Good morning,

IPO fever is back with Bullish — a Peter Thiel-backed crypto exchange — more than doubling from its $37 debut to $92 on day one, capping the best year for IPOs since 2020.

Over in crypto, Bitcoin hit another record, blasting past $123,000 after this week’s cooler-than-expected CPI boosted the odds of a September rate cut to a near lock.

Main Street isn't feeling as flush, though. Americans still think the economy is going down, with consumer sentiment stuck in recession-adjacent territory.

And as Cava’s earnings showed, even buzzy fast-casual chains are feeling the pinch, with Americans cutting down on eating out.

Meanwhile, the AI wars are heating up. Apple is plotting a comeback that includes a lifelike Siri, home-security cameras, and a tabletop robot “companion” straight out of Black Mirror.

And in one of Big Tech’s more bizarre headlines, Perplexity lobbed an unsolicited $34.5 billion bid to buy Chrome from Google.

Oh, and Trump is threatening Putin with “very severe consequences” if tomorrow’s Alaska summit doesn’t come to a ceasefire, while hinting at a follow-up meeting with Zelenskiy.

Quote of the day 

Six things to know before opening bell

🍏 Apple’s AI comeback play

Apple’s plotting a return to AI glory with a lineup of new devices, headlined by a lifelike Siri, home-security cameras, and a tabletop robot “companion” straight out of Black Mirror. The bot, aimed for a 2027 launch, is the centerpiece of the strategy, people familiar with the matter told Bloomberg.

📈 CPI keeps rally alive

The Dow and Nasdaq closed at record highs for a second straight day, with the Dow tacking on another 400 points. Bitcoin climbed back above $123,000, just shy of last month’s record. That's all thanks to a cooler CPI print,  but wholesale inflation and jobless claims out today could swing the market in either direction.

🚀 IPO rocket fuel

Bullish more than doubled from its $37 debut to $92 on day one, marking the best IPO year since 2020. But University of Florida business professor Jay Ritter says don’t expect the euphoria to last. “Those that double or more on the first day have average long-term returns below IPOs with less hype,” he said.

🖥️ Is Google selling Chrome?

In a plot twist for the tech ages, AI startup Perplexity lobbed an unsolicited $34.5 billion bid to buy Google’s Chrome browser, nearly twice its own estimated value. The timing is awkward for Google, which is awaiting an antitrust ruling that could recommend selling Chrome. The Justice Department has previously supported a sale of Chrome as a potential remedy. 

🛢️ More oil supply in the cards

The IEA now sees global oil supply growing 2.5 million barrels per day by year-end 2025, 370,000 more than its July forecast with another 1.9 million bpd coming in 2026. According to the IEA, “the latest data show lackluster demand across the major economies and, with consumer confidence still depressed, a sharp rebound appears remote.”

🇺🇸 Trump’s ‘very severe’ warning to Putin

Donald Trump is threatening “very severe consequences” if Vladimir Putin doesn’t agree to a ceasefire at tomorrow’s Alaska summit. He also floated the idea of a second, faster follow-up meeting that would include Ukrainian President Volodymyr Zelenskiy.

🐂 "It's very expensive right now to be bearish"

Recession chatter is growing louder, but you wouldn’t know it from the way investors are piling into risk assets. 

📉 Americans are expecting the worst...

We’ll get August’s preliminary consumer sentiment reading tomorrow, but July’s University of Michigan survey doesn't inspire confidence.

Americans expect 4.5% inflation over the next year, which a slight drop from June, but still well above 2024’s year-end pace. 

Sentiment ticked up from June but, at 61.7, is lower than it was at the start of each of the past six recessions. Last month’s index was also 4.7 points (7%) below July 2024.

“Sentiment remains broadly negative,” said survey director Joanne Hsu. “Consumers are hardly optimistic about the trajectory of the economy, even as their worries have softened since April 2025.”

📈 ... but they’re investing for the best

Americans’ pessimistic outlook hasn’t stopped risk-taking, though.

