Everything moving the Street, before it moves you.
Good morning. Somewhere in Redmond, a spreadsheet just decided that owning great video games is a worse business than renting them.
Microsoft (MSFT) is "resetting" Xbox by cutting 3,200 jobs, about a fifth of the division, with 1,600 going immediately and the rest over the next year. It is also handing five acclaimed studios their walking papers: Ninja Theory and Undead Labs are being sold, Compulsion and Double Fine are being cut loose to go independent, and Arkane is on the block. New Xbox chief Asha Sharma told staff the business is "not healthy," running at margins three to 10 times lower than comparable platform and publishing outfits.
That is a remarkable verdict on a division that, by Bloomberg's count, spent nearly $80 billion buying content over the past decade. Turns out the fastest way to make a small fortune in gaming is to start with a very large one and buy Activision Blizzard.
Semiconductors
Samsung Posted the Best Quarter in Its History, and the Chip Trade Sold It Anyway
Samsung handed in a straight-A report card. The market sent it to the principal's office regardless.
Samsung Electronics turned in preliminary second-quarter operating profit of 89.4 trillion won, roughly $58 billion, a figure that came in about 1,810% above the same quarter last year and cleared the roughly 87.3 trillion won analysts had penciled in. Revenue jumped 129% to 171 trillion won. It is, by almost any measure, one of the most profitable three months any technology company has ever recorded, powered by the memory chips that Nvidia's AI accelerators inhale by the pallet. The reward for that performance: shares fell about 7% in Seoul.
The selloff wasn't really about Samsung. It was about a market that has decided a perfect score is the new passing grade, and anything short of a miracle counts as a disappointment.
Grading on a Curve
The damage spread fast and far. A report that China's DeepSeek is developing its own inference chip to wean itself off Nvidia and Huawei landed the same morning, and suddenly investors were re-grading the whole AI syllabus at once.
By the numbers:
The Philadelphia Semiconductor Index fell more than 5% at its worst, with Micron, Marvell, Western Digital, SanDisk and Intel all posting steep losses on the DeepSeek headline and Samsung's "not enough" reception.
The broad tape followed the chips lower: the Nasdaq Composite slid 1.16% to 25,818.69 and the S&P 500 eased 0.45% to 7,503.85, while the Dow slipped 0.25% to 52,925.15, retreating from Monday's record.
"It is a matter of expectations and skepticism, rather than a break in fundamentals."
Nothing in the memory market actually changed on Tuesday. Samsung said supply is still tight and DRAM pricing is still climbing, with little visibility into when that flips before the far side of 2027. What changed was the mood: after the best quarter for semiconductors on record, positioning is crowded, the bar is set at "flawless," and buyers have started penalizing anyone who spends too aggressively to chase it.
Extra Credit, No Extra Points: The tell is that a company can print history and still lose the day. That is what a maturing trade looks like: the fundamentals carry the year, but the stock trades on whether the quarter beat an impossible number. Earnings season proper starts in two weeks, and the chipmakers are the class expected to lead S&P profit growth. The lesson from Samsung is that leading isn't the same as clearing the curve.
Markets
SpaceX Joins the Nasdaq-100, and Wall Street Finally Gets to Talk About It
For 15 trading days the analysts had to keep quiet. On Tuesday, both the muzzle and the velvet rope came off at once.
SpaceX (SPCX) was added to the Nasdaq-100 before Tuesday's open, a fast-track entry barely two weeks after last month's record IPO, which dropped it straight into the index sitting beneath the popular Invesco QQQ ETF. On the very same morning the underwriters' quiet period expired, freeing the banks that ran the deal to publish opinions for the first time. So the mechanical buying and the first real scorecards arrived on the same tick.
The verdict from the sell side was, to put it mildly, enthusiastic. But the stock didn't care.
Cleared for Launch
Here is the flight plan that greeted the newly public rocket company:
Passive funds tracking the index will have to scoop up an estimated $4.3 billion of stock as they rebalance, a buyer that cannot say no even though the low float means SpaceX lands at only about a 1% weighting.
At least six banks launched coverage with buy-equivalent ratings; Morgan Stanley's Adam Jonas opened at overweight with a $300 target, while Goldman Sachs initiated at buy with a more grounded $205.
Even so, the shares slipped about 6% on the day to around $150, off Monday's $160.42 close, as the anchor Ed Ludlow noted that most index funds had already bought in ahead of the switch.
Index inclusion manufactures a buyer for one morning; it doesn't manufacture a floor. The forced bid is real and it is also finished the moment the rebalance clears. From Wednesday on, a roughly $2 trillion price tag on a company that has yet to string together profits trades on the same gravity as everyone else.
