Trump’s Crypto Fortune Balloons, Meta Builds a Cloud Business

**Zaid Admani** (0:00)
Public.com presents The Rundown, your daily market update in 10 minutes. My name is Zaid Admani, and today is Wednesday, July 1st. In today's episode, we'll break down the market's monster second quarter, and what investors should watch for in the second half of the year. We'll also recap Nike's earnings and tell you why Meta is getting into the cloud business. Then stick around to the end of the show to find out how much money President Trump made from Crypto last year. We got a great show for you today.
Let's go.
Stocks closed out the first half of the year on a high note. The S&P 500 rose 0.8% on Tuesday, and the Nasdaq jumped 1.5%. And I have to bring up the Dow again, it added 0.3% to close at another record high. But I still don't care though. Now, zooming out, Q2 overall was a memorable one for the markets. The S&P 500 rose 15%, while the Nasdaq went up 21%.
It was actually the best quarter for both indices since 2020 And this rally happened through a lot of chaos. We had the Iran War, of course, the oil spike, inflation worries, rate hike fears, the biggest IPO of all time, and moments where investors started worrying about an AI bubble. But despite all of that, stocks, especially chip stocks, rallied hard. The Semiconductor Index climbed 88% in Q2, the best quarter ever in that index's history. Some of the notable winners include Micron, which rallied 242% last quarter, and AMD, which jumped 186%. And that sets up an interesting second half of the year. Can this rally keep going? And if it does, will it continue to be concentrated in tech and AI stocks, or will it broaden out to other sectors? So far, we're seeing the rally broadening out, and I think it helps that oil prices have cooled off in Q2. WTI crude dropped 31% in Q2 to under $70 a barrel after the US and Iran agreed to end the fighting. Traffic in the Strait of Hormuz is picking up, but it's still unclear when traffic will fully normalize and if this peace deal will hold. So it's still a fragile situation, but it's not something the market is too worried about right now. To me, there are gonna be two main things to watch in the second half of 2026 The first thing is earnings. On yesterday's show, I mentioned that earnings and profit margins have grown at a record pace in the last two quarters. If companies can keep growing profits and expanding margins like they have, this rally could keep going. But if earnings start disappointing, well then it becomes harder for investors to justify these valuations. The second thing to keep an eye on and probably the most important is the Fed and the labor market. The market is now pricing in multiple rate hikes by the end of the year. But the Fed can only hike rates if the labor market holds up. Now so far, the labor market data has been strong and we'll get more information about that tomorrow morning when the June job report comes out. So the next few weeks could really set the tone for the rest of the year. You know, we're getting earnings in about a couple weeks. And then there's a Fed meeting at the end of the month. We're going to be staying on top of all that. So if you're new here, definitely get subscribed to the podcast if you haven't already and tune in every day to stay in the loop.
Let's run through some headlines. Starting with Nike. Nike reported earnings last night. And despite the company beating expectations, the stock is sliding today. Let's get into the numbers. Last quarter, Nike's revenues came in at $10.97 billion. So just a hair shy of 11 billion. Now that was slightly better than expected, but revenues are still down 1% from the same quarter last year. So Nike is still not growing their top line. As for their profit, that came in at $1.07 billion, but that was heavily boosted by a one-time tariff refund of $986 million after the Supreme Court struck down many of President Trump's global tariffs earlier this year. So the headline profit number looks decent, but the underlying business is still struggling, especially in China. Sales in Greater China fell 12% to $1.3 billion. Nike is just getting crushed over in China by local Chinese competitors like Antisports and Li Ning. In fact, we covered a few weeks ago that Li Ning signed Steph Curry to a 10-year shoe deal, and now they're trying to expand into the US market. So Nike is going to start facing competition here in the US as well from these Chinese companies. And looking beyond China, Nike's Converse brand was a total disaster. Sales fell 32% and Nike Direct, which includes Nike's own stores and website, fell 7%. I think the biggest problem is that management doesn't expect things to get better anytime soon. The outgoing CFO of Nike, Matt Friend, told investors that we are not expecting the environment to improve meaningfully over the next six months. So that's why investors are dumping the stock. Shares fell as much as 8% in after hours trading before recovering a bit. The stock is currently down around 4% at the time of this recording. You know, there's been almost two years since CEO Elliot Hill took over the company. There was a lot of hype around him coming in because he was a Nike lifer and they thought that he could turn around the company. But his turnaround plan so far hasn't worked yet. Sales continue to slide and investors are losing patience. Nike stock is down around 35% this year. I think it's possible that Nike just might be fully cooked here. The old Nike playbook just isn't working the way it used to. You know, Nike built one of the greatest brands in the world on legendary marketing and using star athletes and having a cultural dominance. But today, consumers have way more options. Athletes have way more leverage and the sneaker market is a lot more fragmented. So let me know in the comments on what you guys think. Has Nike actually turned things around or has the swoosh permanently lost its relevance? Let's shift gears and talk about Anthropic. The AI company behind Claude has finally reached the deal with the Trump administration to bring back access to its most powerful AI models. Now a quick refresher here. Back on June 9th, Anthropic released Fable to the public. Fable was a guardrailed version of Anthropic's most powerful model called Mythos. And the couple of days that I got to use it, it felt absolutely next level. But apparently it was so good, especially at finding security flaws, that it freaked out cybersecurity experts. And despite Anthropic putting in those guardrails on Fable to keep it from being misused, researchers at Amazon found a way to get around those guardrails and jailbreak the model. So on June 12th, the Commerce Department ordered Anthropic to restrict foreign access to Fable and Mythos over national security concerns. Anthropic just decided to take down the models completely. Well, over the last two and a half weeks, Anthropic said they reached an agreement with the US government after building new safeguards that block jailbreaks about 99% of the time. So now the US government is lifting their restrictions, and Anthropic said that access to Fable will start coming back online today. To me, the bigger story here is that the US government is starting to play a much bigger role in AI development. Now, President Trump signed an executive order recently that required AI companies to give the government a look at new models 30 days before releasing them. OpenAI's newest model, GPT 5.6, is rumored to be restricted by the US government right now, and Meta is reportedly being pressured to start submitting their models for review as well. So I wonder what this does to AI innovation and model development over time. Some are making the case that this is actually a good thing because AI is so powerful that the US government needs to take an active role in overseeing the technology. But then on the other side, government intervention could restrict innovation as well. So we'll see what ends up happening and if this leads to further AI regulation down the line. Let's talk about some stocks making moves today.