Stocks and bonds moved in opposite directions Monday, with the S&P 500 dipping while AI-related shares surged. Meta climbed 6% Friday after revealing it will start producing its own AI chips, called Iris, by September, shifting from heavy spending to potential profitability. NVIDIA launched its DSX AI Factory program, which splits cloud infrastructure revenue with partners, marking the sector’s move from growth-at-any-cost to margin focus.

Bonds, however, reflected inflation concerns. The 10-year Treasury yield held at 4.54%, near multi-month highs, as traders awaited Tuesday’s CPI data. Economists expect core inflation to ease to 2.8% year-over-year, but after June’s surprise uptick, futures markets are betting on limited Fed rate cuts. A core CPI reading above 3% could push the 10-year yield toward 4.75%, lifting borrowing costs for homes, cars, and credit cards.

The S&P 500 ended Friday at 7,575 (+0.42% for the day, +1.23% for the week), but gains stayed focused on AI exposure. Meta (+6%) and NVIDIA (+4%) drove Nasdaq outperformance, while the Russell 2000 small-cap index fell 0.49%.

The 10-year Treasury yield stayed at 4.54%, close to November 2023 highs, as traders reassessed Fed policy. Tomorrow’s CPI report is pivotal: A 2.8% core reading could spark a bond rally on rate-cut hopes, but an upside surprise, especially with Brent crude at $77.50, may drive yields toward 4.75%.

Brent crude rose nearly 5% to $77.50 a barrel. and WTI reached $72.80, both up about 6% on the week as the Strait of Hormuz stayed blocked. The broader impact: shipping costs for containerized goods increased, with electronics, agricultural products, and manufactured items facing multi-week delays as ships reroute around the Cape of Good Hope.

Bitcoin dipped 1.1% to $63,000, but the sector’s milestone came via Circle’s USDC stablecoin, which became the first federally chartered crypto bank. The move brings stablecoins under U.S. banking oversight, speeding up institutional adoption. BlackRock’s tokenized funds now hold $2.9 billion on-chain, while Ethereum’s real-world asset market has grown to $34.5 billion.

The U.S. Dollar Index (DXY) traded at 100.91, slightly lower on the day but up 1.3% for July as Middle East tensions and Fed uncertainty supported demand.

Weekend U.S.-Iran airstrikes led Tehran to block outbound traffic through the Strait of Hormuz, disrupting 20% of global oil flows and 19% of LNG shipments, along with key container routes. With the strait now closed for 135 of the past 180 days, multinational firms are treating Middle East supply chains as unpredictable long-term.

China now produces 11,000 metric tons of foie gras annually, more than France, at half the cost. On trade, Beijing is cutting car production to reduce expenses amid tariffs and rising competition. Meanwhile, Washington is tightening export controls on semiconductor equipment for foreign-owned chip plants in China.

Apollo Global Management offered $7.6 billion to buy easyJet, the budget airline struggling with high fuel costs, staff shortages, and uneven post-pandemic travel demand.

Pakistan and the United States made “significant progress” toward a reciprocal trade deal, according to Pakistan’s commerce minister. An agreement could boost Pakistan’s textile and farm exports while giving the U.S. better access to its 240 million consumers.

Meta will start producing its custom AI processor, codenamed Iris, in September, reducing reliance on NVIDIA and AMD while leasing excess compute power to outside firms. The company’s 2026 capital spending is forecast at $125-145 billion.

NVIDIA’s DSX AI Factory program shares infrastructure revenue with cloud providers. Early partners include Sharon AI (40,000 GPUs) and Firmus Supercloud (170,000 GPUs in Indonesia).

The Office of the Comptroller of the Currency approved Circle National Trust, giving USDC operations a federal banking charter. The move subjects stablecoins to the same rules as traditional banks, but with digital efficiency and global scale.

South Korean chipmaker SK Hynix raised $26.5 billion in the largest U.S. American Depositary Receipt (ADR) offering ever. The company is a major supplier of high-bandwidth memory (HBM) chips for AI systems.

Goldman Sachs’ general counsel, Kathryn Ruemmler, is under scrutiny over alleged ties to Jeffrey Epstein and accusations of executive-level information leaks.

Japanese coatings giant Nippon Paint made an $8.6 billion offer for AkzoNobel’s decorative paints unit, reigniting a long-running acquisition battle amid strong global demand for architectural coatings.

Federal Reserve officials are now tracking three new inflation risks: AI capital spending, Middle East supply chain disruptions, and tariff-driven cost increases. June meeting minutes showed “almost all” policymakers remain open to rate hikes if inflation stalls.

Economists expect core CPI to ease to 2.8% year-over-year, but after last month’s unexpected rise, the Fed is unlikely to assume disinflation. A core reading above 3% would raise rate-hike expectations.

Michelle Bowman, one of the Fed’s most hawkish members, will discuss “Modernizing Financial Regulation” in prepared remarks. Markets will look for hints on potential rate moves.

Tech firms have issued $250 billion in AI-related debt this year, more than initially projected, adding pressure to bond markets as Microsoft, Alphabet, and Meta borrow heavily to fund data center expansion.