The stock market took one bad piece of economic news in its stride, but watch out for a potential double whammy of gloom this week. Traders shrugged off a surprising contraction in the labor market, which wasn’t too much of a concern, but the real risk is fresh inflation data on Wednesday, and a higher read.
Markets start off this week digesting Friday’s payrolls report, which showed the economy lost 23,000 jobs last month. While a single month’s data shouldn’t cause too much alarm, it raises the stakes for the consumer price index. Equities, and especially technology stocks, could do with a benign reading.
The initial conclusion from the weak jobs data is it should prompt the Federal Reserve to act cautiously. Traders now price in a 56% chance the central bank will hold rates steady in September, up from 33% last week. But the danger is that inflation ahead of the Fed’s target rate of 2% could leave the market confused about the central bank’s intentions, with three monetary policymakers already having voted for higher rates at the previous meeting.
The specter of stagflation—slower economic growth amid rising prices—still lingers over what is otherwise a thriving market. With most of the S&P 500 having reported second-quarter figures, 86% have beaten Wall Street’s expectations and earnings are around 29% higher on average than forecast. JPMorgan on Monday lifted its year-end target for the S&P 500 to 8,000, citing the exceptionally strong earnings season.
Still, investors are looking for reassurance that this isn’t as good as it gets, especially around the artificial-intelligence trade. With cloud-computing provider CoreWeave, server maker Super Micro Computer, and networking company Cisco Systems all reporting this week, there will be plenty more evidence for how the AI boom is faring.
Strong tech earnings and a benign CPI figure could send stocks surging higher. But watch out below if inflation heats up and any of the big AI names stumbles. Given what happened on Friday a surprise is possible.
—Adam Clark
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Berkshire’s Stock Buybacks Among Highest in a Decade
Berkshire Hathaway put its cash pile to work during the second quarter, buying back $4.5 billion of stock, one of the highest quarterly totals in the past decade. Investors have been curious about new CEO Greg Abel’s appetite for buybacks since he succeeded Warren Buffett last year.
Berkshire continued its buybacks in July, spending about $3.4 billion through July 29, the date of its second quarter filing with the Securities and Exchange Commission. The July total is a Barron’s estimate based on a comparison of share counts. Berkshire didn’t break out this figure.The conglomerate beat expectations for the quarter, which also included a $8.5 billion deal to buy home builder Taylor Morrison. Cash totaled about $365 billion on June 30, down from $380 billion on March 31, which was adjusted for a liability for $17 billion of Treasury bills purchases.While Berkshire’s cash levels are down, they still are by far the most for any U.S. company. One reason for the cash decline is that Berkshire was a net buyer of about $20 billion of stocks against net sales of about $8 billion in the first quarter.Berkshire sold just $3 billion of stocks, compared with about $24 billion in the first quarter when it liquidated equity investments that had been managed by former manager Todd Combs, who left in December for a job at JP Morgan.
What’s Next: Berkshire reported investment gains of about $35.7 billion, mostly paper gains on the company’s equity portfolio. The company tells investors to focus on operating profits excluding the gains rather than the total figure, which can be distorted by one-time paper gains and losses in Berkshire’s equity portfolio.
—Andrew Bary
Apple May Turn to China to Solve the Memory Crunch
Soaring memory-chip prices have been a big worry for Apple this year. But the iPhone maker thinks a Chinese company can help it to address the crunch, according to a report.
Apple has been testing ChangXin Memory Technologies’ chips across iPhones and Macs sold in China and hopes to get the Trump administration’s approval, The Wall Street Journal reported, citing people familiar with the matter. Apple didn’t immediately respond to a request for comment from Barron’s.CXMT, which recently listed in China, has advanced rapidly in conventional dynamic random-access memory (DRAM), taking 7% of the global market share by revenue in the second quarter, according to Counterpoint Research.That could be a worry for investors in U.S. memory-chip maker Micron, a stock that has more than tripled in price this year through Friday’s close.But it’s unclear whether U.S. manufacturers will get government approval to buy CXMT-produced memory and, in any case, the Chinese company gives priority to domestic customers, according to the Journal. That should limit its threat to Micron’s market share.
What’s Next: A bigger problem for Micron could be if CXMT eventually makes inroads into high-bandwidth memory (HBM), crucial for artificial-intelligence servers. CXMT is set to increase its share of global HBM wafer supply from 1% in 2025 to 12% in 2028, according to semiconductor and AI research firm SemiAnalysis.
—Adam Clark and George Glover
Why Coca-Cola Is Clobbering PepsiCo
Coca-Cola has transformed itself over the past decade gaining share in cola, orange, and lemon-lime soda flavors, and killing it with Zero, a major growth driver. What’s interesting is that Diet Coke and the classic stuff have been gaining share, too, largely at the expense of PepsiCo.
