SpaceX Files For Nasdaq IPO Under Symbol SPCX

Update (1650ET): As expected, SpaceX filed its S1.

The stock is expected to list on Nasdaq and Nasdaq Texas under the ticker “SPCX.”

No specific share count, price range, or total offering size is finalized yet (placeholders are used).

But, with expectations of a $1.5 trillion market cap, that means SPCX will trade at a 77x LTM Revenue multiple!

Mission and Overview

• SpaceX's mission is to make life multiplanetary, advance scientific understanding of the universe, and extend consciousness to the stars. It positions itself as a vertically integrated builder across Space, Connectivity (Starlink), and AI (via xAI acquisition).

• The company has revolutionized space access with reusable rockets (Falcon family, Starship development), built the world's largest LEO satellite constellation for broadband, and is scaling AI compute and frontier models (Grok) with real-time data from X.

Key Corporate Details

• Dual-class structure: Class A (1 vote/share) and Class B (10 votes/share). Elon Musk (founder, CEO, CTO, Chairman) will retain dominant voting control post-IPO (majority of the board via Class B and overall voting power), making SpaceX a “controlled company” under Nasdaq rules.

• Basis of presentation: Financials include retrospective recasts for the xAI acquisition (Feb 2026) and X Holdings (via xAI, 2025), plus a 5-for-1 stock split (May 2026).

• Underwriters: Led by Goldman Sachs, Morgan Stanley, BofA, Citigroup, J.P. Morgan, and others.

Consolidated Financial Highlights (preliminary/selected):

• Q1 2026: Revenue $4.69B, operating loss $1.94B, Adjusted EBITDA $1.13B.

• FY 2025: Revenue $18.67B, operating loss $2.59B, Adjusted EBITDA $6.58B.

• Heavy capex (especially AI) and Starship R&D; Starlink (Connectivity) is the current profit engine.

Business Segments (as of/through Q1 2026 and FY 2025)

Space (launches, Dragon, Starship development):

• Dominant global launch provider (>80% of mass-to-orbit in recent years, >99% Falcon success rate).

• Key vehicles: Falcon 9 (reusable, ~23t to LEO), Falcon Heavy (~64t), Dragon (cargo/crew to ISS), Starship (in testing, targeting full reusability and massive scale).

• Revenue: $619M (Q1 2026), $4.1B (2025). Still investing heavily in R&D/Starship.

Connectivity (Starlink):

• ~9,600 broadband/mobile satellites in LEO (~10.3M subscribers across 164 countries/territories as of Mar 31, 2026).

• High-speed, low-latency broadband (median ~225 Mbps peak for residential); expanding enterprise, government, maritime/aviation, and satellite-to-mobile (direct-to-phone, ~650 dedicated satellites, ~7.4M devices in ~30 countries).

• Strong growth: Revenue $3.26B (Q1 2026), $11.4B (2025, +~50% YoY); highly profitable at segment level.

AI (xAI/Grok/X integration):

• Gigawatt-scale terrestrial AI training clusters (e.g., COLOSSUS); plans for orbital AI compute satellites (using solar power, starting ~2028).

• Grok frontier models (truth-seeking, strong scientific reasoning benchmarks); integrated with X (~1.3B supported accounts, 550M MAUs, hundreds of millions of daily posts).

• Revenue $818M (Q1 2026), $3.2B (2025), but heavy losses due to compute/infrastructure investments.

Here's the financials visualized (xAI is represented by the green slabs)...

Free cash flow struggling under the weight of that giant green slabs...

So, xAI is the giant money suck while Starlink keeps the engine running (but despite breaking out in 2025, Starlink user growth seems to be slowing a little):

Finally, one thing that stood out was that Anthropic is paying xAI $1.25BN per month (through May 2029) to utilize 'Colossus' for AI compute.

Musk took to X to explain further his vision for this segment:

As the recently expanded partnership with Anthropic demonstrates, SpaceX is offering AI compute as a service at significant scale.

We are in discussions with other companies to do the same. 

Over time, especially with orbital data centers, we expect to serve AI at extremely high scale.

If you build it (in space), they will come?

Read the full 270-page S1 here...

*  *  *

Ahead of Thursday's scheduled launch of SpaceX's Starship V3 rocket, there are indications that Elon Musk's rocket and AI company could release its IPO filing as soon as this afternoon, giving investors, analysts, and competitors a rare look inside the finances and ownership structure of Musk's space empire.

Starship and Super Heavy V3 moved to the pad at Starbase for final testing and preparations for launch pic.twitter.com/vU21Owvoif

— SpaceX (@SpaceX) May 19, 2026

On Tuesday, The Wall Street Journal reported that Goldman Sachs secured the lead-left role on SpaceX's upcoming IPO, positioning it as the top banker on what could become one of the largest public offerings in history.

SpaceX is expected to seek a valuation of up to $2 trillion, raising an estimated $75 billion to help fuel its AI and Starship rocket-launch ambitions after merging with xAI and pursuing plans for orbital data centers.

The company confidentially filed IPO documents with the SEC in early April, and its public S-1 filing is expected at any moment today.

Last Friday, Reuters reported that the IPO is set for pricing on June 11, followed by a June 12 debut.

The ticker "SPCX" leads the Polymarket bet, "What will SpaceX's public ticker be?" at 91% by lunchtime in New York.

//--> //--> Will SpaceX's public ticker be another ticker?
Yes 91% · No 9%
View full market & trade on Polymarket

Elon Musk virtually attended a summit in Tel Aviv on Monday, where he said, "We've got to get the SpaceX IPO stuff going here pretty soon." Those comments put a bid into AST SpaceMobile, EchoStar, and Rocket Lab.

Bloomberg's Eric Johnson outlined what exactly to look for when the S1 drops:

• The company, known formally as Space Exploration Technologies Corp., is expected to pick Nasdaq as its listing venue, which would set it up for potential inclusion in the Nasdaq 100.

• The IPO filing could include key financial details like revenue and net income across its launch, Starlink and artificial intelligence businesses, as well as capital spending on key programs like its colossal Starship rocket.

• key programs like its colossal Starship rocket * SpaceX's filing is set to reveal the hierarchy of the banks running the deal. Goldman Sachs Group Inc. and Morgan Stanley are the lead firms, with Bank of America Corp., Citigroup Inc. and JPMorgan Chase & Co. also working on the transaction, people familiar with the matter have said.

• SpaceX will list its largest shareholders, including Musk himself and Alphabet Inc.'s Google; its investors also include Valor Equity Partners, Sequoia and Andreessen Horowitz.

• We should find out how voting control of the company will be set up. SpaceX is considering a dual-class share structure, people with knowledge of the plans have said, which could allow Musk to maintain control of the company even with a minority stake.

• The filing likely won't include information on the price range per share, number of shares offered, shares outstanding or precise shareholdings. Those usually come at the start of formal marketing, which could be as early as June 4, ahead of pricing as soon as June 11, Bloomberg News reported.

The Information's Cory Weinberg published five charts making sense of the IPO numbers: 

1. SpaceX is expected to file its S-1 publicly as soon as tomorrow.

We've reviewed parts of the draft prospectus and tried to make sense of the numbers. Here are 5 charts that explain the company before the largest IPO in history goes live.

2. The company has accumulated $37 billion in losses over its 24-year history — larger than what the next 10 major loss-making tech IPOs *combined* had to disclose at their offerings.

3. SpaceX will tell investors it has $6.6 billion in 'adjusted' profit last year. Under standard accounting, it lost $4.9 billion. 

That gap between headline profit and actual profit is larger than at CoreWeave, Viasat, or Tesla.

4. Starlink dominates. The satellite internet business generated $11.4 billion in revenue last year — more than 7 leading publicly traded satellite communications operators combined.

5. The Space segment — SpaceX's launch business — grew only 8% last year. That's because about three-quarters of Falcon 9 launches were for internal Starlink missions rather than outside customers.

6. The AI segment (X plus xAI) grew 23% last year, compared to over 1,000% for Anthropic and nearly 300% for OpenAI. xAI was slowest-growing of the major AI labs.

View Weinberg's report here. 

With SpaceX set to be the first out of the gates among the three giant tech IPOs, we can't help but wonder how well the record high market will absorb such supply (and what will be sold to make room for it)...

Shares of Goldman Sachs and Morgan Stanley were up around 4% during the lunch hour. These banks are expected to be the lead managers on the IPO.

Tyler Durden Wed, 05/20/2026 - 17:00

Nvidia Unchanged Despite Big Earnings Beat And Solid Guidance

As we discussed extensively in our preview, besides the Q1 revenue and guidance ($82BN+ and $90BN whisper respectively), Wall Street was expecting to get more color on the following topics during today's call and Q&A:

1. Potential for increased shareholder cash returns,
2. Vera Rubin ramp timing (2H 26E),
3. Gross margin durability (~75% amidst continued memory/other cost inflation),
4. Update to the $1 Trillion 25-27 forecast, esp. contribution from LPU racks, CPU and Vera Rubin Ultra, not included before
5. Potential upside from agentic AI to the server CPU business;
6. Competitive landscape changes against Google TPU, agentic CPU, other ASICs. 

With that in mind, here is what the world's biggest company just reported for Q1:

• Revenue $81.62BN, beating Exp $79.19BN, but a bit light of the $82BN whisper 
• Adj EPS $1.87, beating Exp $1.76
• Adj. Gross Margin 75%, beating Exp. 74.5%

Solid all around. 

The company's all-important disclosed Data Center revenue was a record $75.2 billion in Q1, up 21% from the previous quarter and up 92% from a year ago. Nvidia also said that Vera Rubin is on track for second half of 2026. 

