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🌎 The Big Picture

It was a pretty tame week, but there were some interesting trends.

The market slumped for a third straight day on Thursday as the positive momentum started fading. Most of the confidence fueling the stock market rally of the past few months has centered around enthusiasm for the AI boom and the Fed shifting toward a more stimulative policy stance.

The hype around the big AI deal announced on Monday between ChatGPT-owner OpenAI and the world's dominant AI chipmaker and most valuable company, Nvidia, started to fade into concerns about a bubble. More questions surfaced about whether the billions being poured into AI will be profitable or even sustainable for much longer if the chipmaker is the only one left willing to fund the software developer so that they can afford to purchase their chips.

Also, better economic data this week has cast doubt on the Fed's need to step in to support growth with lower borrowing costs. The job market is stabilizing, and mortgage costs are falling, giving some relief to buyers and borrowers.

Without confidence in the stimulus from AI and policymakers, the market needs different fuel to push for new record highs.

Biggest thing for the economy this week? The government is in for another steep round of cutbacks and a new kind of shutdown.

Thousands of government workers could face termination again. The White House has told federal agencies to prepare for mass layoffs if Congress does not pass its annual budget funding bill by the end of the month, raising the stakes for government workers and anyone relying on federal programs. Each year, the government must pass its annual budget to allocate spending for various services and departments by October 1st. If they fail to come to an agreement in time, Congress typically passes a continuing resolution to delay the deadline, but sometimes the government shuts down.

The administration's new plan to permanently eliminate jobs during a shutdown is a significant shift from the usual budget shutdown process, where non-essential employees are temporarily furloughed with the expectation of returning to work later with back pay. According to recent reporting, the Office of Management and Budget (OMB) has instructed agencies to draft plans for job cuts in programs not aligned with the President's priorities. Families, homeowners, and business owners could all be affected by lags in processing government contract payments, delays in regulatory decisions, disrupted economic data reporting, or potential interruptions in health or financial support benefits.

We’re witnessing a fundamental deconstruction of how the United States has worked for the past several decades. Stay tuned for next week’s episode of Life in America.

Get the full breakdown of all the trends affecting your home, wallet, and career in the new Weekend Scoop on the Scoops app!

🏭 The Companies Everyone’s Talking About

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❔ The Big Question of the Week

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