Just over a decade ago, Coke collected more than half of revenue from stakes in regional bottling operations, which make soda from concentrate and put it on trucks for local delivery. Today, Coke has sold, or is close to selling, nearly all of its bottling operations. That makes it an asset-light marketing company.This is part of the reason that Coke trades at 26 times this year’s projected earnings, versus 22 times for the broad market, and 16 times for Pepsi, which remains vertically integrated. Pepsi is more than half food, especially snacks, thanks to its Frito-Lay and Quaker Foods divisions.Diet Coke, appearing in 1982, wasn’t trying to mimic Coke. It was more citrusy to mask the metallic aftertaste of saccharin, which was later replaced with aspartame. Diet Coke was such a success that executives combined the same flavor profile with high-fructose corn syrup to make New Coke. It flopped.Coke Zero debuted in 2005. The idea was to copy Classic Coke’s taste and to avoid the “Diet” label, which men had been conditioned to view as feminine. Coke Zero is sweetened with a blend of aspartame and something called Ace-K, because the two help cancel each other’s aftertaste.
What’s Next: Coke Zero ranks behind Classic and Diet in sales but is growing much faster. One investment bank’s bull case on Coke, with its 2.4% dividend yield, is that investors should value it like asset-light success stories in other industries—for example, Marriott International, at 31 times earnings.
—Jack Hough
Mortgage Rates Are All Over the Place. That Could Benefit Buyers.
The typically busy spring season for the housing market was a dud, and the summer isn’t looking much brighter. Housing services companies like Zillow Group and Rocket were loud and clear last week on earnings calls: It was one of the toughest spring housing markets in years.
Zillow CFO Jeremy Hofmann said on a conference call that the company earlier predicted the market for mortgages would be flat, but now it actually sees it down low-to-mid-single digits. The rest of 2026 will remain challenging for mortgage origination volume, says KBW analyst Bose George.George says if rates stay around 6.75%, things are going to remain challenging next year. But what’s bad news for mortgage companies could be a positive for bargain hunters. Buyers can expect prices to grow more slowly, or mildly decline, with less competition as long as rates remain unpredictable.Zillow senior economist Kara Ng notes that rates have surpassed last year’s levels recently, referencing Freddie Mac’s weekly survey of 30-year fixed mortgage rates. Last week’s reading, at 6.69%, was higher than year-ago levels for the first time in 2026. Affordability is going to get more challenging.Mortgage application data tracked by the Mortgage Bankers Association has cooled since the beginning of the year. The trade group expects that the number of mortgage originations in the remaining two quarters will lag behind last year’s levels, after exceeding 2025 levels in the first half.
What’s Next: Rocket’s CFO Brian Brown says early data derived from its brokerage Redfin and other metrics leads them to expect the third quarter mortgage market to be smaller than the second, “something the industry has not seen since 2022.”
—Shaina Mishkin
Hollywood Will Notch a $4 Billion Summer. Here’s Why.
Spider-Man: Brand New Day exceeded projections for a second straight weekend, topping both the domestic and global box office, and is projected to power Hollywood’s domestic summer ticket sales to $4 billion by today. Its estimated $3.985 billion through Sunday is 22% above this point last summer.
Brand New Day, distributed by Sony Pictures, sold $145 million in domestic box office tickets in its second weekend, on top of last weekend’s record $360 million, bringing its total to an estimated $655.1 million domestically and $1.67 billion worldwide, according to Rentrak.Spider-Man is now the highest-grossing movie this year and the 12th highest of all time, according to Rentrak. Five movies have grossed more than $1 billion worldwide: Universal’s The Odyssey, Universal’s The Super Mario Galaxy Movie, Disney Pixar’s Toy Story 5, and Lionsgate’s Michael.“I don’t think any box office record is out of reach,” including Spider-Man potentially becoming the first film to cross $1 billion in domestic box office, Rentrak’s head of marketplace trends Paul Dergarabedian said. Premium-format screenings, audiences’ FOMO (fear of missing out), and social media buzz are fueling momentum.The Odyssey, which opened July 17 with $123.5 million, grossed another $31.5 million this weekend. That brings its domestic box office to an estimated $461.2 million, and its worldwide box office to $1.1 billion, including $289.3 million on IMAX screens.
What’s Next: Hollywood’s estimated box office sales for the year of $6.61 billion through Sunday is 18.5% higher than at this point in 2025. This summer’s box office, from May 1 through Labor Day, has an extra week, making it a 130-day season compared with the typical 123 days, Dergarabedian notes.
—Janet H. Cho
—Newsletter edited by Liz Moyer, Patrick O’Donnell, Rupert Steiner