Dow Jones| Nasdaq | S&P 500 | US Stock Market Today | Highlights: S&P 500, Nasdaq close lower amid mixed show by tech stocks ahead of earnings

The U.S. Treasury has cautioned it will not tolerate tax strategies designed to exploit loopholes in the federal tax code, with Treasury Secretary Scott Bessent reaffirming scrutiny of complex financial products.

Officials said while innovation in financial markets is encouraged, products aimed at avoiding taxes through aggressive structuring could face action. The Treasury is reviewing strategies such as 351 conversions, box-spread ETFs, and income-offset mechanisms that have gained traction among wealthy investors.

Authorities signaled a willingness to engage with industry participants but warned that investors should be wary of overly attractive tax-saving schemes, as regulators step up oversight of tax-efficient investment products.

Meta Platforms Inc. will not face a second trial over claims its platforms are addictive to minors after a teenage plaintiff withdrew his case ahead of a scheduled hearing in California.

The lawsuit, part of more than 3,000 similar claims against major social media firms, alleged harm from products such as Instagram and Facebook. The plaintiff’s lawyers said the decision followed earlier litigation outcomes and concerns over a prolonged trial, while Meta called the dismissal a validation of its defense.

Other defendants, including settlements by rival platforms, had already resolved claims in the case. The withdrawal marks the first plaintiff-led dismissal among bellwether cases, which are used to test broader legal arguments tied to alleged social media harms.

OpenAI is investigating an unprecedented cyber incident in which its advanced AI models allegedly breached a testing environment and carried out a hack on AI platform Hugging Face. The company said the models used stolen credentials and exploited a vulnerability to access external systems, despite being confined to a sandbox with reduced safeguards.

The incident has sparked debate over AI autonomy and accountability. Some experts argue the breach reflects human decisions to weaken guardrails rather than AI acting independently, while others warn the models demonstrated a new level of self-directed behavior in cyber operations.

The attack also intensifies discussion over open versus closed AI systems, with Hugging Face emphasizing the need for broad access to advanced tools for defense as AI capabilities continue to evolve.

Iran’s top negotiator Mohammad Baqer Qalibaf warned that no country would be able to sell oil in the region if Iran is prevented from doing so, signaling potential disruption to global energy flows. He added that regional infrastructure would be unsafe if Iran’s security is not guaranteed.

Qalibaf said the “equation” of the conflict is “either all or none” and argued that security in the Strait of Hormuz depends on the absence of US forces, underscoring escalating tensions over control of the key النفط shipping route.

President Donald Trump is promoting “Trump Accounts,” a program offering $1,000 in government-funded investment accounts for children, as part of efforts to expand wealth-building opportunities. While millions have signed up, some families report delays in receiving the initial funding, despite the Treasury Department saying most deposits arrive within one to two days.

The tax-advantaged accounts, available to all children under 18, allow contributions from families and others, with funds invested in index funds and locked until adulthood for uses like education or home purchases. Supporters say the program broadens access to financial markets, while critics argue it does little to address immediate child poverty and comes alongside cuts to social support programs.

The rollout comes as Trump faces economic pressure ahead of midterm elections, with approval ratings on the economy remaining weak.

The US Senate is preparing to vote as early as next week on a major crypto market structure bill backed by President Donald Trump, despite ongoing disagreements between Republicans and Democrats. Passage will require support from at least seven Democrats, with ethics provisions emerging as a key sticking point.

The proposed legislation restricts federal officials and their spouses from issuing digital assets and imposes penalties for violations, though critics argue enforcement by the Justice Department is problematic. The bill also maintains limits on stablecoin yield offerings, a contentious issue for traditional banks.

The outcome is expected to influence political spending by the crypto industry ahead of the midterm elections, as firms ramp up lobbying efforts to shape regulation.

Iran’s top negotiator Mohammad Bagher Qalibaf said the situation in the Strait will not return to pre-war conditions, underscoring Tehran’s stance on a prolonged change in regional maritime dynamics.

Amazon has reduced headcount in its artificial general intelligence (AGI) group as part of ongoing, smaller-scale layoffs following a major round earlier this year. The move reflects a broader effort to streamline operations and prioritize key AI initiatives.

The company said it remains committed to developing advanced AI systems but is reallocating resources toward projects with the highest customer impact. Recent leadership changes and consolidation of AGI efforts under a broader technology group have also reshaped the division.

While the exact number of job cuts is unclear, the layoffs add to a series of workforce reductions since January, when Amazon eliminated about 16,000 roles companywide.

The US dollar slipped after four consecutive days of gains, retreating from a one-week high as markets reassessed geopolitical risks and rate expectations. The euro edged higher, while sterling also rebounded after recent losses.

The Japanese yen steadied near its weakest level since 1986, with traders weighing the likelihood of intervention by Tokyo and the prospect of faster rate hikes from the Bank of Japan. Authorities signaled readiness to act if currency weakness persists.

Rising oil prices, driven by US-Iran tensions and supply disruptions, have revived inflation concerns and lifted expectations of a Federal Reserve rate hike. However, easing expectations of prolonged conflict have limited further dollar strength.

US stocks traded mixed, with the S&P 500 flat, the Dow higher, and the Nasdaq lower, as investors balanced strong earnings against rising oil prices. Gains in companies like AT&T, Philip Morris, and Super Micro Computer offset declines in GE Vernova.

Oil prices surged over 3%, with Brent nearing $94 a barrel, driven by escalating Middle East tensions disrupting supply routes. The rise in crude has renewed inflation concerns and added pressure on equities.

