Tech and finance headlines shook markets on Friday as Trump sparked controversy by cutting $4.9B in spending without Congress’s approval, while Elon Musk battles the SEC again over Twitter stock disclosure delays.
The day started with July inflation numbers, which hit a five-month high at 2.9%, complicating the Fed’s September rate cut plans, and Markets remained jittery as tech stocks slump.
A glance at the biggest stories capturing attention today.
Tech stocks slide amid AI concerns
Tech stocks took a beating on Thursday, with Dell and Nvidia both getting hit as the whole sector pulled back.
Dell got hammered the worst, dropping about 7% after they gave a pretty weak outlook for the next quarter. Their AI server sales were especially disappointing, as analysts were expecting a lot more given all the hype around artificial intelligence infrastructure.
Nvidia didn’t escape either, falling about 3% in early trading.
With Nvidia it seems like investors have gotten so used to the company absolutely crushing numbers that anything less feels like a letdown. Plus, their growth is starting to slow down a bit, which has people worried.
What made things worse for Nvidia was news that Alibaba in China is rolling out some new AI chip that could compete with their products.
That’s exactly the kind of competition Nvidia investors have been dreading, especially coming from China where the market is huge. Read full report here
Trump’s $4.9B shockwave hits Washington
Donald Trump just pulled a move that hasn’t been used in almost 50 years, cutting $4.9 billion in federal spending without getting Congress’s permission first.
He is calling it a “pocket rescission,” which is basically a way to let money expire by waiting until the end of the fiscal year to cancel it.
Most of the cuts are hitting foreign aid programs run by the State Department and USAID.
This fits right into Trump’s long-running campaign to slash how much America spends helping other countries. The timing was key as by announcing it so late in the fiscal year, there’s no time for the money to actually get spent.
Congress is not happy about this, and it’s not just Democrats. Some senior Republican senators are also pushing back, saying Trump is stepping on Congress’s constitutional authority to control government spending.
Musk battles SEC over Twitter stake
Elon Musk is trying to get out of that SEC lawsuit over his Twitter stock purchases, asking a federal judge to just throw the whole thing out.
His lawyers are saying the late disclosure was just an honest mistake and that he came clean about owning 9.2% of the company as soon as he realized the error.
The SEC is claiming Musk broke securities rules by waiting 11 days too long to tell investors about his big stake in Twitter back in 2022.
Their theory is that this delay let him keep buying shares at lower prices before everyone knew he was accumulating a massive position.
Musk’s legal team is firing back, calling this government overreach and saying the $150 million fine the SEC wants is way over the top and unconstitutional.
Core inflation hits five-month high
July’s inflation numbers came in higher than anyone wanted to see, with core prices hitting a five-month high.
Overall inflation stayed at 2.6% compared to last year, which was expected, but the core number, the one that strips out food and gas, ticked up to 2.9%.
What’s really interesting is that people kept spending money despite these price pressures. Consumer spending jumped 0.5% from June, helped by people earning more income.
This puts the Fed in a tough spot. They’ve been hinting at cutting interest rates when they meet in September, but inflation sitting at 2.9% is pretty far from their 2% goal. Read full report here
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