Crypto News: Chip rout deepens

Good morning. The selloff in chip stocks deepens. Donald Trump says the US is talking to Iran. And why some dedicated runners want their clothes to look moth-eaten. Listen to the day’s top stories.

— Marcus Wright

Market Snapshot
S&P 500 Futures	7,439.50	-0.1%
Nasdaq 100 Futures	27,932.25	-0.9%
Bloomberg Dollar Spot Index	1,223.58	+0.1%
WTI Crude Oil Futures	$81.26	-1.6%
Market data as of 06:46 AM ET. Data is subject to provider delays.	Your watchlist

A selloff in semiconductor stocks deepened as signs of China’s progress in advanced chipmaking weighed on global rivals and concern mounted over the sustainability of the AI spending boom. South Korean stocks plunged and tech shares led US futures lower. Here’s our guide to the circular deals that underpin — and perhaps now threaten — the AI boom.

Citadel Securities expects the Federal Reserve to raise interest rates this week — in what would be a surprise move that would strengthen Chairman Kevin Warsh’s credibility in the battle with inflation. Interest-rate swaps imply about a 40% chance of a quarter-point increase tomorrow, an unusually high degree of uncertainty so close to a Fed decision.

Donald Trump said the US and Iran were engaged in diplomatic talks to end the Middle East conflict, but warned the two sides would return to fighting if negotiations didn’t yield a deal. The US president’s comments follow the recent pause in the tit-for-tat strikes that followed the collapse of an interim peace deal signed in June. Oil extended a decline after Trump’s comments.

Can a Chatbot Be Held Responsible for a Death?

More AI. Silicon Valley leaders warned against a US crackdown on open-weight AI systems, deepening a debate about how Washington should respond to a recent breakthrough from Chinese startup Moonshot. DeepSeek’s founder was one of the big winners in the blockbuster CXMT IPO after his investment firms were allocated the most shares among local hedge funds. And Taiwanese prosecutors detained an Nvidia employee as part of a probe into the alleged smuggling of AI chips into China.

Flight cancellations multiplied across the Midwest and East Coast as violent storms and an expanding heat wave threatened power grids. Underlining that fragility, the biggest US grid operator is warning that data centers may face involuntary outages under a plan to avert widespread blackouts and protect regular people from electricity price spikes.

Deep Dive: Retirement Savings

Ted Benna. — Ted Benna at his home in Jersey Shore.

The man widely hailed as the father of the 401(k) has a new project. Worried that the retirement savings plans he helped create have grown too complex and costly, Ted Benna is designing a new one intended for the millions of workers who aren’t able to pay into retirement accounts.

Few ideas in finance have been as successful as the 401(k), which has helped some 70 million American workers plan for their later years and sock away $10 trillion in the process.
Even so, recent surveys showed Americans are having a harder time saving for retirement because of rising living costs. Housing, car payments, healthcare and other everyday expenses are taking priority over long-term retirement planning.
Higher costs are also prompting more Americans to tap into their retirement accounts despite high penalties and taxes for doing so.

The Big Take

Deputy Defense Secretary Stephen Feinberg wants America’s war machine to get cozier with companies. It’s one of the ways the Cerberus co-founder is bringing a Wall Street taste for risk to the agency’s $1 trillion budget.

Big Take Podcast

Trump Rebuilds His Tariff Wall

Opinion

The White House’s latest tariff escalation is bewildering for many reasons, not least because the levies imposed up to now have so visibly failed, Bloomberg’s Editors write. The risk that Washington will come to rely on tariffs to postpone a fiscal calamity might be the most insidious of all the dangers posed by the trade policy.

Marc Champion

A Misdiagnosis of US Failings Leaves Trump Stuck in Iran

John Authers

Globalization Ends Not With a Bang, But Tariffs 2.0

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Before You Go

Hard-core marathoners and casual joggers alike are spending more to look better when they sweat — and for some that includes pulling on a $140 T-shirt covered in holes designed to look like it has been in the back of the closet for too long. It’s a sign of how running has become a social status symbol and not just a way to exercise.

A Couple More