“The buildout of AI factories — the largest infrastructure expansion in human history — is accelerating at extraordinary speed,” said Jensen Huang, founder and CEO of NVIDIA. “Agentic AI has arrived, doing productive work, generating real value and scaling rapidly across companies and industries. NVIDIA is uniquely positioned at the center of this transformation as the only platform that runs in every cloud, powers every frontier and open source model, and scales everywhere AI is produced — from hyperscale data centers to the edge.”

Looking ahead, the company guided to revenue of $91.0 billion (plus or minus 2%), which is on top of the whisper number that had been discussed earlier. Certainly a solid guide, especially since  NVIDIA is not assuming any Data Center compute revenue from China in its outlook. 

Some more guidance:

• Additionally, gross margins are expected to be 74.9% and 75.0% (GAAP and non-GAAP)  plus or minus 50 basis points.
• Operating expenses are expected to be approximately $8.5 billion and $8.3 billion (GAAP and non-GAAP, respectively).

A quick word on margins: as Bloomberg explains,  75% in an environment where, as the CFO defends it, they are shifting between architectures and Blackwell-based platforms are ramping up. Typically new chip ramps pressure margins because yields and supply chains can be messy at the start/early on. Nvidia holding at 75% is good, if almost unrealistic. 

In Q1, the company generated $48.6 billion in free cash flow, a staggering amount, which helped fund $20.0 billion in shareholder returns in the form of shares repurchased and cash dividends (as of the end of the first quarter, the company had $38.5 billion remaining under its share repurchase authorization). More importantly, the Board of Directors approved an additional $80.0 billion to the Company’s share repurchase authorization. Also of note, Nvidia's cash and marketable debt were $50 billion at the end of the quarter. That was down by a couple of billion dollars. 

Another notable thing is that NVIDIA said it was transitioning to a new reporting framework that "better reflects its current and future growth drivers." NVIDIA will have two market platforms — Data Center and Edge Computing.

• Within Data Center, NVIDIA will report two sub-markets, Hyperscale and ACIE, which incorporates AI Clouds, Industrial and Enterprise. Hyperscale will include revenue from the public clouds and the world’s largest consumer internet companies, while ACIE addresses NVIDIA’s growth opportunity in diverse AI purpose-built data centers and AI factories across industries and countries.
• Edge Computing highlights data processing devices for agentic and physical AI including PCs, game consoles, workstations, AI-RAN base stations, robotics and automotive.

Under the previous sub-markets, Data Center compute revenue was a record $60.4 billion, up 77% from a year ago and up 18% sequentially. Data Center networking revenue was a record $14.8 billion, up 199% from a year ago and up 35% sequentially. The only problem: Compute missed expectations, which probably explains why NVDA will no longer break it out.

And another red flag: inventory soared. Usually this is a horrible sign for component makers. In this case Nvidia is saying that it has been spending to secure strategic inventory and capacity to “meet demand beyond the next several quarters.” Of course, there would not be a shortage to begin with if inventory was not being massively stockpiled.

In any case, the market is glossing over the negatives, and focusing on the solid beat and guidance (even if compute appears to be lagging), and as a result after briefly dumping then pumping, the stock is unchanged, which means all that options traders who were betting on a 5.5% move after hours are about to see their calls and puts expire worthless.

Tyler Durden Wed, 05/20/2026 - 16:48

A Troubling Trend: Why More Workers Are Tapping 401(k)s Early And How To Resist

Authored by Due via The Epoch Times,

What’s the main goal of your 401(k)? Well, my dear Watson, it’s to provide for your retirement. Specifically, it’s a long-term investment that benefits from compound interest. But for a record number of Americans, the “long term” is taking a back seat to immediate financial struggles.

Early 401(k) withdrawals can create costly setbacks for future retirement savings. ShutterstockProfessional/Shutterstock

In 2025, 6 percent of Vanguard 401(k) plan members took hardship withdrawals. That’s a big jump from 4.8 percent in 2024 and much higher than the roughly 2 percent annual rate we saw before the pandemic.

This trend, highlighted by the World Economic Forum and MarketWatch, paints an alarming picture of the American workforce’s financial health. Costs are rising, stress is growing, and well-intentioned regulatory changes are having unintended consequences.

That said, now is the time to investigate why this is happening and to identify the hidden costs. And, most importantly, you need realistic ways to avoid making your retirement nest egg an emergency fund.

The Breakdown: What’s Driving the Surge?

It’s not a coincidence that hardship withdrawals are at an all-time high. This is the result of several powerful economic forces colliding:

A Squeeze of Rising Costs and Financial Stress

It’s not a secret that life has gotten more expensive. Even though some metrics indicate a slowdown in inflation, the cumulative effect of price hikes in groceries, housing, and other essentials over the last few years has significantly reduced consumer purchasing power. As an example, consumer prices are approximately 25 percent higher than they were in January 2020.

As such, a small unexpected expense can trigger a crisis for many families with little to no financial buffer. In fact, according to a Bankrate survey, just 47 percent of Americans have sufficient liquidity or access to funds to cover a $1,000 emergency expense.

The Urgent Nature of the Withdrawals

These withdrawals aren’t for vacations or new cars. According to Vanguard, the median withdrawal amount in 2025 was $1,900. And, among the reasons people tapped their 401(k)s, these were the most common:

• Avoiding foreclosure or eviction (36 percent)
• Medical expenses (31 percent)
• Tuition (13 percent)
• Primary residence repairs (11 percent)
• Primary residence purchase (5 percent)

Ultimately, withdrawals represent a broader challenge: Americans have relatively few retirement savings at their disposal.

Lowered Hurdles Have a Positive Impact

Ironically, some recent regulatory changes intended to ease the burden may be contributing to the rise. As a result of legislation such as the SECURE Act 2.0 (SECURE refers to Setting Every Community Up for Retirement Enhancement.) and legislation from the pandemic era, it’s now significantly easier to access funds in a 401(k). Depending on the situation, the rules now allow withdrawals of up to a defined amount (like $1,000) without penalty for “unforeseeable or immediate financial needs.”

As important as this flexibility is in a real catastrophe, it also lowers the psychological and logistical bar to leveraging these funds. The result, though, is that your retirement account looks more like a savings account, which is a very dangerous mentality.

The True Cost of ‘Easy Money’

When you’re facing eviction or a huge medical bill, $5,000 from your 401(k) can seem like a lifeline. But that lifeline comes at a heavy price, one that is often overlooked in times of crisis, such as the following.

Immediate Tax Consequences

Unlike a 401(k) loan that you repay with after-tax funds, a hardship withdrawal is permanent. Therefore, the withdrawal amount is generally taxable as ordinary income. When you take out $10,000, for example, and are in the 22 percent tax bracket, you’ll immediately owe $2,200 in federal taxes, which reduces your actual relief to $7,800.

Potential Penalties

If you’re under 59 ½ years old, you will likely face an additional 10 percent early withdrawal penalty on top of income tax. That’s another $1,000 gone from your $10,000 withdrawal, bringing the total cost of immediate access to 32 percent.

The Devastating Sacrifice of Compound Growth

Obviously, this is the highest and most invisible cost. Imagine if the $10,000 you withdrew had been left to grow for another 20 years. With an average annual return of 7 percent, that money would have grown to about $38,700. By taking out that money now, you are not only borrowing $10,000 from your future self; you’re erasing almost $39,000 from your retirement account.

This is a magic trick. That’s the power of compound interest. Knowing this sooner will help you realize that 401(k) withdrawals aren’t “easy money”—they’re incredibly expensive loans.

The Irony: A Healthy System With Struggling Participants

An astounding contradiction can be found within the same 2025 data: even though record numbers of people are tapping into their 401(k)s for emergencies, the average 401(k) balance actually grew by 13 percent since 2024.

In addition, more recent analysis from Fidelity shows average 401(k) balances climbed more than 11 percent, indicating that nest eggs have rebounded after recent swings in the markets.

Although this may seem confusing, it indicates a widening gap. While many workers contribute consistently and benefit from employer matches, consistent contributions, and strong market conditions. Their wealth is growing.

Meanwhile, the 6 percent of participants who resort to hardship withdrawals constitute a vulnerable segment of the population. Although the retirement system appears healthy on the surface, they’re suffering the brunt of the affordability crisis. This is a powerful reminder that “average” statistics can mask serious underlying problems.

Realistic Strategies to Keep Your 401(k) Locked

If recent data tells us anything, it’s that relying on your 401(k) as a backup checking account is a high-stakes gamble. To ensure your retirement fund remains dedicated to your future, you need a proactive defense. Here are realistic, actionable options to keep that vault closed.

Re-Evaluate and Automate Your Budget

This is the foundational work that makes everything else possible. If you don’t track your spending, you can’t control it. Before you can build momentum, you have to stop the bleeding by identifying exactly where your cash is going.

• Audit your “leaks.” For one month, track every cent. You’ll likely find “ghost” expenses, like unused subscriptions, frequent small convenience purchases, or delivery fees, that are quietly draining your ability to save.
• Establish a “needs vs. wants” hierarchy. Be ruthless. Shelter, utilities, groceries, and minimum debt payments are non-negotiable needs. Everything else is a want. If your financial foundation feels shaky, wants must be the first thing to go.
• Use the right tools. Modern technology makes this much less painful. Using financial apps, such as WalletHub or Monarch Money, can put you in total control. By linking your accounts, your expenses are automatically categorized, allowing you to see your spending patterns in real-time. These tools also allow you to effortlessly manage and cancel subscriptions in one place, ensuring you aren’t paying for services you no longer use.

Build a ‘Firewall’ Emergency Fund

An emergency fund is the only thing standing between a flat tire and a raided retirement account.

• Start with a mini-goal. Don’t let the “six months’ expenses” rule overwhelm you. Start with a small target you can afford, whether it’s $300 or $1,000. That single amount covers the vast majority of common shocks, from a basic car repair to an urgent medical copay.
• Make it invisible. Set up a recurring transfer from your checking account to a separate high-yield savings account on the day you get paid. Even $25 or $50 per pay period builds a psychological and financial buffer. If the money never hits your main account, you won’t miss it.

