CNBC — 2026-07-01#

Lead Story#

The third quarter kicked off with a dramatic market rotation, as investors took profits from the high-flying semiconductor sector and plowed capital into first-half laggards. Highlighting this shift, Meta Platforms shares surged up to 11% following reports that the social media giant is launching a highly anticipated cloud-computing business to sell excess artificial intelligence capacity.

Markets & Economics#

Wall Street closed out a strong first half of 2026, with the S&P 500 gaining 9.6% and the tech-heavy Nasdaq Composite jumping 12.8%. However, early Q3 trading saw a sharp retreat in AI darlings like Micron and Intel, alongside lighter-than-expected economic data as June private payrolls increased by just 98,000, missing the 110,000 estimate. In currency markets, the Japanese yen slid to a fresh 40-year low of 162.83 against the dollar, sparking renewed intervention watch as wide U.S.-Japan interest rate differentials continue to fuel the carry trade. Meanwhile, Brent crude oil posted its steepest monthly decline since March 2020—plunging roughly 21%—as the recent U.S.-Iran ceasefire allowed 40 million barrels of Iranian oil to successfully exit the previously blockaded Strait of Hormuz. In central bank action, Federal Reserve Chairman Kevin Warsh spoke at the ECB Forum in Sintra, signaling an imminent overhaul of how the Fed measures inflation and communicates its policy functions moving forward.

Business & Earnings#

Nike shares stumbled over 3% after reporting a 12% sales drop in Greater China to $1.30 billion, overshadowing its fiscal fourth-quarter earnings beat of 20 cents per share. Conversely, General Mills rallied 6% following an earnings beat of 95 cents per share and the announcement of a $3 billion cumulative cost-savings plan through 2030. In the grocery sector, Kroger announced a $1.65 billion acquisition of Giant Eagle to scale its footprint and expand its reach into adjacent markets amid fierce competition from Walmart and Amazon. Constellation Brands also gained ground in extended trading after surpassing expectations with adjusted earnings of $3.43 per share on $2.43 billion in revenue.

Investing & Commentary#

CNBC’s Jim Cramer advised investors to capitalize on Wednesday’s market rotation, specifically pointing to pullbacks in AI infrastructure stocks like Micron and AMD as prime opportunities to buy winners at a discount. On the space and tech front, Wedbush’s Dan Ives initiated coverage of SpaceX with an “Outperform” rating and a $190 price target, calling the company’s vertically integrated model and reusable Starship rocket the crucial “linchpin” for its future success. Additionally, options traders are demonstrating unusual bullishness on the KraneShares CSI China Internet ETF (KWEB), piling heavily into call options despite the fund languishing in a nine-month bear market.

Also Worth Watching#

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• PlayStation will end physical disc production for new games in 2028: Sony will transition entirely to digital game sales starting in January 2028, aligning its strategy with rapidly shifting consumer preferences.
• Lamborghini reveals new Urus performance hybrid SUV after ditching EVs: The Italian automaker debuted the 812-horsepower Urus SE Performante plug-in hybrid as it formally shifts focus away from fully electric vehicles.
• U.S. won’t renew USMCA, opening door for negotiations with Canada and Mexico: The Trump administration opted against a rubber-stamp renewal of the trilateral trade pact, triggering annual reviews that could lead to widespread renegotiations.