check your 401(k) today?

👍️ 

Yep.

Poll of the day: Policy shift?

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