Explore Smarter Alternatives for Fast Cash

Before you touch your 401(k), exhaust every other avenue. Retirement should be the last door you open.

• Low-interest personal loans. You can manage debt or major expenses with a low-interest personal loan from a credit union or bank without incurring heavy taxes or losing compounding interest. For well-qualified borrowers, fixed-rate loans offer predictable, manageable monthly payments with rates as low as 10 percent.
• 0 percent APR balance transfers. If high-interest credit card debt is the primary stressor, a zero percent introductory APR card can give you a 12-to-18-month window to pay down the principal without accruing more interest.
• Community and state programs. Local and federal organizations assist with housing and utility crises, such as 2-1-1, HUD, and the Homeowner Assistance Fund (HAF). Before sacrificing your future security, take advantage of these programs designed to prevent eviction and foreclosure.

A Final Safety Valve: The 401(k) Loan

If you have truly exhausted every other option and are facing an immediate crisis, such as eviction, a 401(k) loan is generally a better choice than a hardship withdrawal.

• Why is it better? Essentially, you’re borrowing money from yourself and paying the interest back to yourself. In addition, it does not trigger the 10 percent early withdrawal penalty or immediate income tax.
• The critical caveat. You must repay it, typically within five years, via payroll deduction. Be aware that if you leave your job, the remaining balance is often due immediately. If you can’t pay it back, it defaults into a withdrawal—triggering the exact taxes and penalties you were trying to avoid at a time when you may be least able to afford them.

Conclusion: Protecting Your Future, One Day at a Time

Vanguard’s 2025 data is alarming. Americans are increasingly financially vulnerable to the point that their primary tool for future security is being wiped out by today’s pressures. This is not a sustainable path.

The first step is to understand the “why” behind this trend, which is rooted in financial stress, urgent needs, and simplified rules. The second step is to acknowledge the true, exorbitant cost of this immediate relief.

In the end, building a financial infrastructure that can withstand storms is the key to preventing your 401(k) from being a go-to ATM. Start with a real budget and an emergency fund, no matter how small. Even when today’s demands seem overwhelming, you must discipline yourself and put your future first.

Remember, your 401(k) shouldn’t be viewed as a piggy bank but as a tool to ensure you’ll have the lifestyle you want in your golden years. Don’t risk your retirement for a temporary fix. The costs are simply too high.

By John Rampton

The views and opinions expressed are those of the authors. They are meant for general informational purposes only and should not be construed or interpreted as a recommendation or solicitation. The Epoch Times does not provide investment, tax, legal, financial planning, estate planning, or any other personal finance advice. The Epoch Times holds no liability for the accuracy or timeliness of the information provided.

Tyler Durden Wed, 05/20/2026 - 16:20

Trump Order Increases Scrutiny Of Illegal Immigrants' Banking Activity

Authored by Aldgra Fredly via The Epoch Times,

President Donald Trump signed an executive order on May 19 directing Treasury Secretary Scott Bessent to provide banks with an advisory on financial risks posed by individuals living in the country illegally.

In his order, Trump urged banks to pay attention to credit risks posed by offering mortgage loans, car loans, credit cards, and other consumer credit products “to the inadmissible and removable alien population.”

“Many of those borrowers face the possibility of the loss of wages due to removal or their employers’ decisions to comply with immigration law,” the president stated.

“Lending to aliens without legal work authorization or who face a substantial loss-of-wage risk creates a structural ‘ability to repay’ deficiency that undermines the safety and soundness of the national banking system.”

The order directs Bessent to issue an advisory to banks on identifying red flags tied to payroll tax evasion by employers or labor brokers, as well as accounts opened in another person’s name to obscure the real beneficial owner’s identity.

Other warning signs highlighted in the order include the use of payment services that are unregistered with regulators to make “off-the-books” wage payments—meaning that employers did not report wages to authorities—labor trafficking, and the use of individual taxpayer identification numbers to obtain credit products or open bank accounts without verified lawful immigration status in the United States.

The order also requires the Treasury Department to consult with financial regulators and propose changes to the Bank Secrecy Act that would allow banks and other financial institutions to obtain customer identity information.

The proposed changes would allow banks to collect information on whether account holders have “lawful immigration status and employment authorization in the United States when such information is relevant to assessing risks associated with fraud, identity misrepresentation, sanctions evasion, or other illicit financial activity,” according to the order.

Sen. Tom Cotton (R-Ark.) has previously urged Bessent to conduct a review on “current rules that allow illegal immigrants to obtain financial services and access to the U.S. banking system.”

In an October 2025 letter to Bessent, Cotton said major banks currently accept identification documents from other countries as primary identification without verifying the immigration status of applicants in the United States.

“Access to the American banking system is a privilege that should be reserved for those who respect our laws and sovereignty,” Cotton wrote in the letter.

“When individuals are allowed to open accounts without verifying legal status, we are permitting illegal aliens to establish financial roots and integrate economically, all while bypassing the legal channels that millions use properly.”

Tyler Durden Wed, 05/20/2026 - 15:40

Senate Advances Measure To Withdraw US Involvement In Iran Conflict

Authored by Kimberley Hayek via The Epoch Times,

The Senate advanced legislation Tuesday directing President Donald Trump to withdraw American forces from the Iran conflict unless Congress authorizes continued operations or declares war.

Lawmakers approved the resolution by a 50–47 vote.

The measure, rooted in the 1973 War Powers Resolution, cleared a key procedural hurdle after Sen. Bill Cassidy (R-La.) voted for the resolution. Cassidy, who had previously voted against similar measures introduced several times this year, delivered the decisive margin.

Three other Republicans—Sens. Rand Paul (R-Ky.), Susan Collins (R-Maine), and Lisa Murkowski (R-Alaska)—also voted for the resolution. Only one Democrat, Sen. John Fetterman (D-Penn.), voted against it. Three Republicans, Sens. John Cornyn (R-Texas), Thom Tillis (R-N.C.), and Tommy Tuberville (R-Ala.) were absent.

Senate Minority Leader Chuck Schumer (D-N.Y.) reacted immediately.

“Republicans are starting to crack, and momentum is building to check him,” he said in a statement after the vote, referring to Trump. “We are not letting up.”

Cassidy announced his changed position in an X post before the vote.

“While I support the administration’s efforts to dismantle Iran’s nuclear program, the White House and Pentagon have left Congress in the dark on Operation Epic Fury,” he wrote.

“Until the administration provides clarity, no congressional authorization or extension can be justified.”

The senator’s reversal followed his primary election loss Saturday in Louisiana. Trump had endorsed Cassidy’s challenger, Rep. Julia Letlow (R-La.), and the defeat left Cassidy defiant upon his return to Washington.

Letlow won more than 44.8 percent of the vote, while Louisiana Treasurer John Fleming received 28.3 percent and Cassidy received 24.8 percent, according to results after 99 percent of the votes were tallied.

Support for an Iran War Powers resolution has slowly gained support with each tally.

Sen. Mike Rounds (R-S.D.), who supports the initial decision to strike Iran’s nuclear sites but favors congressional debate, explained the shift in tone.

The War Powers Resolution of 1973 “does provide an avenue for that discussion and debate to occur.” He added, “But I think a number of our members maybe just feel like it’s time to have the debate.”

Democrats highlighted economic fallout from the stalemate. Sen. Chris Murphy (D-Conn.) said on the floor, “Peace negotiations are stuck and so day after day after day grocery prices climb, gas prices climb.”

The resolution would require the president to pull U.S. troops unless lawmakers act. Trump has maintained that a fragile ceasefire declared after initial strikes ended active hostilities, potentially sidestepping the law’s requirements.

The resolution would mandate congressional authorization of U.S. involvement in the conflict, which began with Israeli and U.S. strikes on Iranian targets at the end of February.

Previous attempts to end the Iran operation failed in the Senate. Republicans had blocked comparable resolutions until Cassidy’s vote and the rising concerns over increasing energy costs.

The conflict began on Feb. 28 when U.S. and Israeli forces launched strikes against Iran. Called Operation Epic Fury by the United States, it targeted Iranian nuclear sites and killed Iranian Supreme Leader Ali Khamenei along with other senior Iranian officials. Trump formally notified Congress on March 2 that U.S. forces had entered into combat operations, which set off the 60-day statutory clock under the 1973 War Powers Resolution.

The 1973 law states that a president “shall terminate any use of United States Armed Forces ... unless the Congress has declared war or has enacted a specific authorization for such use of United States Armed Forces” within 60 days of notifying Congress of hostilities.

Tyler Durden Wed, 05/20/2026 - 15:00

Trump AI Executive Order To Seek Early Access To Advanced Models

After Anthropic's 'Mythos' model sent shockwaves through the cybersecurity world due to its ability to find and exploit software vulnerabilities at breakneck speed, the Trump administration is reportedly on the cusp of issuing a much-discussed executive order that would encourage AI companies to provide information on their advanced models to the government before public release. 

Anthropic's Dario Amodei

According to Axios, the order - which could come as soon as this week - will outline plans for a voluntary framework - meaning companies can just ignore it - under which AI labs would share their models with the government at least 90 days before public release, while also giving access to certain critical infrastructure providers. 

Mythos and OpenAI's latest model, GPT-5.5-Cyber, have raised alarm bells both inside and outside government due to their ability to find and exploit software vulnerabilities with unprecedented speed. 

The EO will also cover cybersecurity, and "aims to secure the Pentagon and other national security agencies, boost cyber hiring, shore up cybersecurity systems across the country at places like hospitals and banks, and encourage threat sharing about breaches between the AI industry and government."

The component covering the advanced 'frontier' models such as Mythos would involve multiple layers of government review to see if it qualifies as a "covered frontier model," and then assess them prior to public release.

