😐 Apple and Meta Fined

Good afternoon! Duolingo the language app is now teaching chess, using its signature gamified lessons to help users from total beginners to casual players grasp piece movement, strategy, and tactical patterns. You’ll play mini-matches against Oscar, Duolingo’s animated coach, with difficulty adjusting as you improve.

This is Duolingo’s fastest-developed course ever, and its first new subject since math and music. It's starting in English on iOS, with a wider rollout on the way. The possibilities are endless, as Duolingo could expand this format to everything from coding to history.

MARKETS

• Wall Street got a boost Wednesday as President Trump dialed back the drama—saying he has “no intention” of firing Fed Chair Jerome Powell and signaling a softer stance on tariffs. That one-two combo was enough to send major indexes soaring, with the Nasdaq leading the charge thanks to a rally in tech stocks.

• But the party lost a bit of steam after Treasury Secretary Scott Bessent walked back some of the optimism, clarifying that the U.S. hasn’t offered to drop tariffs on China unilaterally. Still, investors clung to the idea of progress, with the Dow gaining over 400 points and the S&P logging one of its best days in weeks.

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STOCKS
Winners & Losers

What’s up 📈

• Novavax soared 19.52% on the news that the FDA has asked for more clinical data about its Covid vaccine. ($NVAX)

• Duolingo popped 10.01% after Morgan Stanley initiated coverage of the language learning company, calling it a “best-in-class consumer internet asset.” ($DUOL)

• Cava climbed 6.33% due to an upgrade from analysts at Bernstein, who think the bowl slop stock will not only survive but thrive in an economic downturn. ($CAVA)

• Amphenol rose 8.21% thanks to impressive earnings for the high-speed cable company, coupled with a solid fiscal outlook. ($APH)

• Oklo gained 8.55% after OpenAI CEO Sam Altman announced he’s stepping down as chairman of the board of the nuclear power startup. ($OKLO)

• Vertiv Holdings jumped 8.60% after the data center company posted an impressive quarterly profit and raised its fiscal forecast. ($VRT)

• GE Vernova was about 5% higher after reiterating full-year guidance despite tariff forecasts. ($GE)

• Boeing rallied nearly 6% after a strong first-quarter report. ($BA)

• Tesla jumped about 7% despite weaker-than-expected earnings and revenue. ($TSLA)

What’s down 📉

• Enphase Energy plunged 15.65% thanks to a big miss on both the top and bottom lines. ($ENPH)

• Baker Hughes fell 6.44% despite beating profit forecasts due to a revenue miss. ($BKR)

• Otis Worldwide fell 6.72% on an earnings miss due to fewer orders from Chinese customers. ($OTIS)

• Bristol Myers Squibb lost 2.59% after announcing its schizophrenia drug performed poorly in Phase 3 trials. ($BMY)

• Chubb fell 2.17% after announcing a decline in net income last quarter. ($CB)

TECH
Apple, Meta Hit by $798 Million in EU Tech Fines

The EU just served up its first-ever fines under the Digital Markets Act, hitting Apple with €500 million and Meta with €200 million for breaking the bloc’s Big Tech rulebook. Apple was dinged for blocking developers from steering users outside its App Store, and Meta for forcing users to either accept creepy ad tracking or pay up. But despite the bold headlines, the fines came in lightless than 0.15% of each company’s annual revenue.

Why the slap on the wrist? Probably to avoid poking the bear. President Trump has been raging about EU tech rules, calling them a sneaky form of trade warfare. He’s already launched a wave of “reciprocal” tariffs and warned the EU to back off American companies—or face more pain. So yeah, the EU kept it chill. A little enforcement, not full-blown escalation.

Tech Titans Clap Back

Apple and Meta weren’t exactly in a mood to apologize. Apple called the ruling unfair, saying it's being forced to “give away technology for free.” Meta’s global affairs chief said the EU is effectively slapping them with a multi-billion-dollar tariff in disguise. Both companies are appealing, and both now have 60 days to comply or risk daily fines that could make this week’s penalties look like lunch money.
This isn’t just about cash, it’s about control. The EU wants Apple to loosen its App Store grip and Meta to rethink its ad-driven empire. It’s also keeping the pressure on: Meta’s ad model is still under review, and more enforcement could be on the way. But the markets shrugged. Apple rose 2.4%, Meta popped 4%. When the fines are this soft, Wall Street barely blinks.

