Nasdaq hits new highs on rate cut bets

Good morning. Here's what happened overnight and what you need to know today.

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1.

Rate rush: The Nasdaq notched a record high close, gaining 0.45% to 21,798.70, its 21st of the year, while the S&P 500 climbed 0.21% to 6,495.15 and the Dow rose 0.25% to 45,514.95. The advance came as traders have fully priced in at least a 25 basis points interest rate cut at the Fed’s meeting next week, with a 10% chance of a 50 basis point cut, according to CME data. Barclays now anticipates three cuts of 25 bps each in 2025, up from two, while Standard Chartered expects a 50 basis point trim in September. Meanwhile, Robinhood and AppLovin jumped after being added to the S&P 500 effective 22 September. EchoStar soared after agreeing to sell wireless spectrum licences to SpaceX. Oil prices rallied as the possibility of more sanctions on Russian oil outweighed OPEC+’s plan to raise output, then pared gains. And Japanese stocks rose as the yen weakened following the prime minister’s resignation. (Reuters)(Bloomberg)(WSJ)

2.

French confidence: France’s government collapsed again after Prime Minister François Bayrou lost a confidence vote he had called to highlight the urgency of tackling the country’s ballooning debt and deficit. The National Assembly rejected his government 364 to 194 — a crushing defeat in the 577-seat chamber. In office just nine months, Bayrou had proposed €44 billion ($78.49 billion) in annual savings, including freezing welfare payments and cutting two public holidays. The plan was blocked by opposition from the far left, far right and others. President Emmanuel Macron will accept Bayrou’s resignation on Tuesday and appoint a replacement “in the coming days,” according to a statement cited by Bloomberg. This is France’s fourth change of prime minister in 20 months, amid ongoing deadlock since Macron’s 2024 snap election. His support has fallen to 15%, according to a Verian poll for Le Figaro Magazine. Marine Le Pen, leader of the largest party in Parliament, demanded fresh elections. (Capital Brief)

3.

Airwaves Acquisition: US telecoms and satellite company EchoStar agreed to sell its full portfolio of spectrum licences to SpaceX in a USD17 billion ($25.8 billion) deal. SpaceX will pay up to USD8.5 billion in cash and issue up to USD8.5 billion in stock in the transaction, and agreed to cover roughly USD2 billion in interest payments on EchoStar's debt obligations through late 2027. EchoStar’s full portfolio of AWS-4 and H-block spectrum licences are designated for satellite communications by the US Federal Communications Commission (FCC). In May, the FCC began investigating whether EchoStar was meeting its obligations for wireless and satellite spectrum rights after SpaceX complained that the telecoms giant was not putting its spectrum holdings to use. The companies also agreed to enable EchoStar's Boost Mobile subscribers to access SpaceX's Starlink Direct to Cell service. Meanwhile, US market share of Elon Musk’s Tesla fell to its lowest level since 2017 in August as competition intensifies. (EchoStar)(Reuters)(Bloomberg)(Capital Brief)

4.

Data cash: Databricks said it is on track to reach USD4 billion in annualized revenue, up more than 50% from the prior year, after closing a USD1 billion Series K funding round at a valuation above USD100 billion. The round was co-led by Andreessen Horowitz, Insight Partners, MGX, Thrive Capital and WCM Investment Management. Databricks said sales of its artificial intelligence products have reached a USD1 billion revenue run rate. The company serves about 15,000 customers, including Shell and Rivian, while CEO Ali Ghodsi told the Wall Street Journal roughly 650 customers each spend more than USD1 million annually. He also said Databricks had positive free cash flow in the past 12 months. The company will use the new capital to expand products, launch a new operational database category and pursue acquisitions and research. (WSJ)(Reuters)(Bloomberg)(Databricks)

5.

Raid pass: The US Supreme Court lifted a judge’s order restricting immigration raids in Los Angeles, allowing the Trump administration to resume patrols that plaintiffs said relied on racial profiling. The 6-3 decision, issued without explanation, paused US District Judge Maame Frimpong’s ruling, which found a “mountain of evidence” the tactics violated constitutional protections. Justice Brett Kavanaugh, in concurrence, said factors such as race, language, job or location can “heighten the likelihood” someone is in the country unlawfully. Justice Sonia Sotomayor dissented, warning Latinos “who work low wage jobs are fair game to be seized at any time.” The lawsuit cited stops of US citizens, including a man thrown against a gate and detained after failing to name the hospital where he was born. ICE has made 5,210 arrests in the region since 6 June. Meanwhile, in Chicago, DHS launched “Operation Midway Blitz,” targeting undocumented immigrants with criminal records, though only a handful of arrests were reported. (Capital Brief)

6.

Riyadh base: Macquarie Asset Management (MAM) signed an MoU with Saudi Arabia’s USD925 billion ($1.4 trillion) sovereign wealth fund, Public Investment Fund (PIF), in the Kingdom’s latest effort to secure global partners. Under the non-binding agreement, PIF and the MAM will explore joint investments in sectors such as digital infrastructure, electric vehicle infrastructure and energy storage. A press release shared by PIF on Monday says that MAM will seek to establish a regional office in Riyadh, which represents a continuation of PIF’s ongoing efforts to localise and build partnerships with leading global investors and operators. Ben Way, global head of Macquarie Asset Management, said: “We are excited by the opportunities presented by Saudi Arabia’s economic transformation…We aim to explore collaboration in a number of key sectors across infrastructure and energy transition.” The Kingdom aims to achieve USD100 billion in foreign direct investment by 2030 to diversify away from oil. (PIF)(Reuters)(Capital Brief)

7.

Business boost: Business Council of Australia (BCA) chief executive Bran Black called for "positive reform" to reduce red tape and "uncompetitive and ill-conceived tax ideas", during a speech at the BCA's annual dinner on Monday evening. Black said principles for tax reform "must track through to increases in business investment across the board for businesses of all shapes and sizes". "And a good place to start is red tape reduction," he said, "which is now very much on the national agenda for all the right reasons, but which would benefit from a clear target to cut cost impact by 25%". Also speaking at the dinner, Prime Minister Anthony Albanese said the government wants to keep the dialogue on tax reform going, “leading into future budgets…looking at fair and affordable ways to incentivise greater business investment and capital deepening.” The PM also affirmed the need to make it “easier to deal with government, at every level.” (Capital Brief)

8.

Israel-Palestine war: Israeli Prime Minister Benjamin Netanyahu threatened to retaliate after six people were killed and 10 injured in a shooting attack in Jerusalem. Witnesses reported that two gunmen opened fire at a bus in Jerusalem on Monday morning local time before being shot dead by a nearby Israeli soldier and armed civilians. Israeli Foreign Minister Gideon Sa’ar said the gunmen were Palestinians from the Israeli-occupied West Bank. No group has claimed the attack, but Hamas commended the actions of the attackers, calling it a "natural response" to Israel's military activity in Gaza. The Palestinian Authority rejected and condemned the targeting of Palestinian or Israeli civilians. Netanyahu said: “We will apprehend whoever aided and dispatched them, and we will take even stronger steps.” Tensions have been running particularly high since Israel began a major offensive in Gaza City, and began expanding settlement construction and forced eviction of Palestinians from land across the West Bank. (FT)(WSJ)(BBC)(Capital Brief)