The voluntary 90-day pre-release sharing framework lets the government:

• Review models early via national security and civilian agencies.
• Assess risks.
• Advise labs or critical infrastructure providers.
• Prepare defenses if needed.

This gives the White House situational awareness on what's coming down the pike, without trying to outright regulate or slow U.S. AI companies (which would contradict the administration's "America first / global dominance" stance on AI).

In short: It signals "we want to keep an eye on the dangerous models" to the public and adversaries, builds relationships for threat intel, and keeps the U.S. competitive. Whether companies actually engage will depend on norms, pressure, and self-interest. If the final version (expected soon) adds more carrots/sticks, its teeth could sharpen.

Tyler Durden Wed, 05/20/2026 - 14:45

Data Centers Could Be 33% Of Commercial Building Electricity Use By 2050: EIA

By Diana DiGangi of UtilityDive

The U.S. Energy Information Administration projects that data centers will “increasingly skew more energy intensive” and that electricity consumed by them will increase across all commercial building stock, with their servers growing to make up an estimated 22% to 33% of commercial building electricity use by 2050, according to an April report.

In its 2026 Annual Energy Outlook, EIA modeled various scenarios to explore how much data centers might drive demand in the medium and long term. In its high electricity demand scenario, the agency assumed “growth in the installed stock of AI servers follows an exponential trend through 2050” and didn’t make any assumptions about increases in computational efficiency beyond historical trends. 

"These assumptions lead data center server energy use alone to grow to 818 billion kilowatt hours in 2050 in the High Electricity Demand case,” EIA said. “Server electricity consumption in 2050 is more than 16 times that in 2020.”

In its counterfactual base case, EIA models how “U.S. and world energy markets would operate through 2050 under laws and regulations in force as of December 2025,” but said that this “should not be regarded as the most likely of the cases.”

EIA projects that electricity consumption in the U.S. will continue to grow through 2050 at an annual rate of 0.9% to 1.6%, “with data center server energy use a major factor,” after the previous five years saw a 2.1% average annual demand increase, which followed 15 years of nearly flat demand.

“Energy use in commercial buildings, home to data center activity, grows more rapidly than in the residential or industrial sectors in all modeled cases,” the report said. In a Tuesday release, EIA noted that “across all cases, servers alone accounted for an estimated 7% of commercial sector electricity consumption in 2025.”

In both EIA’s high electricity demand scenario and its counterfactual base case, the commercial sector’s electricity intensity — measured in kilowatt hours of electricity consumed per square foot — eventually exceeds the 2003 historical high of 14.9 kWh per square foot for the first time in either 2031 or 2032, depending on the scenario.

In its counterfactual base case, EIA projects that “after 2040, servers will become increasingly efficient, resulting in a 10% reduction in average annual operational power draw every three years, above and beyond historical efficiency trends. However, continued growth in server installations drives overall consumption growth.”

Tyler Durden Wed, 05/20/2026 - 14:25

Solid 7Y Auction Prices "On The Screws" With Solid Foreign Demand

Today's lone coupon auction, the sale of $16BN in 20Y notes, took place at 1pm, just an hour ahead of the FOMC Minutes release, and the auction was generally very strong, with maybe a one glitch. 

The sale stopped at a high yield of 5.122%, up from 4.883% in April, and the second highest in the history of the 20Y auction with just the 5.257% in October '23 printing higher. The yield stopped on the screws with the When Issued 5.122%, and followed two stopping through auctions, and 11 of the past 12). 

The bid to cover was 2.55, down from 2.68 in April and arguably the only weak spot in today's auction, as it was the lowest since February. 

The internals were solid, with Indirects awarded 67.67%, up from 67.39% and the 63.5% recent average. And with Directs taking 22.9%, unchanged from the previous month, Dealers were left with 9.4%, down from 9.7% and one of the lowest Dealer awards on record.

Overall, this was a solid 7Y auction and one which had no problem finding buyers despite, or perhaps because of the recent surge in yields which today has reversed modestly thanks to lower oil prices.

 

Tyler Durden Wed, 05/20/2026 - 13:20

Trump Admin Announces Criminal Charges Against Former Cuba President Raul Castro

Update (1300ET): As we wrote earlier in anticipation, the US sought to unseal an indictment against former Cuban President Raúl Castro, sharply escalating a standoff with Havana as the Trump administration attempts to force change on the island after nearly seven decades of communist rule.

The charges are related to the shooting of two humanitarian planes in 1996.

The Department of Justice asked to unseal the indictment against Castro and five other people in a filing in federal court in Florida on Wednesday.

The indictment charges Castro with seven counts including conspiracy to kill U.S. nationals, destruction of aircraft and murder for each of the four passengers aboard the planes being flown by Brothers to the Rescue, a group that conducted rescue missions for Cuban exiles who sought to flee the country.

For 30 years, Cuban exiles in America and their representatives in Congress such Rep. Carlos Gimenez, R-Fla., pressured the DOJ to bring charges against the 94-year-old Ruz, his late brother Fidel, and others in connection with the Cuban MiG fighter jets shooting down the BTTR civilian planes when they were outside Cuban airspace and flying back toward Florida.

A number of Republican members of Congress on Wednesday morning held a press conference condemning the Communist Cuban regime and Ruz and saying they expected him to be charged. The indictment against Ruz was unsealed later in the day.

*  *  *

As American Greatness detailed earlier, the Trump administration is preparing to escalate pressure on Cuba’s communist regime by pursuing criminal charges against former Cuban leader Raúl Castro over the 1996 shootdown of civilian aircraft operated by a Miami-based exile group.

According to reports, the charges are expected to be announced Wednesday and would center on the incident in which Cuban fighter jets destroyed two planes flown by Brothers to the Rescue, killing all four men aboard.

The US Department of Justice is expected to make the announcement in conjunction with a ceremony hosted by the US Attorney’s Office in Miami honoring the victims of the attack.

The indictment would mark a major escalation in President Donald Trump’s campaign against the Cuban regime, which has remained in power since Fidel Castro’s communist revolution in 1959.

Raúl Castro, now 94, served as Cuba’s defense minister at the time of the attack and later succeeded his brother, Fidel Castro, as president.

The two planes belonged to Brothers to the Rescue, an organization formed by Cuban exiles in Miami that searched for refugees attempting to flee the island across the Florida Straits. Cuban authorities claimed the aircraft violated Cuban airspace and justified the attack as a defensive action.

The United States condemned the shootdown at the time and imposed sanctions on Havana, but previous administrations stopped short of criminally charging either Castro brother.

An international aviation investigation later concluded the planes were destroyed over international waters.

The expected indictment comes as the Trump administration intensifies its pressure campaign against Cuba’s socialist government. The administration has tightened sanctions and threatened penalties against countries supplying fuel to the island, worsening economic conditions and contributing to severe power shortages across Cuba.

Cuban Foreign Minister Bruno Rodríguez recently struck a defiant tone amid growing tensions with Washington.

“Despite the embargo, sanctions and threats of the use of force, Cuba continues on a path of sovereignty towards its socialist development,” Rodríguez said earlier this month.

The administration’s expected legal action against Castro mirrors previous moves against other anti-American socialist regimes in Latin America. Earlier this year, former Venezuelan leader Nicolás Maduro was captured following a US military raid after being indicted on drug trafficking charges.

Tyler Durden Wed, 05/20/2026 - 13:11

Commercial Electricity Use Will Surpass Residential In 2027, As Price Surge Set To Continue: EIA

By Robert Wilson of UtilityDive

Commercial electricity consumption is likely to surpass residential use for the first time on record in 2027, the U.S. Energy Information Administration said Tuesday in its Short-Term Energy Outlook.

The commercial sector, which includes hyperscalers, bitcoin miners and cloud computing, is expected to see electricity sales grow 2.2% to about 1,530 billion kWh in 2026 — roughly the same as the residential sector — followed by 5.3% growth the following year, EIA said.

Demand from the residential sector, which has historically accounted for the largest share of U.S. electricity use, will remain largely flat over the next two years, growing about 0.5% in 2026 and 2027. Total U.S. electricity consumption in 2026 will be almost 4,250 billion kWh, up 1.3% from 2025, and is expected to grow 3.1% in 2027.

Meanwhile, U.S. residential electricity prices will continue to rise amid growing demand, particularly from the commercial sector, which includes data centers, the EIA said.

Residential customers will pay an average of 18.2 cents/kWh this year, “a nearly 5% increase from 2025, which is similar to the increase in U.S. prices between 2024 and 2025,” EIA estimated. “We expect residential prices to grow at a slightly lower rate of 2% next year.”

“Residential prices have been growing in all regions of the United States, and we expect this trend to continue,” EIA said. Areas along the East coast will experience the largest increases in residential prices, with average annual growth as high as 7% for the next two years.

“Electric utilities in these regions are citing various factors for rising electricity rates, including higher fuel prices for generation and expenses for bolstering the transmission grid against extreme weather and to accommodate rising power demand,” the short-term outlook said.

Industrial sales, the smallest of the three segments, are also rising, according to EIA. “We forecast industrial electricity consumption will grow by 1.0% in 2026 and 4.0% in 2027 to reach a total of 1,095 [billion] kWh next year,” the monthly report said. “Increases in electricity demand for both the commercial and industrial sectors is strongest in the West South Central region, driven by data center and manufacturing growth in Texas.”

Tyler Durden Wed, 05/20/2026 - 13:00

FOMC Minutes Preview: Look For "Easing Bias" Dissent Details Inside Powell's Hawkish Swan Song

Today's FOMC minutes, released at 2pm ET, will be closely watched for further details surrounding the increasingly hawkish split within the Committee following the April meeting, Jerome Powell's last as Fed Chair. With three voters dissenting against retaining the easing bias - and Fedʼs Collins later suggesting she would have supported removing it too - markets will look to see how broad support was for removing the easing bias, particularly after Powell said more officials now view a hike just as likely as a cut, according to Newsquawk.