Big Tech vs. Brussels Is Just Getting Started

The EU is trying to show it can regulate tech without tanking transatlantic trade talks. But if Trump ramps up tariffs and the Commission keeps pushing platform changes, things could get messy fast. For now, it’s a warning shot. But don’t be surprised if the next one comes with more zeroes.

NEWS
Market Movements

• 📺 Warner Bros. Discovery Tackles Password Sharing: Warner Bros. Discovery has introduced a $7.99/month "Extra Member Add-On" for its Max streaming service to combat password sharing, following a similar move by Netflix. ($WBD)

• 📉 Intel Plans Massive Staff Cuts: Intel is reportedly set to cut over 20% of its workforce as part of a strategy to eliminate bureaucracy and restore an engineering-focused culture under new CEO Lip-Bu Tan. ($INTC)

• 💊 Eli Lilly Takes Legal Action Against Telehealth Firms: Eli Lilly has filed a lawsuit against four telehealth companies for unlawfully selling compounded versions of its drugs Zepbound and Mounjaro. The company aims to halt these sales. ($LLY)

• 🤖 OpenAI Eyes Potential Chrome Acquisition: OpenAI expressed interest in acquiring Google’s Chrome browser if forced to do so amid the ongoing antitrust investigations by the DOJ. ($GOOGL)

• 🤖 Tesla's Robot Production Hit by Export Ban: Elon Musk announced that Tesla's production of the Optimus robot is facing delays due to China's ban on heavy rare earth magnet exports, with the licensing process potentially taking over six months. ($TSLA)

• 🏢 Google Requires Remote Workers to Return to Office: Google has begun mandating some remote workers to return to the office three days per week or risk losing their jobs as part of a cost-cutting strategy. In-person collaboration is deemed crucial for innovation. ($GOOGL)

  🚨 Alaska Airlines Faces Demand Slowdown: Alaska Airlines forecasts a 6% decline in revenue for the second quarter due to falling travel demand, causing concern for its future profitability amidst economic uncertainty. ($ALK)

• ✈️ Boeing Shows Signs of Recovery in Q1: Boeing reported an 18% revenue increase to $19.5 billion in the first quarter, despite still posting a loss per share that was significantly better than expected. The company is working on reducing its massive debt load. ($BA)

• 📉 Rite Aid Prepares for Bankruptcy While Planning Asset Sales: Rite Aid is gearing up for a second bankruptcy in two years, intending to sell itself in parts due to persistent financial challenges. The pharmacy chain is exploring options amid a severe cash crunch impacting its operations.

EARNINGS
Rundown Of Earnings From Chipotle, Boeing, & IBM

🌯 Chipotle Cuts Sales Outlook as Consumer Spending Drops

Chipotle sank 2.3% in extended trading after reporting a rare 0.4% decline in same-store sales—its first drop in nearly five years—as economic jitters and reduced consumer spending took a bite out of burrito demand. The chain missed revenue expectations with $2.7 billion (vs. $2.72B forecast), though adjusted EPS still came in hot at $11.01, beating the $10.48 estimate. Chipotle also cut its full-year sales outlook, citing broad-based pullbacks across income levels, though it still plans to open up to 345 new restaurants this year—because guac expansion waits for no economy.

✈️ Boeing Beats Earnings Expectations, Ramps Up Jet Production

Boeing soared 6.06% after beating Wall Street expectations in a quarter that gave investors a rare bit of good news. The company reported $19.5 billion in revenue—just above forecasts—and an adjusted loss of $0.49 per share, much better than the expected $1.29 crater. Boeing also confirmed it's ramping up 737 MAX jet production and called 2025 its “turnaround year,” even as tariffs and halted deliveries to China continue to cloud the runway.

🖥️ IBM Stock Falls Despite Earnings Beat Amid Federal Spending Cuts

IBM beat expectations with $14.5 billion in revenue and $1.60 in adjusted EPS, but its stock still dropped 6.8% after hours as federal spending cuts and consulting headwinds came into focus. Executives flagged $100 million in canceled or paused government contracts and warned that the consulting unit is more vulnerable to DOGE-related pullbacks. IBM has been a steady outperformer this year, but investors now seem wary of whether it can maintain that momentum as macro pressures mount.

Calendar
On The Horizon

Tomorrow

Get ready for a busy day of economic insights! Tomorrow’s reports will cover a range of sectors: durable goods orders will shed light on the manufacturing landscape, existing home sales will give us a peek into the housing scene, and initial jobless claims will provide a snapshot of the labor market.