Escape Velocity Sold Separately: The bull case is genuinely a bet on Elon Musk's whole galaxy — launch dominance, a Starlink pricing ladder that charges aviation customers a fortune, and a data-center "wildcard" bolted onto the side. The bear case is simpler: it is a triple-B credit with negative free cash flow and enormous funding needs, and the day it joined America's premier growth index it went down. Both can be true. The next real catalyst is an estimated August earnings date, when the market finds out whether there are numbers under the narrative.
Big Tech
Amazon Puts Another $25 Billion on the Tab to Keep the AI Buildout Fed
Every few weeks a hyperscaler walks up to the bond market and orders another round. On Tuesday it was Amazon's turn, and it did not order light.
Amazon (AMZN) returned to the corporate debt market seeking at least $25 billion across as many as eight tranches, with maturities stretching from 2029 all the way out to 2066, proceeds earmarked for the usual "general corporate purposes" that increasingly means data centers full of chips. The company signaled it is done borrowing for the year after this one, having already raised roughly $54 billion in 2026. Demand was ferocious: orders peaked near $62 billion before the book settled.
Reading the Tab
That appetite is the whole point. Bloomberg Intelligence figures Amazon's capital spending will blow past its $200 billion guidance this year and could approach $300 billion next year, because the cost of everything — construction, labor, and especially memory — keeps climbing even before you add another server. Andy Jassy has told investors for years that capex growth is outrunning revenue growth; the bond market has decided it doesn't mind waiting.
"From the credit side, these credits are fine. There's tons of capacity."
Last Call Is Nowhere Near: The credit desk and the equity desk are drinking at the same bar and reading the tab completely differently. To bondholders, Amazon is a AA-rated name with leverage well under its target and gushing cash flow from retail and cloud, so lending it money for 40 years is a layup. To equity holders being asked to fund a spending wave that won't pay off "in big size" for two or three years, it is one more IOU on a growing pile. The reconciliation only comes when the AI revenue run-rate finally laps the capex bill. Until then, the round keeps coming.
The Tape
Dot's the Debate: The Fed releases minutes from its June meeting at 2 p.m. ET today, and with nine of 18 policymakers now penciling in at least one 2026 hike and Chair Kevin Warsh conspicuously withholding his own dot, traders will comb the text for the September signal Warsh refused to give in public.
Great Wall of Silicon: The DeepSeek chip report landed the same week Beijing was reportedly weighing curbs on overseas access to China's most advanced AI models from Alibaba, ByteDance and Z.ai — the US–China AI split now hardening on both sides of the wall at once.
Dilution Solution: Rivian (RIVN) tumbled as much as 18% after moving to sell 75 million shares, a roughly $1.5 billion raise led by Goldman Sachs to cover conditions on its Department of Energy loan, timed opportunistically just days after strong delivery numbers had juiced the stock.
What You May Also Like
Biggest book in town: Apple supplier Luxshare raised about $3.1 billion pricing its Hong Kong listing at the top of the range, the city's largest IPO of 2026, with cornerstones Temasek and GIC taking roughly $1.5 billion; trading begins Thursday.
Software swap: ResMed (RMD) agreed to sell its MatrixCare software unit to private-equity firm Frazier Healthcare for $490 million in cash, offloading for less than the $750 million it paid in 2018 to refocus on sleep and breathing health.
Fusion gets funded: German fusion startup Proxima Fusion raised €411 million at a €2.4 billion valuation, the largest European fusion round on record, with Google making its first European fusion bet and utility RWE joining — one more sign the AI power crunch is bankrolling the energy moonshots.
Just For Fun
OpenAI's newly minted "chief futurist," Joshua Achiam, is leaving later this month after nearly nine years — having held the future-predicting title since only February, which is either excellent comic timing or a spoiler about the forecast.
The billionaires are back at summer camp: Sun Valley's ultra-exclusive media-and-tech conference kicks off in Idaho with Bezos, Cook and Zuckerberg expected, and per Bloomberg's on-the-ground coverage, the arts-and-crafts project this year is a wave of media dealmaking, from the closing Paramount–Warner Bros. tie-up to Fox's $22 billion grab for Roku.
After the Bell
Tuesday was the market talking itself out of a great day. Samsung printed the most profitable quarter in its history and got sold. SpaceX joined the index every growth investor already owns and slipped anyway. Amazon asked bondholders for another $25 billion and got offered $62 billion. The through-line is a tape that believes in the AI story completely and trusts the near-term math not at all, penalizing the very companies building the thing it can't stop funding. The referee weighs in at 2 p.m. today, when the Fed minutes tell us how many of its own members want to lean against all of it. Read them closely.
That's the tape. We'll see you at the open. — AllThingsWallSt
