Global stocks rise as peace talks with Iran resume, but uncertainty looms over potential Fed interest rate hikes.
Washington DC, United States Jul 27, 2026 ALN: ➡️ Did someone forward you this email? If you would like to receive this information directly, every morning before the markets open in New York, here.
In mid-July, online sleuths who obsessively track the internet for signs of new AI models started to whisper about the latest offering from Moonshot AI, the Beijing-based artificial intelligence startup behind the Kimi large language model: Something big was coming. Moonshot AI’s latest model didn’t just live up to the hype—it raised the stakes, as reported by Nicholas Gordon.
On July 16, Moonshot debuted Kimi K3, the largest open-source model ever released, and promised it could perform close to the level of Anthropic’s Fable 5—perhaps the most powerful publicly available model on the market today—at a fraction of the cost.
Kimi K3 blew up the timeline: Chinese AI is now cheap enough and good enough that even U.S. startups and 500 companies are quietly plugging the models into their operations to rein in spiraling AI budgets. It’s a remarkable closing of the gap that China achieved despite Washington imposing export controls to choke off China’s access to the world’s most advanced chips.
Shares in chipmaker CXMT soared on their stock market debut in China today, closing up 465.82% and—at $484 billion—briefly making the company the largest by market cap in China. CXMT competes with Micron, SK Hynix, and Samsung, and is a supplier to Apple.
As stocks climb ever higher, bullish sentiment declines. This chart from Bespoke Investment Group shows “bullish sentiment among individual investors … hit its lowest level of the year this week, dropping 15.3 percentage points down to just 29.6% for the biggest weekly drop since 2021.”
The CME Fedwatch index shows that interest rate traders have become far less sure that U.S. Federal Reserve chair Kevin Warsh will keep rates on hold when the FOMC meets on Wednesday. Back in May, speculators thought there was a 99% certainty that the base interest rate would stay at the 3.5% level. Today, only 62% think that. Moreover, 33% think it will move up.
Jessica Rindels at Goldman Sachs counted five members of the FOMC who have made remarks suggesting they are prepared to raise rates since the last meeting, in a note dated July 24. “Our base case is that the Fed will stay on hold at 3.5-3.75% in July. But the spike in oil prices has made it a close call,” Bank of America’s Aditya Bhave said in an email. “Chair Warsh faces a difficult choice. Not hiking could challenge the Fed's credibility on inflation. But raising rates would go against his framework of looking through supply shocks. We think July is Warsh's call as he has enough votes either way. He has strategic incentives to hike soon.”
The U.S. suspended its attacks on Iran for a second straight night to give peace talks a chance, according to U.S. Ambassador to the UN Mike Waltz. He denied that it was because the U.S. is running down its missile stocks. Iran has also paused its strikes.
The talks are focused on whether Iran is willing to permit a certain number of ships to transit the Strait of Hormuz via the southern route close to Oman, which is controlled by the U.S. Navy.
There is a “debate” inside the White House about how many missiles the U.S. has left and when they should be used, the WSJ reports.
AI is not creating new tech jobs, according to data from Oxford Economics, and in fact employment in the tech sector has declined as a share of the total job market in some countries where AI’s contribution to the economy has increased. The data comes with caveats: It only reflects what is happening in selected Asian countries, such as Taiwan and Singapore, where tech jobs make up no more than 8% of total jobs.
Nonetheless, “The high-tech employment share has remained broadly unchanged across most Asian economies since the AI boom started and has declined in countries where its contribution to the economy has increased, such as Malaysia and Singapore. This suggests higher production has been met primarily through rising capital inputs and productivity gains rather than additional hiring,” analyst Alexandra Hermann Prasad said in a note.
Members of Gen-Z think they will need a salary approaching $700,000 and a net worth near $10 million to experience “financial success,” according to this chart from Deutsche Bank.
“Some theories suggest the ease of ‘aspirational connections’ and ‘dream scrolling’ on social media has fueled sky-high expectations for Gen-Z. In fact, one survey shows that Gen-Z thinks they need twice as much wealth and triple the annual salary as the previous generation to achieve ‘financial success’,” analysts Luke Templeman and Galina Pozdnyakova said in a recent paper.
Note the column on the far right—which reflects reality:
Meet the woman who stands to inherit $10 million.
To learn more about the latest developments in Economy, stay updated with our exclusive reports and analyses on AiLensNews.
