Oil prices jump, while the Dow drops more than 1,100 as sinking AI stocks drag Wall Street lower
NEW YORK (AP) — Oil prices got back to jumping, while sinking technology stocks dragged Wall Street lower amid uncertainty about what the Federal Reserve will do to get high inflation under control. The S&P 500 fell 1.5% Wednesday after briefly erasing all of an earlier drop of 1.2%. The Dow Jones Industrial Average tumbled 2.2%, and the Nasdaq composite sank 1.7%. The price of Brent oil leaped back above $88 per barrel to add further pressure on inflation. The Fed pledged again to get inflation back down to 2%, but it offered few clues on how it would do so after holding interest rates steady.
Samsung reports record profit as South Korean chip giants benefit from global AI boom
SEOUL, South Korea (AP) — South Korean technology giant Samsung Electronics has reported a record operating profit of $62 billion for the April-June quarter. The earnings were reported Thursday, a day after crosstown rival SK Hynix also reported record earnings. The world’s two largest memory chipmakers are riding a global artificial intelligence boom. Despite their soaring profits, the companies’ shares have fallen sharply this week in South Korea’s volatile stock market, where retail investors often drive sharp swings in share prices. Concerns have grown over their plans to put massive funds into increasing their manufacturing capacity and the prospects of intensifying competition from China.
Microsoft beats Wall Street expectations with $90B in revenue
Microsoft has posted strong quarterly earnings, surpassing expectations with significant growth in its cloud computing platform and a boost in paid AI users. The company earned $90 billion, or $4.81 per share, in the April-June quarter, up 18% from a year earlier. Analysts had expected $4.24 per share on $87.62 billion in revenue. Microsoft Cloud revenue rose 27% year-over-year, driven by demand for Azure and AI services. Azure and other cloud services revenue increased 43%. CEO Satya Nadella highlighted Azure's $100 billion revenue milestone and 30 million paid seats for Microsoft 365 Copilot. Microsoft's shares rose about 3% in after-hours trading.
Starbucks reports strong quarterly sales across customer income levels and times of day
Starbucks has reported better-than-expected quarterly revenue and profit. The Seattle company says its business grew across customer income levels and in the morning as well as the afternoon. Chairman and CEO Brian Niccol said Wednesday's results were further proof the company’s turnaround efforts are working. He says S’mores Cold Brew, which features marshmallow syrup, marshmallow cream cold foam and a graham cracker topping, was particularly popular with Generation Z customers and is one of the company’s strongest limited-time summer offerings in years. Niccol also credited a redesign of stores to give them a cozier, coffeehouse feel with improving sales. Starbucks shares were up more than 5% in after-hours trading.
Wisconsin's appeals court overturns ruling that had restored collective bargaining power
MADISON, Wis. (AP) — Wisconsin public worker and teachers unions have suffered a legal setback as they seek to regain the collective bargaining rights they lost 15 years ago. A state appeals court on Wednesday overturned a ruling that restored the rights unions lost under a 2011 state law. The enactment of the Republican-backed law sparked weeks of protests and made Wisconsin the center of the national battle over union rights. That law, known as Act 10, effectively ended most public employees′ ability to bargain for wage increases and other issues, and forced them to pay more for health insurance and retirement benefits. Unions are expected to appeal to the Wisconsin Supreme Court.
Meta shares drop as Q2 profit declines due to legal expenses and severance costs
Meta Platforms says its second-quarter profit declined even as revenue beat Wall Street’s expectations, as legal expenses and severance costs for recent layoffs weighed on its results. The Facebook and Instagram parent company earned $15.85 billion, or $6.18 per share, in the April to June period. That’s down 14% from $18.34 billion, or $7.14 per share, in the same period a year earlier. Revenue grew 28% to $60.8 billion. Total expenses were $42.03 billion, an increase of 55% year-over-year. Meta said Wednesday this includes $2.40 billion of charges related to legal proceedings and $1.18 billion of severance expenses in connection with the layoffs announced in May.
Russia accuses Telegram CEO Pavel Durov of aiding terrorism in its latest digital crackdown
Russian authorities have charged Pavel Durov, the founder and CEO of the popular messaging app Telegram, with aiding terrorism and placed him on an international wanted list. The Federal Security Service, or FSB, accused Telegram of failing to remove content allegedly used by Ukrainian intelligence and extremist groups. This comes as Russia intensifies efforts to control the internet, restricting Telegram and other platforms. Durov, a billionaire who lives in Dubai, could face life in prison if convicted. Since Moscow's full-scale invasion of Ukraine in 2022, Russian authorities have been cracking down on internet freedom, banning platforms like Facebook and Instagram.
US bans foreign-made humanoid robots, targeting China over national security
HONG KONG (AP) — The U.S. Federal Communications Commission is banning imports of new foreign-made humanoid robots and power inverters, citing national security risks. The move targets China, which dominates the global market for humanoid robots. The FCC's ban also includes quadruped robots, often called robot dogs. The ban could test relations with Beijing ahead of a planned U.S. visit by Chinese leader Xi Jinping in September. China has criticized the move, accusing the U.S. of protectionism. The ban follows other U.S. restrictions on Chinese products.
Elon Musk launches invite-only X Money with a Visa debit card, 6% yield and real-time transfers
NEW YORK (AP) — Elon Musk's social media company X, previously Twitter, has launched X Money, a bank account-like service for users to send money to each other. X Money isn't a new bank; it uses Cross River Bank's technology and services. Currently, it's invite-only and available to X's paying members. Users receive an X-branded Visa debit card for ATM use and can send money in real-time. To attract customers, X Money offers a 6% yield on deposits and 3% cashback on eligible purchases. Musk aims to turn X into an "everything app," entering a market dominated by services like Venmo and Cash App.
Telegram's billionaire founder Pavel Durov has faced legal woes before — in Russia and France
The billionaire founder and CEO of the Telegram messaging app has repeatedly run into trouble with both the Kremlin and Western officials as he cast himself as a champion of free speech. Russia’s Federal Security Service accuses Pavel Durov of aiding what it called terrorist activities. It also said it was adding Durov’s name to international wanted lists. The Russian-born 41-year-old Durov responded by posting a photo of himself raising a middle finger on Telegram’s official account on X. The case marks an escalation of the Kremlin’s efforts to tighten control over the internet and digital communications amid growing public fatigue with the 4-year-old war in Ukraine and its economic fallout.
