Good morning. Samsung Electronics posted a profit increase that needs a calculator with extra zeros: operating profit up 1,814% from a year earlier to a record 89.5 trillion won, beating estimates on insatiable AI chip demand, CNBC reported. Shares opened higher on the news. Then, like SK Hynix a day earlier, they gave it all back, reversing course to close 0.72% lower as investors who'd spent the week interrogating every hyperscaler's AI math turned the same skeptical eye on the chipmakers supplying them.

Somewhere in Seoul, someone is refreshing a stock ticker and wondering what a company has to do to actually get credit for a good quarter around here.

Kevin Warsh tried to let the market call the game. The market decided he was the one getting sent off.

The Federal Reserve left its benchmark rate unchanged at 3.5% to 3.75% Wednesday, with the Federal Open Market Committee voting 9-3. All three dissents, Beth Hammack, Neel Kashkari and Lorie Logan, wanted a quarter-point hike instead, the Fed said. That alone was newsy. What happened in the 45 minutes after was stranger.

In his press conference, Fed Chair Warsh argued the committee didn't need to spell out its next move because, as he put it, "market participants are learning to play the ball, not the referee," according to a recording aired on Bloomberg Intelligence. The bond market's response was to call his bluff.

Warsh, still new to the chair, is in the middle of establishing how markets should read him. Wednesday's answer: not well. He also said, "where necessary and appropriate, we will not hesitate to act," but declined repeatedly to say what would actually trigger a hike, CNBC reported.

By the numbers: the Dow Jones Industrial Average fell 1,153.18 points, or 2.19%, to 51,594.14 Wednesday, its steepest one-day drop since April 2025, while the S&P 500 slid 1.52% and the Nasdaq Composite fell 1.74%, Forbes reported. The 30-year Treasury yield jumped 10.5 basis points to 5.201%, touching an intraday 5.244%, the highest level since July 2007, before climbing further to 5.234% in Thursday trading, per CNBC. WTI crude rose 6.6% to settle at $84.46 a barrel after President Trump vowed to hit Iran "hard" following an intercepted missile attack on U.S. forces, CNBC reported.

Added Time: Traders are now pricing real odds of a hike at the Fed's next meeting in September, a reversal from where things stood a day earlier. Warsh wanted the market to do some of the talking for him. It talked, alright, just not in the direction he needed. The committee now has one more inflation report before it has to decide whether patience was wisdom or a delay tactic.

Same homework, two very different grades.

Microsoft and Meta both reported quarterly results after Wednesday's close, and Wall Street handed out its verdicts almost instantly: Microsoft shares jumped as much as 9% in extended trading, while Meta shares tumbled almost 9% the other way, CNBC reported. Both companies are spending enormous sums on AI infrastructure. Only one convinced investors it's paying off yet.

It's the same question that hit Alphabet last week and SK Hynix and Samsung this week: does the spending show up as growth, or just as a bigger bill.

Microsoft's fiscal fourth-quarter revenue rose 18% to $90.01 billion, topping the $87.62 billion analysts expected, with Azure cloud revenue up 43% at constant currency against a 40.2% estimate; Azure's full fiscal-year revenue topped $100 billion for the first time, per CNBC. Meta, by contrast, posted adjusted earnings of $6.18 a share, missing estimates by $1.04, and guided third-quarter revenue to $61 billion to $64 billion, the low end lighter than the $63.15 billion Wall Street wanted, CNBC reported. Meta's operating margin fell to 31% from 43% a year earlier as capex-driven depreciation costs climbed, Bloomberg Intelligence's Mandeep Singh said on a Bloomberg Intelligence broadcast, while free cash flow dropped 91% year over year to $784 million, Reuters reported.

Grading on a Curve: The line separating this quarter's AI winners from its AI question marks isn't who's spending more, it's who can point to something tangible on the other side of the spending: Copilot seat growth, Azure backlog, a cloud business that's already scaled. Meta's making the case that it's building toward the same thing, just later. Investors, for now, are grading on a curve, and Meta didn't clear the bar.

Turns out "personally guarantee" is not just a nice thing to say at a dinner party.

