The theme of next week’s world-famous-news-haiku-competition™ is how the “Nostradamus of AI” didn’t predict his own failure. Send me your entry — to haiku at cheddar dot com — by noon ET Thursday, for consideration by your Cheddar peers.

Now: News…

Matt Davis — Need2Know Chedditor

Table of Contents

• Stocks Flirt with New Record Highs

• Whatever Happened to Whirlpool, Eh?

• How AI Is Changing the Economy Forever

• Struggling Colleges Raid Piggy Banks to Pay Bills

• Even Hamburgers Are a Luxury Now, It Seems

• Poll of the Day: Your Happiest of Meals?

• Poll of the Day: Not Fans of The FIFA Boss

What’s the Stock Market Up To, Eh?

$SPX ( ▲ 1.79% )  $DJI ( ▲ 1.71% )  $NDX ( ▲ 1.59% )  

Companies Mentioned in Today’s Newsletter

$PLTR ( ▲ 29.46% )  $CAT ( ▲ 5.6% )  $AMZN ( ▼ 2.32% )  $META ( ▼ 0.39% )  $NVDA ( ▲ 2.57% ) $MU ( ▲ 7.62% )  $BRCM ( 0.0% )  $CMG ( ▼ 9.72% )  $SBUX ( ▲ 1.55% )  $WHR ( ▲ 13.8% )  $BCS ( ▲ 0.68% )  $MCD ( ▲ 1.17% )  

Stocks Flirt with New Record Highs

Forget the noise of, let’s say…geopolitical headlines, Wall Street is focusing on the bright side. The S&P 500, Dow, and Nasdaq were marching toward record highs yesterday, powered by a wave of genuinely positive economic forces.

Why is everyone so bullish all of a sudden? First, corporate earnings are booming. An incredible 86% of S&P 500 companies have beaten profit forecasts, with overall spring earnings per share on track to grow nearly 50% year-over-year — the strongest growth since 2021. As Jeff Buchbinder of LPL Financial wrote to investors on Monday, we should "expect earnings to be the primary driver of stock gains."

Second, the broader economy is getting a welcome breather. Brent crude oil prices fell 4.2% to $80.29 a barrel yesterday, helping to drag the 10-year Treasury yield down to 4.63%. This relaxation of bond yield pressures directly supports the wider stock market. At the same time, the stock rally has dramatically boosted household wealth, with U.S. net worth rising by $13 trillion over a year to hit a record $174 trillion in the first quarter. Best of all, the equal-weighted S&P 500 is also at a record high. It means the rally is healthy, diverse, and no longer just a narrow tech story.

Leading this optimistic parade is software firm Palantir $PLTR ( ▲ 29.46% ) , which surged after reporting what CEO Alex Karp called an "otherworldly" quarter. Heavy-equipment leader Caterpillar $CAT ( ▲ 5.6% ) jumped 10.5% as quarterly sales topped $20 billion for the first time, with CEO Joe Creed pointing to "strong order rates." Tech giant Amazon $AMZN ( ▼ 2.32% ) crossed the $3 trillion market value line earlier this week, while Meta $META ( ▼ 0.39% ) also snapped its worst-ever losing streak on Monday, and chipmakers like Nvidia $NVDA ( ▲ 2.57% ) , Micron Technology $MU ( ▲ 7.62% ) , and Broadcom $AVGO ( ▲ 6.61% ) rallied in the tech sector. Even consumer favorites like Chipotle $CMG ( ▼ 9.72% ) and Starbucks $SBUX ( ▲ 1.55% ) are reporting fairly strong growth. Today, for once, would be a great day to check your 401(k).

Quote of the Day

Whatever Happened to Whirlpool, Eh?

Whirlpool $WHR ( ▲ 13.8% ) was until reasonably recently the undisputed king of keeping your milk cold and your socks clean. But in a dubious pivot, the appliance giant abandoned its globe-spanning ambitions in Europe and China to hunker down exclusively in the U.S. market. Unfortunately that meant they tied their entire financial destiny to a U.S. housing market that has been slumping for three years straight.