While plenty of investors are hiding out in defensives and safe havens, the surge in meme stocks, crypto, and — most recently — IPOs says otherwise.

“The mood is surprisingly bullish; it’s almost like ‘what tariffs, who cares?’” said Neil Birrell, CIO at Premier Miton Investors. “There’s this detachment from economic reality… and a wave of either optimism or exuberance in equity markets.”

Many asset classes are set to open at or near record highs again today, so buying at these levels — whether it’s crypto, gold, or meme stocks — naturally comes with risk.

That doesn’t mean it’s necessarily irrational.

“Do I see a lot of potential risks to dent some of the sentiment and expectations? I do,” said Bernard Ahkong, CIO of USB O’Connor Global Multi-Strategy Alpha. 

“But I do not think the market is being irrational… We could go a lot further before the market gets irrational. It’s very expensive right now to be bearish.”

🔮 100% rate cut? Atlanta Fed says not so fast

Between near-lock odds of a rate cut and Trump’s hunt for a replacement, the Fed is under a tiny microscope, and Wall Street is watching every move.

🔮 Rate cut looks inevitable

It’s rare to get a consensus in today’s market, but the CME Group’s FedWatch tool says there’s a 96% chance of a rate cut at next month’s FOMC meeting.

That’s about 10 percentage points higher than just a few days ago.

It’s still a far cry from what the Trump administration wants, with Treasury Secretary Scott Bessent publicly calling for a much bigger move.

“I think we could go into a series of rate cuts here, starting with a 50 basis-point rate cut in September… we should probably be 150, 175 basis points lower,” he said yesterday.

For now, Wall Street’s loving the odds. Back-to-back record closes for the S&P 500 and Nasdaq suggest traders are already pricing in relief.

🔍 The search for Powell’s replacement

With Powell’s term ending in a few months — and his most vocal critic in the Oval Office — the jockeying for his job is heating up.

Trump said yesterday he’s narrowed his shortlist to “three or four names,” confirming earlier reports he’s zeroing in on a final group.

Then came the curveball: he might announce his pick “a little bit early,” rekindling speculation he could try to push Powell out before his term officially ends in May.

The way Trump plays this will shape perceptions of the Fed’s independence. He’s already flexed his muscles by nominating Stephen Miran, chair of the Council of Economic Advisers, to replace former governor Adriana Kugler.

🃏 Possible wild card

While Wall Street thinks a September cut is a lock, Atlanta Fed President Raphael Bostic says consensus isn’t there yet.

“We should wait till we have a little more clarity on where things are going,” he said yesterday. “I feel like we have the luxury to do that today, because the labor market has been pretty much at full employment.”

📈 Small caps hit their stride

Small-cap stocks have been playing catch-up in this year’s rally, but August is starting to close the gap.

A couple of weeks ago, the big-cap S&P 500 was up more than 8.5% year-to-date, compared to a measly 0.5% gain for the Russell 2000. 

Now those lines are moving closer together.

🤔 What’s behind the shift?

With uncertainty hanging over almost every economic indicator, markets can turn on a dime. But at least for now, a few factors seem to be giving small caps their shot.

Morgan Stanley analysts say a mild inflation print not only boosts the odds of a September rate cut, but could also push bond prices higher.

That, in turn, has “the potential to catalyze a more durable rotation to small caps” and other niche plays, according to them.

And institutional buyers are already turning up the volume.

Bank of America says they drove a second straight week of higher equity activity, with $4.3 billion in single-stock buys last week, the biggest in years.

📈 Big week for small caps

Whatever the reason, numbers tell the whole story:

• S&P 500 +1% on Tuesday to a record close; Russell 2000 +3% the same day

• Yesterday, Russell gains nearly hit 2% vs. ~0.3% for the S&P

• Over the past month, Russell up 3.48% vs. 3.16% for the S&P

Big caps may have led the rally, but small caps aren’t sitting this one out, at least not for now.