Paramount Skydance's roughly $110 billion pursuit of Warner Bros. Discovery has been in legal limbo for weeks, and last week the two sides agreed to postpone closing until next June, or five days after a lawsuit from 12 state attorneys general and the Writers Guild of America is resolved, Bloomberg reported. Buried in the filings is a detail that got fresh attention this week: if the whole thing collapses, it isn't really Paramount's balance sheet on the line. It's Larry Ellison's.

If the deal doesn't close, Ellison and a family trust would reimburse Paramount for the $7 billion termination fee it owes Warner Bros. shareholders, plus the $2.8 billion Paramount already paid Netflix in February to abandon its own pursuit of the studio, a combined $9.8 billion, Bloomberg reported. Ellison would fund it by buying new Paramount Class B shares at $16.02 apiece, more than double where the stock trades today, around $8. There's a running cost, too: starting October 1, Paramount owes Warner Bros. shareholders "ticking" fees of roughly $650 million a quarter for every quarter the deal stays open, fees that get absorbed into the $46.7 billion in new equity Ellison and partners, including RedBird Capital Partners and three Middle Eastern sovereign wealth funds, have committed if the acquisition ultimately closes.

A $9.8 billion insurance policy on a deal you can't currently close is a strange place to be, even for one of the world's richest men, but it's also the clearest sign yet of how badly the Ellisons want this to work. — AllThingsWallSt

Paying to Play: The states' antitrust case and the Writers Guild suit aren't resolving any time soon, and every quarter of limbo raises the potential bill for whoever's left holding it if the deal breaks. For now, that's Larry Ellison, and $9.8 billion is an expensive way to find out whether Hollywood's biggest merger since Disney-Fox actually gets done.

Chips, Diverging: Qualcomm shares fell more than 7% on a weaker-than-expected forecast tied to fading revenue from Apple and component shortages, while ARM Holdings' revenue of $1.29 billion beat estimates, CNBC reported, with data-center royalty revenue "more than doubling from a year earlier," ARM's CEO said on a Bloomberg Tech broadcast — the same smartphone-versus-data-center split running underneath Microsoft and Meta's earnings.

Leverage, Unwound: South Korean retail investors piled into leveraged single-stock ETFs tracking Samsung and SK Hynix during the AI chip rally; the largest, tracking SK Hynix, has fallen more than 80% since its June 23 peak, prompting Finance Minister Koo Yun-cheol to apologize for regulators' handling of the products, CNBC reported.

Pace Yourself: More than 1,290 employees across OpenAI, Anthropic, Google DeepMind and Meta, including Anthropic CEO Dario Amodei and chief scientists from OpenAI and Meta's Superintelligence Labs, signed a letter urging the U.S. government to help build tools to "deliberately pace" AI development, Bloomberg reported.

Shell's Iran Dividend: Shell posted adjusted earnings of $9.84 billion for the second quarter, its best quarterly profit since 2022, beating the $8.79 billion analysts expected as the Iran conflict pushed fossil-fuel prices higher, CNBC reported.

Backlogged and Loving It: GE HealthCare shares jumped after second-quarter revenue rose 5.7% to $5.30 billion and organic orders grew 11.1%, pushing its backlog to a record $23.9 billion, the Motley Fool and StockStory reported.

Firewall, Meet Beat: Fortinet shares soared more than 12% after the cybersecurity firm topped both earnings and revenue estimates on strong billings and issued a third-quarter forecast ahead of Wall Street's expectations, CNBC reported.

DoorDash (DASH) is launching its own drone delivery service, DoorDash Air, after the FAA granted it Part 135 air carrier certification, becoming the eighth U.S. operator to hold the license, with commercial flights set to begin this fall — meaning your burrito may soon arrive with its own air traffic clearance.

Unilever's Magnum, owner of Ben & Jerry's and Cornetto, saw shares sink despite a European heat wave driving strong ice-cream demand and 9.2% growth at Ben & Jerry's alone, after companywide organic sales growth slowed to 4.7% from 5.8% a year earlier, CNBC reported — proof that even a heat wave has its limits as a business strategy.

Between a Fed chair nobody could quite parse, two Big Tech earnings calls pulling in opposite directions, and a South Korean regulator apologizing for leveraged ETFs, Thursday had a little of everything except clarity. That's the tape. We'll see you at the open. — AllThingsWallSt