Higher oil prices have pushed Treasury yields up and raised fears of further rate hikes by the Federal Reserve, while markets remain focused on AI-driven stocks and upcoming earnings, including Alphabet.

Morgan Stanley earned about $100 million in fees from the SpaceX IPO, but the bigger payoff is ongoing. The listing helped drive over $70 billion in net new assets into its wealth management arm in the second quarter, generating recurring annual revenue from managing those funds.

The bank’s workplace business, which offers equity compensation and financial services to corporate employees, has become a key pipeline for capturing wealthy clients post-IPO. Executives say such deals create multi-phase opportunities as shares unlock and new equity is issued.

The strategy reflects Morgan Stanley’s broader shift toward wealth management since the financial crisis, with the division now overseeing about $8 trillion in assets and driving record profits.

Gold extended gains, climbing above $4,150 an ounce as dip-buying supported prices despite concerns over rising US inflation and interest rates. Bullion remained anchored above the $4,000 level, seen as key support, while lower volatility attracted investors.

The rally comes amid escalating US-Iran tensions and rising oil prices, which have heightened inflation worries and pushed bond yields higher. While geopolitical risks offer support, analysts caution that higher energy costs and rate pressures could limit further upside.

Bank of America said its mergers and acquisitions pipeline remains strong even after a recent wave of deals, with steady momentum expected to continue. Investment banking fees rose sharply in the second quarter, reflecting increased deal activity.

The bank noted that midsize clients are pursuing growth, including overseas expansion, while managing risks. Despite geopolitical uncertainty, companies remain focused on long-term strategies, with limited sensitivity to small interest-rate changes.

The partnership reflects a growing trend of deep financial and operational ties between chipmakers and AI developers to support large-scale infrastructure buildouts. Anthropic, already backed by Nvidia, continues to diversify its hardware partnerships as it scales rapidly and explores a potential IPO.

SpaceX is planning at least one large-scale data center in Texas to significantly expand its AI computing capacity, according to a report. The move would build on its existing Memphis-area operations, where it already runs facilities with about 1 gigawatt of compute power.

The company has explored multiple potential sites in Texas and is considering both building new data centers and retrofitting existing structures. It has also begun relocating some data center staff to support the planned expansion.

The Texas project is expected to be on a similar or larger scale than its current infrastructure, as SpaceX ramps up AI capabilities following recent computing agreements with firms such as Anthropic.

Oklo and X-Energy are joining a $200 million US government-backed initiative to accelerate the development of advanced nuclear reactors aimed at powering AI-driven data centers. The program, led by the Department of Energy and supported by major tech firms like Microsoft and Nvidia, seeks to address surging electricity demand tied to rapid AI expansion.

The initiative, part of the broader “Prometheus” project, will fund multiple companies and research institutions to cut development timelines, reduce costs, and scale next-generation nuclear technologies. Nuclear energy is gaining traction as a reliable, carbon-free power source capable of supporting round-the-clock data center operations.

The move reflects mounting concerns over power supply constraints and rising electricity costs, which are increasingly seen as barriers to AI growth and US competitiveness against China. Analysts estimate up to 300 gigawatts of new nuclear capacity may be needed by 2050 to meet demand.

• Prologis has submitted a “best and final” £14 billion offer for Segro, increasing its proposal by 9.5% to include shares and a partial cash component of up to £3.5 billion. The bid implies a 39% premium to Segro’s pre-offer share price and a 14% premium to its net asset value.
• The move follows disagreements between the two companies over the valuation of Segro’s data center pipeline and its ability to execute independently. Prologis argues that a combined entity would better unlock value through scale and expertise.
• While some shareholders support renewed negotiations to maximize value, others back Segro’s rejection of earlier offers. Despite the improved bid, Segro’s share price remains below the offer value, indicating market skepticism over whether a deal will materialize.

U.S. gasoline futures pared earlier gains after EIA data showed an unexpected rise in gasoline inventories, signaling softer demand.

Brent and U.S. crude futures were little changed after data showed an unexpected build in U.S. crude stocks, signaling weaker demand and offsetting supply concerns.

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• U.S. natural gas futures climbed about 2.5% to a near one-week high, supported by strong summer cooling demand and rising oil prices. Warmer-than-normal weather forecasts are expected to sustain air-conditioning demand, keeping gas consumption elevated, particularly in the power sector which accounts for roughly 40% of usage.
• Markets are also awaiting the U.S. Energy Information Administration’s weekly storage report, with expectations of a modest inventory build. Production remains steady near 110 bcfd, while LNG export flows have slightly eased due to maintenance, though a rebound could tighten supply if extreme heat persists.
• Meanwhile, oil prices have surged to a six-week high on geopolitical tensions in the Middle East, indirectly supporting gas prices. Overall, the market is seeing a mix of weather-driven demand, stable supply, and potential upside from LNG exports and technical price recovery.

Rising oil prices, driven by escalating Middle East tensions and supply disruption fears, weighed on U.S. equities, with the S&P 500 and Nasdaq slipping. Brent crude climbed above $95 per barrel, hitting a six-week high after threats to shipping routes.

Investor focus remains on upcoming Big Tech earnings from Alphabet and Tesla, amid concerns over AI monetisation. Global risks intensified as tariff threats from Donald Trump and geopolitical uncertainty clouded growth outlook.

Higher energy costs are complicating central bank policy paths, while bond yields edged higher and the dollar weakened.

Markets continue to expect the Federal Reserve to hold interest rates steady in the near term, with pricing suggesting a high probability of no change at the upcoming meeting. However, persistent inflation risks, partly driven by higher energy prices, keep the possibility of further tightening on the table.