Discussions around inflation risks and the labor market will also be in focus given the current macro backdrop, with the jobs market viewed as stable while inflation remains above target and faces upside risks from the Middle East conflict. Traders will also watch for any early signs of debate surrounding future balance sheet policy with Warsh set to take over as Chair from Powell. 

The April FOMC statement and vote split leaned hawkish. While outgoing Governor Miranʼs dissent in favor of a 25bps rate cut was widely expected, three voting members (plotted below) dissented against retaining the easing bias in the statement (Hammack, Kashkari, Logan).

As a reminder:

• Hammack said the easing bias was no longer appropriate given broad-based inflation pressures, higher energy prices, resilient growth and a labour market near full employment.
• Kashkari said he wanted to signal growing rate hike risks, warning that a large price shock could unanchor inflation expectations and require tighter policy to defend the Fedʼs 2% target.
• Logan dissented because she believed the Fed should not imply easing given uncertainty around the outlook, stable employment and concern about getting inflation back to 2%.

Elsewhere, the statement shifted inflation language, replacing “somewhat elevated” with “elevated”, while also attributing the move to higher global energy prices. On the Middle East, the Fed dropped the prior “uncertain implications” wording, instead stating directly that developments are “contributing to a high level of uncertainty”. Growth and labor market language was otherwise largely unchanged, with activity continuing to expand at a “solid pace” and unemployment “little changed”. 

However, given energy prices have continued to rise in the wake of the meeting, and money markets are no longer pricing rate cuts this year (with markets currently discounting roughly a 60% probability of a hike by year-end), traders will look for evidence of how widespread inflation concerns were within the Committee and what conditions could push the Fed towards hikes. That said, the minutes reflect discussions held at the time of the meeting, meaning the recent hot CPI and PPI reports will not yet be incorporated. 

Powell said policy remains in a “good place” to wait and see, but acknowledged the Committee is moving closer to dropping its easing bias, with more officials now viewing hikes just as likely as cuts. While he stressed no one is actively calling for hikes at present, analysts noted that the threshold for future easing has risen, with the Fed wanting more confidence around tariffs and energy prices before considering cuts. Powell also warned that core inflation risks are “real”. He added that, beyond the three official dissenters, several non-voters also favored removing the easing bias but ultimately supported the decision to hold rates.

That dynamic may create challenges for incoming Chair Warsh, whose first meeting will be in June. While Warsh has advocated lower rates, he may find limited support for a more dovish stance within the current Committee. Bowman and Waller remain among the more dovish officials, though neither has backed immediate easing in the way Miran did. Note, the latest reports suggest Kevin Warsh will be sworn in as Fed Chair this Friday at a White House event. 

Additionally, Warsh has advocated for a tighter balance sheet policy. Last week, Fed Governor Barr argued that easing bank liquidity requirements to shrink the Fedʼs balance sheet would undermine financial stability and increase the Fedʼs market footprint. Barr said the 2023 banking stresses suggest liquidity requirements should rise, not fall. As such, traders will also watch the minutes for any discussion surrounding future balance sheet strategy alongside the debate over the easing bias.

Tyler Durden Wed, 05/20/2026 - 12:45

StanChart CEO Scrambles Into Damage Control After "Lower-Value Human Capital" Comment Triggers Backlash

Standard Chartered CEO Bill Winters and his team spent Wednesday in damage-control mode after the head of the London-based international bank told investors on Tuesday that artificial intelligence would be used to replace "lower-value human capital," sparking a backlash online.

"Many of you will have seen media coverage following the Investor Event in Hong Kong, particularly the reporting around automation, AI, and workforce changes," Winters wrote in an internal memo to employees on Wednesday that was seen by Bloomberg.

He continued, "I know this may be unsettling when reduced to simple headlines or a quote out of context."

The outrage stems from STAN's Tuesday announcement to cut 15% of its corporate roles (about 7,800 jobs) by 2030 as part of a broader efficiency push amid the adoption of AI.

During the investor event, Winters said, "It's not cost-cutting, it's replacing low-value human capital with financial and investment capital." The substitution of workers in favor of machines "will accelerate as we go forward into AI."

Bloomberg noted that Winters' memo sent to workers earlier today "adopted a more empathetic tone, emphasizing the bank's commitment to supporting its workforce during the transition."

That memo read, "We will continue to invest in technology, platforms, and automation to improve how we operate, serve clients and position the Bank for long-term growth. I want to be absolutely clear that the future of Standard Chartered depends on the talent, judgment, relationships, and commitment of you, our colleagues."

“It’s not cost cutting; it’s replacing in some cases lower-value human capital”

Standard Chartered CEO Bill Winters delivered a blunt message on the future of the bank’s workforce. @aishagani explains the growing trend among finance leaders acknowledging the realities of AI… pic.twitter.com/j55u4uPdZR

— Bloomberg (@business) May 19, 2026

Socialists were not thrilled with Winters' "lower-value human capital" comment:

"Angry? You should be! This is how the employer described its staff: "lower-value human capital."

Angry? You should be! This is how this employer described its staff “lower-value human capital”.

“Standard Chartered bank could cut more than 7,500 jobs as it seeks to replace "lower-value human capital" under a technology and artificial intelligence (AI) drive”.…

— Socialist Labour Party (@soclp_uk) May 20, 2026

Beyond StanChart, corporate America is losing engineers and other white-collar workers who are burdened by insurmountable student and credit card debt as AI adoption accelerates. This era will likely be remembered as the great "white-collar purge," and the response may be continued backlash toward data centers.

Earlier today, Meta began cutting 8,000 jobs, while leaked audio of CEO Mark Zuckerberg described how AI is monitoring high-skilled employees. According to X user Official Layoff, who leaked the audio: "AI is replacing the contractor. Then the employee trains the AI. Then the AI replaces the employee."

Tyler Durden Wed, 05/20/2026 - 12:25

Three Supertankers Carrying 6 Million Barrels Exit Strait Of Hormuz

Three commercial supertankers carrying a combined 6 million barrels of Middle East crude oil have successfully exited the Strait of Hormuz, according to Reuters.

The vessels departed the strategic waterway on Wednesday, after being stranded inside the Persian Gulf for over two months, lending hope to an end to the closure of the strait.

The crude cargoes were split evenly among three Very Large Crude Carriers (VLCCs) heading to Asian refining hubs. The first was Universal Winner, a South Korean-flagged supertanker carrying 2 million barrels of Kuwaiti crude oil. Shipping data on LSEG and Kpler showed that the vessel is currently en route to Ulsan, South Korea, to discharge at an SK Energy facility by June 9.

The second VLCC was Yuan Gui Yang, a Chinese-flagged vessel hauling 2 million barrels of Iraqi Basrah crude. Chartered by Unipec (the trading arm of Sinopec), the supertanker is heading toward Guangdong province with an expected arrival on June 4.

Finally there was Ocean Lily, a Hong Kong-flagged tanker loaded with 2 million barrels split evenly between Qatari al-Shaheen and Iraqi Basrah crude. Owned by Sinochem, the vessel is tracking toward Fujian province for a June 5 arrival.

Combined, the trio have about 6 million barrels of crude on board — one of the biggest oil flows in a single 24 hour period in over a month.

All three vessels switched off their digital transponders before exiting. Two have since transited the strait and were sighted near Oman while the status of the third is unclear. It also remains to be seen if they all can get past a seaparte US blockade. The supertanker heading to South Korea, the Universal Winner, is the first observed sailing by a VLCC to the Asian country since the war began.

Iran's state TV underscored that the country now appears to be in sole control over who crosses the strait and who doesn't. “Today other countries like South Korea, taking their example from the Chinese, coordinated with the IRGC navy and arranged the passage of their ships through the Strait of Hormuz,” the TV correspondent says in report from near the strait. “Coordination increased today and it’s expected to increase further tomorrow”

The correspondent said he witnessed five oil supertankers passing the strait with IRGC coordination, without giving further details

Meanwhile, following the footsteps of China and South Korea, India is preparing to send its own vessels through the Strait of Hormuz to load up energy cargoes from suppliers in the Middle East, Bloomberg reported; it would be the first time since the Iran conflict began that the country will do so.

State-owned Shipping Corp. of India is ready to go back to the Persian Gulf once it has approval from the Indian Navy and it has business from oil refiners, one of the people said. 

Shipping through Hormuz, which handles roughly a fifth of global oil flows, has been virtually halted since the Iran war began at the end of February, causing major disruptions and price shocks for countries like India, the world’s third-largest crude importer. It’s unclear whether Iran or the US, which are separately blockading the strait and surrounding waters amid the war, have given India a green light to send ships through the waterway. Their agreement will be critical for the plan to work. 

India’s External Affairs Minister Subrahmanyam Jaishankar met his Iranian counterpart Abbas Araghchi in New Delhi on the sidelines of a BRICS summit last week.

Recent White House briefings indicated potential progress toward an agreement to de-escalate hostilities, giving energy markets hope for a more permanent reopening of the chokepoint. Details on permanent enforcement or full reopening conditions remain sparse despite reports of Washington and Tehran having allegedly engaged in productive conversations via mediators, often with contradictory statements.

Few ships have so far managed to break through the Strait of Hormuz, with regional oil exports currently well below pre-war baselines.

Energy analysts emphasize that even if the conflict ends immediately, a backlog of structural damages and shuttered upstream infrastructure means market normalization will likely take three to four months and high oil prices are likely to persist.

Tyler Durden Wed, 05/20/2026 - 11:45

The AI Economy, Part 1: Looking Beyond The Facade

Authored by Michael Lebowitz via RealInvestmentAdvice.com,

The US economy’s curb appeal looks great. Consider that gasoline prices are nearly $5, crude oil is trading above $100, consumer sentiment is at historically low levels, and mortgage and other interest rates have remained relatively high. Yet, despite the worrisome headwinds, the US consumer-driven economy continues to expand. However, as with a house’s curb appeal, it’s not just the headline data that defines an economy. Equally important is its supporting structure. Let’s open the door to our economy to better appreciate how AI is currently impacting it and how it may change in the future.  