And earnings? Well, it's a jam-packed lineup: American Airlines, SK Hynix, Procter & Gamble, T-Mobile US, Merck, PepsiCo, Gilead Sciences, Union Pacific, Comcast, Keurig Dr Pepper, Sanofi, Fiserv, Bristol-Myers Squibb, BNP Paribas, Digital Realty Trust, Freeport-McMoRan, Nasdaq, L3Harris Technologies, PG&E, Valero Energy, Nokia, and Dow are all hitting the financial stage.

After Market Close:

• In other news, Alphabet has just been branded a monopoly for the second time in less than a year. There will be plenty of scrutiny on the implications of this latest ruling, but a breakup of Google's diverse operations doesn’t seem imminent. YouTube, the crown jewel, is experiencing a remarkable growth spurt that Alphabet will likely look to harness while it fine-tunes its Gemini AI model. ($GOOGL)

• Meanwhile, Intel is finding itself a bit sidelined in the AI race, with shares taking a hit of over 40% in the past year. But for the optimists, this dip presents a buying opportunity, especially with potential growth avenues from partnerships with Nvidia and TSMC. Plus, Intel has evaded the recent tariffs that have snagged rivals Nvidia and AMD. Investors are crossing their fingers for some positive news. ($INTC)

NEWS
The Daily Rundown

• 🏅 NCAA Allows Direct Payments to Student-Athletes: The NCAA has approved unprecedented changes permitting colleges to pay student-athletes directly, a historic shift in college sports. If the House v. NCAA settlement is approved, schools could collectively allocate around $20.5 million to their athletes.

• 📉 IMF Lowers U.S. Growth Outlook Amid Tariff Concerns: The IMF has revised its growth forecast for the U.S. down to 1.8% for 2025, fueled by ongoing trade tensions and uncertainties related to President Trump's tariffs. These developments signal increased recession risks and a slump in investment.

• 🏘️ Florida's Real Estate Market Faces Significant Decline: Florida experiences its steepest population drop in years, particularly in metro areas like Tampa, due to rising natural disaster risks and escalating property insurance costs. This trend reflects a market correction following the pandemic's peak.

• 📺 CBS's '60 Minutes' Executive Producer Resigns Over Editorial Independence: Bill Owens, executive producer of CBS's "60 Minutes," has resigned, citing interference with journalistic integrity amid corporate pressures, including a $20 billion lawsuit from former President Trump regarding editorial practices

• 🤝 Bessent Anticipates U.S.-China Trade De-escalation: U.S. Treasury Secretary Scott Bessent indicated a potential easing of tensions in the U.S.-China trade conflict, though negotiations have not yet begun. Positive market reactions followed these statements, hinting at investor optimism.

• 🧪 RFK Jr. Plans to Phase Out Artificial Dyes by 2026: Health Secretary Robert F. Kennedy Jr. announced a goal to eliminate eight FDA-approved artificial dyes in food and drugs by 2026, prompting food companies to seek natural alternatives. This initiative is part of his MAHA movement, which aligns with growing public concerns about synthetic dyes and their potential links to health issues.

• 🏛️ State Department Reorganization Plans Unveiled: Secretary of State Marco Rubio initiated a major State Department overhaul, reducing its workforce by 15% and consolidating over 100 offices globally. The changes aim to streamline operations and enhance fiscal responsibility while adding new focuses on cybersecurity and aid coordination.

• 💊 Roche Commits $50 Billion to U.S. Manufacturing: Swiss pharmaceutical company Roche announced a $50 billion investment to bolster U.S. manufacturing capabilities, influenced by new tariffs and policy incentives. The investment aims to enhance production and create thousands of jobs across various states.

• ⚖️ Supreme Court to Rule on LGBTQ Education Rights: The Supreme Court heard arguments regarding parents' rights to opt their children out of LGBTQ-inclusive lessons in public schools, a case stemming from Montgomery County, Maryland. The outcome could set significant precedents around educational content and parental rights.

• 🍚 Japan Turns to Korean Rice Amid Domestic Shortage: Japan has begun importing South Korean rice for the first time in over two decades due to a critical shortage driven by adverse weather conditions. As prices soar, more imports may follow, including potential easing of restrictions on American rice.

• 🛑 FDA Suspends Milk Quality Testing Following Workforce Cuts: The FDA has paused its milk quality testing program due to significant staff reductions, raising alarms about food safety. The agency is transitioning testing to a new lab but hasn't provided details on the timeline for resuming services.

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