Now, instead of buying shiny new appliances, squeezed consumers are getting creative. Take Florida real-estate investor Karlin Ridgeway. When prepping a house, she bypassed a $600 replacement and spent $30 on paint to spruce up a vintage Whirlpool fridge. As Ridgeway told the Wall Street Journal, "If we can save money on our end and still have it look good and be appealing to a buyer, then that’s what we’ve got to go with.”

But CEO Marc Bitzer has a plan. He is betting big on a camera-equipped oven that tells you when your cookies are done and refrigerators that make chewable nugget ice. He even spun a recent 7% drop in sales and a quarterly loss as "a very early but very encouraging sign" of recovery.

CEOs, eh?

Investors, however, aren’t quite sold on cookie-cameras. Christopher Poch, whose firm owns 11,000 shares, grumbled, "It doesn’t look like they’re really doing anything proactive other than hoping things get better.”

Sounds a lot like my career ambitions. Meanwhile, laid-off Whirlpool workers in Iowa waiting for promised factory upgrades are getting a corporate cold shoulder. Kerry Waddell, their union representative, reported that the company's communication strategy is just a robotic, "‘We have no updates at this time’."

The firm has $6 billion in debt, junk bond status, and a suspended 70-year dividend. At least its cookies will be perfectly baked when the ship goes down, eh?

Of course, having said all that, the firm’s shares were up more than 11% yesterday after it reported larger-than-expected losses and decreasing revenue (what is the stock market smoking, you might ask?) but with signs of pricing and cost strategies paving the way for something called “margin stabilization.” I’m not sure I understand it either.

How AI Is Changing the Economy Forever

The rise of AI has moved beyond tech industry hype. Commerce Department figures show it is now a primary engine reshaping the U.S. economy, transforming capital investment, construction priorities, and household wealth.

The scale of this shift is historic, reports the Wall Street Journal. Business investment in AI-related categories, including software, communication equipment, and data centers, has surged to an estimated $1.5 trillion annual run rate, up from $1 trillion just two years ago. This concentration of capital is starkly visible in construction. In June, annual outlays on data centers reached $68.3 billion, a year-over-year increase of $21.5 billion. By contrast, investment in all other private construction, from housing to hospitals, fell by $101.6 billion over the same period. As Barclays $BCS ( ▲ 0.68% ) economist Jonathan Millar observed, “It is very much an AI-driven economy right now. It’s hard to imagine that we would be anywhere near as resilient without that impetus.”

This capital boom has broader macroeconomic effects. Michael Pearce of Oxford Economics estimates that AI investment alone has been behind nearly a quarter of recent GDP growth, and up to one-third of overall growth when factoring in the wider wealth effects of the stock market. Pearce noted, “Without this investment boom, I think it’s pretty clear the economy would be running cooler.”

However, this heavy reliance on a single sector introduces some vulnerabilities. JPMorgan Chase economist Michael Feroli warns, “You can’t just take out AI and leave everything else unchanged... The activity and the financial exuberance associated with AI might be squeezing out activity” in other sectors. With hyperscalers projected to invest nearly $4 trillion by 2029, the economy is highly leveraged on AI's continued success. As Millar concluded, “A lot of the economy is kind of banking on continued strength from the build-out.”

Still, there’s no arguing with the data as it stands today.

Song of the Day: Sekou, ’Dangerous Lover’

Here’s an alluring, synth-driven R&B and pop masterpiece that showcases Sekou’s signature deep, soulful vocals. It’s a perfect summer track, too.

Struggling Colleges Raid Piggy Banks to Pay Bills

In modern higher education, tuition is outpacing inflation, enrollment is plummeting down a "demographic cliff," and colleges have found a highly creative new way to pay their electric bills: Raiding their own donors.

Donations typically come with "restrictions" — pesky little clauses specifying that the money actually be used for what it was given for. But as small, private colleges edge toward the brink, boards are adopting a philosophy of magical thinking and treating restricted endowments like a corporate slush fund. Nearly 200 private colleges borrowed from restricted endowments in 2025, up from 131 in 2021. As Matthew Hendricks, founder of Perspective Data Science, told the Wall Street Journal, “A lot of schools are doing whatever they can to keep the lights on.”