The question we explore here is whether the AI investment boom is genuinely broadening this country’s economic footing or weakening the labor force, the foundation of the economy.

We separate the article into two parts. Part one is the optimistic case: an AI-induced, productivity-led economic boom in which the benefits spread quickly to society.  Part Two will address a more bearish outlook: the possibility of a large gap in the distribution of AI’s productivity benefits, accruing to corporations much more quickly than to employees.  

AI Spending Drives GDP

The amount of capital flowing into AI infrastructure development and thus GDP is enormous. As shown in the graph below, the capital expenditures (Capex) of just four companies, Amazon, Google, Microsoft, and Meta, are now over $700 billion annually, roughly 7x what they were five years ago. Based on the 2026 Capex expectations, a third of GDP growth could come from the four companies.

The AI buildout extends well beyond the four balance sheets noted above. Every dollar of Capex spent by the large hyperscalers creates demand across a wide supply chain. For example, construction firms are building data center campuses the size of small cities, utility companies are scrambling to add generation capacity, domestic semiconductor producers are ramping up output, and fiber optic and networking suppliers have multi-year order backlogs. The electrical grid is facing its first sustained demand growth in two decades, driven almost entirely by data center power requirements, which are projected to more than double by 2030.

Historical Context

The scale of today’s AI buildout has historical precedent. For instance, the railroad expansion of the mid-1800s involved more extreme infrastructure investment, with railway Capex estimated to have consumed as much as 10-20% of GDP at its peak. A more recent and appropriate comparison is the telecom buildout of the late 1990s, when Capex peaked at roughly 1.0-1.2% of US GDP. Today’s AI infrastructure spending by just the four companies has recently surpassed that telecom figure.

But unlike the debt-fueled telecom boom, today’s AI spending has thus far been funded almost entirely by the cash and cash flows of extremely profitable corporations. While the composition of funding is shifting from cash and free cash flow to debt, the companies noted above have debt-to-equity ratios well below the S&P 500 average and significantly lower than during the telecom buildout. Moreover, earnings from other highly profitable business lines will continue to provide them with substantial cash for investment.

The Consumer Is Resilient But Running Thin

While AI spending is tremendous and boosting the economy, some argue that it is masking weaknesses in consumer spending, which is the most important contributor to economic growth.  The graph below shows that consumer spending accounts for about 67% of GDP, as it has since 2001. There has been no discernible change over the last few years since the advent of AI.

While the recent contribution of consumer spending has not changed meaningfully, its sustainability is a key factor driving future growth. While consumption is holding, there are signs that the means to spend are deteriorating. For instance, the personal savings rate has fallen to near its lowest level since 1960, as shown below. This suggests that a growing share of personal consumption is being funded by drawing down savings rather than by current earnings.

Such behavior is not unusual during periods of strong employment, as consumers spend more when they are confident about their job and wage prospects. That said, a low savings rate is a yellow flag, but it has coexisted with healthy economic expansions before.

The more important gauge of future consumption is wages, which leads us to the labor market

A Churning Labor Market

AI will swallow up jobs, some pessimists say. Thus far, that is not the case. For instance, in 2025, nearly 55,000 of 1.17 million layoffs were directly attributed to AI, according to Challenger, Gray & Christmas. Other estimates peg the number higher at 200,000–300,000 positions in 2025. While that estimate is more concerning, it is only about 0.15–0.20% of total nonfarm employment.

Looking forward, the outlook gets murky. Goldman Sachs has a dire outlook with 300 million jobs globally at risk. But that only tells half the story. The World Economic Forum (WEF) estimates that AI will create 170 million jobs globally.

There is no doubt that AI will have significant impacts on the economy, labor market, and many individuals. Prior innovations are proof. To wit, about two-thirds of US jobs in the 1940s no longer exist. The replacement jobs were enabled by new innovations.

While the future remains uncertain, the past relationship between job growth, wages, and productivity is encouraging. As we share below, PwC claims “wages are rising 2x faster in industries most vs least exposed to AI.”

Productivity Gains Will Spread

Economic growth and wage growth are a direct function of productivity. Productivity measures the amount of leverage an economy can generate from its two primary inputs, labor and capital. Without productivity, an economy is solely reliant on two limited inputs. Thus, without productivity growth, economic growth is unlikely over the long run.

Therefore, it’s critical to discuss how much productivity AI will generate and how it will be distributed.  The first part, how much, is nearly impossible to assess today. That said, PwC estimates that productivity growth has nearly quadrupled in AI-exposed industries since 2022. Further:

Is AI really the cause of this surge in productivity? We can’t prove causation with certainty, but we do know that revenue growth in AI-exposed industries accelerated sharply in 2022, the year that the launch of ChatGPT 3.5 awakened the world to AI’s power. Since then, as companies have raced to leverage this technology, the value created in industries best positioned to use AI has skyrocketed. In the space of two years, industries most able to use AI have changed from productivity laggards to leaders, suggesting that investments in AI are paying off. AI’s promise is proving to be real, and we are only in the early days of AI adoption.  

Regarding the distribution of productivity, some pessimists argue that AI’s productivity gains are flowing overwhelmingly to high-income knowledge workers. While that is currently true, that has also been the case with every major technology wave in its early phase. Factory automation initially benefited capital owners. Personal computers initially benefited white-collar workers. The internet initially benefited the educated and connected. But over time, prices fall, adoption rates grow, and the benefits spread across the entire workforce.

History’s verdict is consistent: the benefits start narrow and ultimately spread wide across the economy. As we share in the graphic below, as a result of the US being a global leader in innovation, our poorest states, Mississippi, West Virginia, and Arkansas, have a similar or higher GDP per capita than other large nations.

Summary

While still early in the AI revolution, the economic data points to genuine economic momentum. Whether AI productivity benefits can become more broadly based across the economy is the question that Part Two of this article addresses.

Before we present the other side, we will leave you with a PwC table that addresses concerns about productivity and the labor market.

Tyler Durden Wed, 05/20/2026 - 11:25

Judge Blocks ICE Agents From Conducting Arrests At Immigration Courts In New York

Authored by Aldgra Fredly via The Epoch Times (emphasis ours),

A federal judge issued a ruling on May 18 barring federal agents from conducting arrests at three Manhattan immigration courts, except in limited circumstances.

A federal officer stands by in a hallway at New York Federal Plaza Immigration Court inside the Jacob K. Javitz Federal Building in New York on October 1, 2025. Charly Triballeau / AFP via Getty Images

The ruling by U.S. District Judge P. Kevin Castel stemmed from a lawsuit filed by the New York Civil Liberties Union and other groups on behalf of The Door and African Communities Together, which sought to challenge U.S. Immigration and Customs Enforcement (ICE) policies that allow federal agents to arrest people in immigration courts.

Castel had initially declined to block the policy last September, but the plaintiffs later filed a motion in response to a March letter in which the government admitted that the 2025 ICE guidance—which it had relied on to justify arrests at immigration courts following the lawsuit—“does not and has never applied” to civil immigration enforcement actions at immigration courts.

In a 15-page ruling on May 18, Castel granted the plaintiffs’ request to stay the ICE policy, barring federal agents from arresting people at three Manhattan immigration courts—26 Federal Plaza, 201 Varick Street, and 290 Broadway—except under “certain enumerated circumstances.”

“There is a strong governmental interest in enforcing immigration laws. There is also a serious interest of The Door to be free to assist its members in defending removal proceedings brought against them and pursuing defensive asylum applications before an [immigration judge] without fear of arrest,” Castel stated.

The judge added that ICE agents are only allowed to make arrests at immigration courts when there are “serious threats of physical harm to public safety.”

Castel also said the government’s concession that the 2025 policies did not apply to immigration courts warranted reexamining his previous ruling “to correct a clear error and prevent a manifest injustice.”

In a March 24 letter addressed to Castel, government lawyers expressed regret over a “material mistaken statement of fact” presented to the court and said it was caused by “agency attorney error.”

“This error, however, was not caused by a lack of diligence and care by the undersigned attorneys. The undersigned were specifically informed by ICE that the 2025 ICE Guidance applied to immigration courthouse arrests,” the letter states.

Amy Belsher, director of Immigrants’ Rights Litigation at the New York Civil Liberties Union, called the latest ruling “an enormous win for noncitizen New Yorkers seeking to safely attend their immigration court proceedings.”

“We look forward to a final ruling in the case that sets aside these cruel, pointless policies once and for all,” Belsher said in a May 18 statement.

The Epoch Times reached out to the U.S. Department of Homeland Security, which oversees ICE, for comment, but did not receive a response by publication time.

Tyler Durden Wed, 05/20/2026 - 10:45

Oil Prices Extend Decline After The Largest Crude Inventory Drawdown In History, Cushing 'Tank Bottoms' Loom

Oil futures are down bigly this morning following comments from President Trump that the war in Iran would be ended "very quickly," but investors remained uncertain about the potential for de-escalation.

"We're going to end that war very quickly. They want to make a deal so badly, they're tired of - this should have happened for 47 years," Trump told a group of Congress members at the White House's annual congressional picnic on Tuesday.

"Somebody should have done something about it. And it's going to happen, and it's going to happen fast. And you're going to see oil prices plummet," the president added.

Oil's declines were also reportedly driven by this optimism about a final deal draft peace agreement:

On Tuesday, two Chinese tankers carrying crude oil traversed the Strait of Hormuz.

Another, a South Korean vessel, was passing through it, according to a Reuters report. Jim Reid, of Deutsche Bank, noted that this marks "one of the busiest days since the closure."

