Good morning. Here's what happened overnight and what you need to know today.
1.
AI redesigned: OpenAI is acquiring io, the AI device startup co-founded by former Apple design chief Jony Ive, in a nearly USD6.5 billion ($10.1 billion) all-stock deal — its largest ever — to develop a new family of AI-powered devices. The purchase adds about 55 hardware engineers, software developers and manufacturing experts, and creates a dedicated hardware unit within OpenAI. Ive will lead design across OpenAI, while his firm LoveFrom remains independent but will oversee all hardware and software design, The Wall Street Journal reported. Ive and CEO Sam Altman, who have worked together for two years, plan to launch their first product in 2026, described in a video as a truly novel type of product. “We have the opportunity here to kind of completely reimagine what it means to use a computer,” he said. OpenAI had acquired a 23% stake in io last year and is now paying around USD5 billion to complete the deal, The New York Times reported. (Capital Brief)(OpenAI)(FT)(WSJ)
2.
Yield yikes: US stocks and bonds fell after a disappointing USD16 billion ($24.9 billion) auction of 20-year Treasuries, whose 5% coupon was the highest since the bond was reintroduced in 2020. Long-term yields jumped, with the 30-year rising to 5.096% and the 10-year hitting 4.589%. The S&P 500 fell 1.61%, the Dow 1.91% and the Nasdaq 1.41%. The auction added to worries about the US’s ballooning deficit and Moody’s downgrade. Bitcoin rose to a record high. UnitedHealth dropped 5% following a Guardian report on bonus payments to nursing homes and a downgrade by HSBC. Target fell after missing expectations and cutting its annual outlook, citing tariffs and a pullback in discretionary spending. Vans owner, VF Corp also missed estimates. Meanwhile, Bloomberg reported, the EU sent a revised trade proposal to the US including tariff cuts and cooperation in energy and AI, while preparing tariffs on €95 billion of US exports if talks fail. (Target)(WSJ)(Reuters)(FT)(Bloomberg)