Take Ohio's closed Notre Dame College. When former professor Natalie Strouse asked for her husband's $30,000 memorial scholarship fund back, she was told the money was gone. “She told me they used it to pay the bills,” Strouse said. “I consider it theft.” 

Meow. Former college president J. Michael Pressimone apparently defended such practices as necessary and commonplace, prompting shocked board member Michael Canty to throw a fit. Mark Chamberlin, the school's controller, wasn't shocked, recalling, “It was the single most poorly run operation I have ever seen.”

Some colleges ask for permission first. Jennifer Schuller, president of Lake Erie College, successfully begged eight donors to free up $594,000, explaining that “the school needed the money now and could not wait.” Others prefer the "forgiveness over permission" route, like Quincy University, which borrowed $6 million and was advised to seek "retroactive approval" from the state’s attorney general.

As Joanne Florino of the Philanthropy Roundtable dryly observed, it's like a guy going broke who takes his last $1,000 to the racetrack “because he believes he’s going to win and then he can make everything better.”

I mean, we’ve all done it.

Even Hamburgers Are a Luxury Now, It Seems

It turns out that even the mighty Big Mac isn’t immune to the harsh laws of basic economics. McDonald's $MCD ( ▲ 1.17% ) announced that U.S. same-store sales grew by a measly 0.8% last quarter, a brutal slowdown from last year driven by falling customer traffic.

I will say I actually love McDonald’s and get a sausage and egg McMuffin breakfast with a hash brown and a coffee on average once a week. If it’s been a particularly tough week? I sometimes do it twice. Then again I used to live in Manhattan and regularly spent $300 a week on bagels and coffee from the bodega, so actually, a value breakfast from the Golden Arches represents a step down…

Who is to blame for this tragic dip in French fry consumption? Inflation, of course, and a spike in gas prices sparked by the (sorry to mention it again…but…you know) war in Iran. It seems lower-income customers, the backbone of the McDonald's empire, are finally maxing out their budgets and consumers are choosing to fill their gas tanks instead of buying extra boxes of McNuggets.

Adding insult to injury, McDonald's can't even blame a general fast-food strike. Rivals like Chipotle $CMG ( ▼ 9.72% ) , Starbucks $SBUX ( ▲ 1.55% ) , KFC, and Taco Bell are casually reporting fairly strong quarterly growth. But corporate headquarters isn't throwing in the grease-stained towel just yet. CEO Chris Kempczinski is putting on a brave face, declaring, “We see an opportunity to raise the bar in the U.S. and accelerate performance in our largest market.” To bring that promised “focus and urgency,” they’ve immediately replaced U.S. head Joe Erlinger with Skye Anderson, a 26-year company veteran who famously started in an entry-level finance position in Australia. G’day!

Anderson's first grand task? Overseeing a massive, expensive remodel plan to give restaurants a "new look" with shiny new technology and equipment. There's just one tiny catch: The franchisees, who own over 90% of the restaurants, are the ones who actually have to shell out the cash for these upgrades. Good luck convincing them to remodel their kitchens while foot traffic is heading south…

Free Yourself From Advertising Forever!

Should You Check Your 401(k) Today?

👍️ 

Yes, yes, yes, yes, yes, yes, yes!

Poll of the Day: Your Happiest of Meals?

Poll of the Day: Not Fans of The FIFA Boss

We asked: “What's an appropriate outcome for Gianni Infantino when he runs again for president of FIFA in 2027?”

You answered:

⬜️⬜️⬜️⬜️⬜️⬜️ I sure hope he wins. It seems like he has the future of the sport at heart. (11)
🟨🟨🟨🟨🟨⬜️ I sure hope he gets annihilated because he is obviously one corrupt man and he makes my blood boil. (186)
🟩🟩🟩🟩🟩🟩 I hope he resigns before then and doesn't even run for shame. SHAME. (196)
393 Votes via @beehiiv polls

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