However, Iran's Revolutionary Guards also warned on Wednesday that any renewed strikes on Iran could expand the war beyond the region.

The IRGC also said it had not used all its capacities against the U.S. and Israel, while warning that their "devastating blows will crush" the adversaries, the IRGC said in a statement on its Sepah News website.

For now, all eyes are on the official inventory and supply data (and SPR) after yuuuge draws reported by API overnight...

API

• Crude -9.1mm (-3.4mm exp)

• Cushing -1.4mm

• Gasoline -5.8mm

• Distillates -1.0mm

DOE

• Crude -7.863mm (-6.0mm exp)

• Cushing -1.604mm

• Gasoline -1.548mm

• Distillates +372k

Crude stocks tumbled last week (biggest draw since Feb 13th) for the fourth week in a row. Gsoline inventories saw their 14th weekly drawdown in a row whil distillates saw another small build...

Source: Bloomberg

Strategic Petroleum Reserve drawdowns continue to accelerate with 9.92mm barrels/day - a record - drained last week. That means over 10% of the SPR has been drained in the last few weeks...

Source: Bloomberg

Total US crude stocks including the SPR are at the lowest level since June 2025 with this week seeing the largest SPR + Commercial stock drawdown in history...

Gasoline stockpiles continued their steady decline last week, falling another 1.5 million barrels. Stocks are still at the lowest seasonal levels since 2014.

Cushing stocks are rapidly approaching 'tank bottoms' once again...

US Crude production dipped very modestly last week...

Source: Bloomberg

WTI (July 2026) suddenly plunged below $100 just ahead of the official data (on peace deal optimism) and extended the losses after the big draw...

Finally, though the closure of the Strait has already pushed oil prices up by more than half, analytics firm Woods Mackenzie said if the war is extended until the end of the year, oil prices could rise as high as US$200 per barrel, though a quick settlement could lower Brent prices to US$80 by year end.

"The Strait of Hormuz is the most critical chokepoint in global energy markets, and a prolonged closure would become far more than an energy crisis," said Peter Martin, head of economics at Wood Mackenzie.

"The longer disruption persists, the greater the impact on energy prices, industrial activity, trade flows and global economic growth."

The market is awaiting the start of the high-demand U.S. summer driving season, which begins with this weekend's Memorial Day holiday.

It appears that American drivers will face the highest gas prices ever for Memorial Day...

...not great for Midterms/Approval ratings.

Tyler Durden Wed, 05/20/2026 - 10:38

Samsung Union Postpones Massive General Strike, Puts Wage Deal To Vote

Summary:

• Samsung Union Postpones Massive Strike For Union Vote On Saturday

• Samsung Union Authorizes Massive Strike At Memory-Chip Plants After Mediation Talks Collapse  

Samsung Union Postpones General Strike For Weekend Vote 

Late Wednesday night in South Korea, Samsung and its largest union held last-minute negotiations ahead of a massive general strike.

Vice Minister Kwon Chang-jun of the Ministry of Employment and Labor joined the negotiating table between Samsung and its largest union, a move that appears to have led to a breakthrough.

South Korea's national wire service, Yonhap, reports that the union has postponed plans for a strike tomorrow and will put a tentative wage deal to a vote. 

"We will postpone the general strike scheduled for May 21-June 7 until further notice," Samsung and the union wrote in a joint press release. 

The vote on the tentative wage deal begins on Saturday.

Earlier, the union pressed forward with plans for a general strike at Samsung chip fabs due to the company negotiators' inability to scrap an existing bonus cap, allocate 15% of operating profit to worker bonuses, and formalize these new demands in a wage contract.

Samsung had previously proposed allocating 10% of operating profit to bonuses, along with a one-time special compensation package for workers that is well above industry standards.

Samsung executives argued that the union's demands would be challenging to sustain in the coming years. 

Why the union is striking...

Crisis averted? Well, all eyes are on the weekend vote.

Samsung Union Authorizes Massive Strike At Memory-Chip Plants After Mediation Talks Collapse  

Asian equities extended losses for a fourth straight session, with South Korea's benchmark KOSPI falling about 1% as the market priced in the shock of an imminent labor action at Samsung Electronics.

A full-scale, 18-day strike involving more than 47,000 workers at the world's largest memory-chip maker is set to begin Thursday, raising the risk of production disruptions across the global semiconductor supply chain, which is already tight due to AI data center buildouts.

Samsung Electronics' talks with its largest union collapsed overnight as union negotiators demanded the removal of a bonus cap, allocation of 15% of operating profit to worker bonuses, and that those terms be written into contracts, citing memory-chip maker SK Hynix's 10% profit-sharing arrangement.

Samsung negotiators accepted most of the demands, including a proposed 10% operating profit bonus pool and special compensation, but called the union's remaining requests unsustainable.

"We deeply regret that the post-mediation process has concluded [without resolution] due to delays in decision-making by the management," Samsung Electronics Labor Union Chairman Choi Seung-ho told reporters at the National Labor Relations Commission in the city of Sejong. "We cannot help but feel disappointed that the mediation ended without the company ultimately reaching a decision."

Japan's financial outlet Nikkei Asia reported, "The strike would affect only the company's domestic plants, which are the base of its chipmaking operations." 

The collapse in talks comes as Samsung shares surge on record profits, driven by soaring demand for memory chips, even as hyperscalers are set to deploy $700 billion in capex to build AI infrastructure in the US. Demand is also rising globally as the race for AI compute intensifies.

TrendForce data show that Samsung is the world's largest memory chipmaker, with a 36% market share in DRAM chips and one-third in NAND Flash chips.

Commenting on the market reaction, UBS analyst Joe Dickinson noted:

"Asia was lower for a fourth consecutive session, with the KOSPI dropping as much as 3% on Samsung strike risk before partially recovering."

UBS analyst Kevin Loke commented on the FX reaction:

USDKRW initially traded with an offered tone, with spot opening at 1513.4 and falling nearly 10 won to a low of 1503.8. However, headlines that the Samsung union strike will proceed as planned on Thursday, following a breakdown in talks, pushed the pair back higher toward 1510.

A BoK report to the president estimated a potential impact of up to KRW30 trillion in lost production. For now, USDKRW is likely to remain within a broader 1480–1520 range, with the pair relatively less sensitive to the recent thematic shift toward the global bond sell-off.

Samsung shares fell as much as 4.4% before reversing their losses. Notice "Samsung Strike" headlines in corporate media weighing on shares...

Coverage:

• Samsung Strike Threat Sparks Selling Contagion In Memory Stocks

• Samsung, South Korean Union Resume Talks As Strike Threat Risks Disrupting Memory Chip Fabs

• Samsung, Union Resume Talks After Labor Action Scare; Goldman Says "Korea: Buy"

Bloomberg pointed out, "The government has previously hinted that it could resort to rarely used emergency powers to prevent a strike if the parties fail to reach an agreement. South Korea has invoked the emergency arbitration mechanism only four times since 1969."

Tyler Durden Wed, 05/20/2026 - 10:08

Xi Warns US Against New Iran Strikes, Denounces 'Law Of The Jungle', As Putin Talks Energy Leverage In Beijing Summit

Chinese President Xi Jinping hosted Russian President Vladimir Putin for a high-stakes summit on Wednesday, just days after wrapping up closely watched talks with Trump, which by all accounts failed to produce any Washington-Beijing breakthroughs.

The optics were carefully engineered, and many international outlets observed Putin's state welcome was no less lavish and opulent than Trump's own, with the Russian leader entering Great Hall of the People with full military pomp, children waving flags, and the standard marching band - again, strikingly similar to the red-carpet treatment rolled out for Trump last week.

For example, Al Jazeera writes that "We were expecting a more low-key ceremony, but he actually received an identical welcome treatment as Trump last week." And more:

He had the red carpet rolled out for him; he received a 21-gun salute, as well as children waving Russian and Chinese flags, saying, ‘We warmly welcome you.’

The only difference is who greeted Putin at the airport. With Trump, it was Han Zheng, the vice president, and for Putin, it was Wang Yi, the foreign minister.

via Sputnik

President Xi in his opening remarks delivered a sharp critique of the current geopolitical landscape, warning that the world is at risk of regressing into the "law of the jungle" -  but hailed the Beijing-Moscow alliance as a crucial stabilizing force against what he later termed "all unilateral bullying" in the international arena, which appeared a passing jab at the United States. The very timing of the Putin summit has widely been viewed as a display of leverage.

Among key moments is that Xi called for "a comprehensive ceasefire" in the Middle East and the immediate reopening of the Strait of Hormuz. He characterized the standoff situation in the Persian Gulf as a "critical juncture between war and peace." Xi called for the "unimpeded flow" of crude transit through the strait, as it is in "the common interest of the international community."

"My four-point proposal for maintaining and promoting peace and stability in the Middle East aims to further build international consensus and contribute to easing tensions, deescalating conflict, and promoting peace," Xi said on the Iran crisis according to state news outlet Xinhua. Noticeably absent, however, was mention of finding peace in Ukraine. They agreed that it was "necessary to address the root causes of the Ukrainian crisis."

As for Iran, Xi also explicitly noted that further hostilities in the Middle East were "inadvisable" and that a "comprehensive ceasefire is of utmost urgency." Putin during the summit sought to assure Beijing that Moscow remains a "reliable energy supplier" amid global oil supply shocks, noting their bilateral relationship sits at an"unprecedentedly high level."

He even at one point invoked a classical Chinese proverb to describe his relationship with Xi: "Even if we haven’t seen each other for a day, it feels like three autumns have passed."

Xi Jinping welcomed Putin at Tiananmen Square

The leaders of Russia and China have concluded their talks in Beijing. The two sides signed around 40 bilateral agreements on cooperation in various spheres.

