Breakfast News: The Fed's Inflation Fight

Breakfast News: The Fed's Inflation Fight

1. Inflation Leads Federal Reserve Decision

Stock futures edged up Sunday, after the S&P 500 fell back Friday to end with a 0.3% gain over the week – still within 1% of its all-time record. The Nasdaq ended the week 1.1% ahead, as investors shift focus to this week's inflation updates following poor August employment data.

• "Tariffs are not the only challenge to the Fed finishing its fight against inflation": A Wells Fargo (WFC 1.01%) note pointed to services inflation clouding the picture, with Wednesday's producer price index (PPI) and Thursday's consumer price index (CPI) prints set to give us the latest on wholesale and retail inflation respectively. CPI is expected to reach 2.9% year over year in August, up from 2.7% last month.
• "It is possible that the job market is much weaker than the Federal Reserve is aware of": Tom Hulick of Strategy Asset Managers points to pressure on the Fed's next meeting on September 16-17, as the CME FedWatch Tool has moved to a 100% chance of a cut – with 10% predicting a larger 50-basis points fall.

2. Key Earnings This Week

Casey's General Stores (CASY 2.99%) will post first-quarter earnings for fiscal 2026 after market close today. The convenience store giant beat top- and bottom-line estimates in Q4 2024, though partly powered by acquisitions. Watch for updates on the company's targets for a combination of same-store sales growth, new store openings, and M&A in 2026.

• Superscore of 74 in our Moneyball Database: Tuesday will bring Q3 earnings from Synopsys (SNPS 13.35%). The computer chip design software specialist has faced uncertainties related to trade with China this year, but has beaten earnings estimates in each of the past four quarters. Other tech stock reports include a Q1 update from Oracle (ORCL -6.33%) the same day, with a Q3 report from Adobe (ADBE 0.24%) Thursday.
• "We remain bullish on CHWY's product improvements, execution, and marketing": JPMorgan (JPM 1.65%) analyst Doug Anmuth is upbeat on online pet products retailer Chewy (CHWY 2.54%), which will report Q2 Wednesday – after the company saw net customer numbers grow nearly 800,000 year over year in Q1.

3. ASML Backs Europe's Top AI Startup

ASML Holding (ASML 1.36%) will become the biggest shareholder in French AI start-up Mistral AI, according to Reuters. The report says the Netherlands-based advanced semiconductor equipment maker has committed $1.5 billion of Mistral's latest $2 billion funding, to make it the biggest AI company in Europe with a valuation possibly as high as $14 billion.

• European AI independence: A cash injection from ASML should help strengthen Europe's aim to become less reliant on AI technology from the U.S. and China, the report's sources say, with Mistral competing against OpenAI and Alphabet's (GOOG 0.56%) Google.
• "Democratising artificial intelligence through open-source, efficient, and innovative AI models": The company's stated mission is up against growing competition, including Anthropic, whose recent fundraise valued it at $183 billion.

4. Alibaba Buys into Robots

Bloomberg reports Alibaba (BABA 8.08%) is one of the lead investors, via its Cloud division, in a new $140 million funding for Chinese robotics start-up X Square Robot. Other major investors include investment holding company Meituan.

• "We need robots to operate and complete complex tasks autonomously": X Square COO Yang Qian said the deal brings total investment to $280 million, adding the company is already generating revenue and plans for an IPO next year – though it hasn't decided where it will list.
• "Open-source foundation model for embodied AI": The company, which uses Nvidia (NVDA) chips for its computing needs, also revealed its Wall-OSS AI model, as Yang said robotic AI is still behind generative AI technology.

5. Your Take

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