However, the future of the Power of Siberia 2 gas pipeline remains… pic.twitter.com/mnvLmYkwDi

— Visegrád 24 (@visegrad24) May 20, 2026

Below are some quick highlights based on some emerging reporting Wednesday:

Treaty Extension: The signing of a wave of bilateral agreements across technology, trade, and intellectual property, anchored by the extension of the 25-year-old "China-Russia treaty of good neighborliness and friendly cooperation."

The Energy Lifeline: Putin countered by assuring Beijing that Moscow remains a "reliable energy supplier" amid global oil supply shocks, noting their bilateral relationship sits at an "unprecedentedly high level."

The Crude Lifeline: China remains critical in terms of an outside Russian economic lifeline, purchasing nearly 50% of Moscow's total oil exports as Western sanctions continue to squeeze Russia's domestic capital.

On potentially reviving a major stalled Russian gas pipeline project, CNBC wrote:

Russian President Vladimir Putin met with Chinese leader Xi Jinping in Beijing on Wednesday, with the long-stalled Power of Siberia 2 natural gas pipeline on the agenda, as the Iran war disrupts energy supplies.

Kremlin foreign policy aide Yuri Ushakov said Tuesday that the project “will be discussed in great detail between the leaders.”

The planned 2,600-kilometer pipeline would carry 50 billion cubic meters of gas annually from Russia’s Yamal fields to China via Mongolia. Moscow and Beijing signed a legally binding memorandum to advance construction in September 2025, but pricing, financing terms, and a delivery timeline remain unresolved.

Later this year, in November, both Presidents Trump and Putin could attend the APEC summit (Asia-Pacific Economic Cooperation) on Chinese soil. 

via Bloomberg

The White House website hints at APEC summit attendance: "President Trump and President Xi agreed that the United States and China should build a constructive relationship of strategic stability on the basis of fairness and reciprocity. President Trump will welcome President Xi for a visit to Washington this fall. The two countries will support each other as the respective hosts of the G20 and APEC Summits later this year."

In the context of the Iran conflict Trump has lifted some oil sanctions on Russia, making its oil trade a key beneficiary of the US-Israel initiated war. "Russia has emerged as a primary beneficiary of the Middle East conflict due to the massive supply vacuum created by the closure of the Strait of Hormuz," George Voloshin, an independent energy analyst based in Paris, has commented. "Global refiners are desperate for alternative medium-sour crudes, a need that Russia’s Urals grade specifically meets."

Tyler Durden Wed, 05/20/2026 - 10:05

The Building Blocks Of A Global Stagflationary Shock Are Falling Into Place

By Peter de Groot, Head of Macro Strategy at Rabobank

The Inflation Regime That Doesn't Fade

As we noted at the outset of the Gulf conflict, history rarely repeats – but it often rhymes. The closure of the Strait of Hormuz is increasingly revealing a familiar pattern: the building blocks of a global stagflationary shock are falling into place.

A closer look across inflation indicators in advanced economies shows a clear and consistent structure. The upstream impact has been immediate and forceful – exactly as expected in an energy-driven shock. The surge in oil and gas prices has translated into sharp increases in petroleum products such as diesel, and into key industrial inputs like sulphur and fertilisers. Producer price expectations – particularly in energy-intensive sectors such as chemicals, base metals, and wood – have risen rapidly, in many cases outpacing the (initial) post-Covid surge. European industrial surveys point to strong repricing at the start of the production chain.

But further downstream, the picture is more nuanced, for now. While higher input costs are being passed through, the degree of transmission appears more muted than during the inflation surge of 2021–2022. Initial producer price data suggest that firms are adjusting prices, but not with the same breadth or intensity yet. Part of this may be timing – pass-through is always gradual – and whilst the gap between sharply rising price expectations and more modest realized price increases is notable, this could also point to more significant price hikes in the months ahead.

At the consumer level, the divergence is clearer. Inflation has responded, but the impulse remains concentrated in energy and energy-related components. Headline CPI prints have broadly matched expectations, and in some cases even surprised to the downside. Core inflation has remained contained. However, the same sort of slow transmission was seen during the initial phase of the 2021-2022 inflation surge, which, arguably, led policy makers to respond too slowly. So it’s too early to draw any firm conclusions and ‘transitory’ cannot be one of them, for now.

However, there is one crucial difference: the starting point for this shock is materially weaker demand. Labor markets have cooled in many places, albeit not to the same degree. US payrolls growth and job openings have slowed. In the Eurozone, labor market tightness indicators have eased (even as unemployment has stayed at cyclical lows). In the UK, unemployment has moved back to around 5%, vacancies have dropped to a five-year low, and wage growth continues to slow. As Stefan Koopman, our UK analyst, notes, these are not the conditions of an overheated economy requiring aggressive monetary tightening. Instead, they suggest increasing slack – an environment in which firms may struggle to fully pass on higher costs without sacrificing demand.

As a result, while energy prices are likely to push inflation higher in the coming months, the broader macro backdrop does not appear conducive to a sustained second-round inflation spiral. That said, central banks may still feel compelled to respond – more as a signal than out of necessity. In the UK, for instance, a symbolic rate hike cannot be ruled out, as policymakers seek to underscore their commitment to the inflation target, even if the case for a full tightening cycle remains weak.

Policy choices will be critical in shaping the trajectory from here. One of the defining lessons from the 2021–22 inflation episode is that policy responses can amplify shocks. The combination of large-scale fiscal support and ultra-loose monetary policy played a key role in transforming an initial supply shock into a broad-based and persistent inflation surge. Today, the policy environment is different – rates are higher, fiscal space is more constrained – but the uncertainty surrounding the duration of the Hormuz disruption complicates the outlook.

In that context, policymakers may be inclined to assume persistence rather than transience, if only as a precaution. Markets, for their part, have already moved in that direction. Bond yields have repriced sharply higher, particularly at the long end, tightening financial conditions globally. The US 10-year yield rose above 4.67% yesterday, the highest level since mid-January 2025. And although European yields were dragged higher as well, the spread of 10y Treasuries over German bunds has widened from 120bp on 13 April to nearly 150bp yesterday. The rise in US Treasury yields – alongside a widening spread over German Bunds – signals that investors are increasingly focused on both inflation persistence and fiscal sustainability.

This shift in market discipline is not going unnoticed. The IMF has urged Britain to “stay the [fiscal] course” in its ‘Article IV’ consultation. At this week’s G7 meeting, finance ministers and central bankers struck a notably cautious tone, emphasising that any policy support should remain temporary, targeted, and fiscally responsible. Compared to the sweeping interventions seen in recent crises, the response so far has been measured – arguably deliberately so.

Yet this restraint also exposes a tension. While targeted domestic support is relatively straightforward, meaningful international coordination is far more challenging. Countries face competing objectives: protecting domestic growth, ensuring economic security, and enhancing resilience. Measures such as export restrictions may serve national interests but risk undermining collective outcomes. In that sense, the G7’s commitment to cooperation may prove difficult to translate into concrete action.

This suggests a risk of fragile stagflation, with slowing growth alongside persistent inflation. The main danger is not runaway prices but policy errors and poor coordination amid ongoing geopolitical pressures. Much depends on the duration of the Hormuz disruption, as supply shocks may last longer than expected and blur the line between temporary and persistent inflation.

This may also be the reason why we see tentative signs that policymakers are beginning to look beyond purely economic tools. The economic consequences of the Hormuz closure are, after all, rooted in a geopolitical disruption. Discussions within NATO about potentially facilitating maritime passage through the strait underscore a growing recognition that resolving the supply shock itself may be the most effective form of policy response. Although there is no unanimous support yet, according to sources, as per Bloomberg reporting, the fact that NATO is reconsidering an (active) role was seen by investors as a positive development.

Meanwhile, after months of wrangling, the EU finalized the text on the US-EU trade deal, to be signed off by European Parliament and member states before Trump’s 4 July deadline. Reaching a compromise was driven by the overriding objective of “maintaining a stable, predictable and balanced transatlantic partnership”, as put by Cyprus’ minister of commerce. However, the text now includes a 2029 expiration date (unless both sides agree extension). It also includes a clause that would allow the Commission to suspend the deal if tariffs on products using steel and aluminium surpass 15% after 2026 and a ‘pause button’ should the US not keep with its commitments. So let’s see if the US wants to cooperate.

Tyler Durden Wed, 05/20/2026 - 09:50

AI Purge Accelerates: Intuit Reportedly Slashing 17% Of Workforce

Intuit, the company that owns TurboTax, QuickBooks, Credit Karma, and Mailchimp, is reportedly preparing to lay off a staggering 17% of its workforce according to Reuters, which cites an internal memo.

INTUIT TO LAY OFF 17% OF WORKFORCE: MEMO

Initial claims about to print new record low

— zerohedge (@zerohedge) May 20, 2026

Details are scant at the moment regarding the reason for the layoffs, but CEO Sasan Goodarzi sent an email to staff earlier in the day, saying that reducing complexity and simplifying the structure would help it deliver better ​products, to streamline operations and sharpen focus ​on its key bets including its AI efforts.

The company has signed multi-year deals with AI startups Anthropic and ​OpenAI to integrate their AI models into its software and add Intuit's personalized tax, finance, ‌accounting and ⁠marketing capabilities into Claude and ChatGPT.

Bloomberg data shows Intuit's total workforce was around 18,200 in mid-2025. If those figures are still accurate, the layoffs could affect upwards of 3,000 employees.

As of Tuesday's close, Intuit shares were down nearly 40% on the year amid AI fears disrupting the software stocks.

Shares are down 2% in premarket trading.

Analysts are mostly bullish…

Related:

• Meta Axes 8,000 Workers As Zuckerberg Admits AI Is Watching, Replacing Labor

The last day for impacted staff at Intuit in the United States will be July 31 and they will receive 16 weeks of base pay and two extra weeks for every year at Intuit as part of ​the severance package, the ​memo on Wednesday ⁠showed.

Tyler Durden Wed, 05/20/2026 - 09:35