Rate cut bets lift Wall St as Trump hits Goldman, Powell

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

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1.

Cut countdown: Stocks surged to record highs after an in-line US inflation reading bolstered bets the US Fed will cut interest rates next month, even as core prices rose at their fastest monthly pace since January. The Labor Department said the CPI rose 0.2% in July, while core CPI climbed 0.3% from June and 3.1% from a year earlier. Money markets priced in an almost 90% chance of a September rate cut, with two-year Treasury yields falling and the dollar declining. Corporate highlights included Perplexity AI’s bid for Chrome, Intel’s second day of gains after Trump met CEO Lip-Bu Tan, and Hanesbrands rising on Gildan takeover talks. Meanwhile, Donald Trump renewed criticism of Fed Chair Jerome Powell, saying he is weighing a “major lawsuit” against him over the renovation of the central bank’s headquarters. Trump also attacked Goldman Sachs CEO David Solomon over the bank’s analysis that US consumers have absorbed 22% of tariff costs. “I think that David should go out and get himself a new Economist or, maybe, he ought to just focus on being a DJ, and not bother running a major Financial Institution,” he posted. (Capital Brief)(WSJ)(Bloomberg)(Reuters)

2.

Chrome chase: AI startup Perplexity made an unsolicited USD34.5 billion ($52.8 billion) bid to buy Google’s Chrome browser, in anticipation of potential remedies in a US antitrust case that could force its sale. Multiple large investment funds had agreed to finance the transaction in full, Dmitry Shevelenko, chief business officer of San Francisco-based Perplexity – itself valued at about USD18 billion – told Bloomberg. It comes as US District Judge Amit Mehta is expected to decide this month on possible remedies that could include forcing a Chrome sale. In a letter to Google CEO Sundar Pichai, cited by The Wall Street Journal, Perplexity pledged to maintain and support Chromium and keep Google as Chrome’s default search engine. Perplexity’s offer is “designed to satisfy an antitrust remedy in highest public interest by placing Chrome with a capable, independent operator,” Perplexity says in the letter. OpenAI, Yahoo and Apollo Global Management have also reportedly expressed interest in buying Chrome. (Capital Brief)(WSJ)(Bloomberg)(Reuters)

3.

Light touch: ASIC joined calls for a light-touch approach to artificial intelligence, as Treasurer Jim Chalmers moved to dismiss suggestions that the government’s work on AI regulation had stalled following the post-election cabinet reshuffle. Speaking at King & Wood Mallesons’ Digital Summit 2025 on Tuesday, ASIC chair Joe Longo said he agreed with the Productivity Commission (PC) that AI regulation should proceed cautiously. However, Longo argued the PC’s position did not go far enough, as it lacked a detailed analysis of AI’s risks and opportunities. “I don’t see AI as an enforcement issue. It’s a whole-of-society, whole-of-community phenomenon that we’re all grappling with,” Longo said. Last week, the PC released its interim report on data and digital technology, urging the government to avoid heavy-handed rules targeting AI specifically. Excessive regulation, it warned, could stifle business adoption of AI, which is expected to drive economic growth and productivity over the next decade. (Capital Brief)

4.

Epic win: Apple and Google’s dominance of the app market was ruled anti-competitive by Australia’s Federal Court. Justice Jonathan Beach found the companies misused market power in breach of section 46 of the Competition and Consumer Act by restricting alternative payment methods and, for Apple, prohibiting native apps outside its store. However, claims they breached consumer law or engaged in unconscionable conduct were rejected. In a post on X, Epic Games said Fortnite would return to iOS in Australia. Apple said it welcomed the rejection of some claims but strongly disagreed with other findings. Google said it welcomed parts of the ruling but disagreed with the court’s characterisation of its billing policies and historical partnerships. The ruling paves the way for a second hearing on compensation and potential changes to app store and payment practices. (Capital Brief)(Reuters)(AFR)

5.

Bad ranking: Elon Musk said that his AI company xAI will sue Apple over allegedly favouring other AI competitors in its App Store. Musk said via X that Apple only permits OpenAI’s ChatGPT to hold the top ranking for mobile applications and that xAI planned to take immediate legal action over what he called a breach of antitrust regulations. xAI’s AI model, Grok, currently holds 6th ranking in the Apple App Store’s ‘Top Free Apps’ section in the US, while ChatGPT holds top spot. Apple has previously faced legal challenges around its App Store with the Federal Court of Australia ruling that both Apple and Google engaged in anti-competitive conduct by misusing market power in how their app stores were run earlier on Tuesday. In April, the European Commission fined Apple €500 million ($890 million) for breaching a digital competition law. (Elon Musk X )(FT)(Capital Brief)

6.

Israel Palestine war: Foreign ministers of Australia, Britain, Canada and 24 other nations called on Israel to take “immediate, permanent and concrete steps” to allow aid into the Palestinian enclave to address “unimaginable levels” of suffering. "We call on the government of Israel to provide authorisation for all international NGO aid shipments and to unblock essential humanitarian actors from operating," the statement signed by Penny Wong states. The statement says that all crossings and routes must be used to allow a “flood of aid” into Gaza, including food, nutrition supplies, shelter, fuel, clean water, medicine and medical equipment. It continues that lethal force must not be used at distribution sites, and civilians, humanitarians and medical workers must be protected. Germany and Hungary did not sign the statement. Albanese on Monday announced that Australia will recognise a Palestinian state at next month’s UN General Assembly. (Joint statement)(Capital Brief)

7.

Chip wars: Just as the Trump administration reversed an effective US ban on Nvidia’s H20 AI chip sales to China, Beijing has moved to curb them, telling major tech companies, including Alibaba, ByteDance, Tencent and Baidu, to suspend or avoid purchases over data security concerns, according to media reports citing unnamed sources. The Cyberspace Administration of China and other agencies in recent weeks sent notices and held meetings discouraging use of the H20, particularly for government or national security-related projects, Bloomberg reported. The regulators are also asking why firms were not using domestic alternatives. The move follows a deal with the Trump administration allowing Nvidia to sell the H20 in China in exchange for giving the US government 15% of related revenues. Nvidia denies its chips contain backdoors or security vulnerabilities. While not an outright ban, the guidance has prompted some companies to reduce orders. (Capital Brief)(Bloomberg)(FT)(The Information)

8.

Deep discounts: Anthropic has become the latest AI tech firm to offer lucrative deals to the US government to win federal contracts, announcing that it will offer its Claude AI chatbot to all three branches of the US government for USD1 ($1.53). The news follows the addition of OpenAI's ChatGPT, Google's Gemini and Anthropic's Claude to the government's list of approved AI vendors. Last week, AWS announced plans to provide US government agencies with as much as USD1 billion in savings for cloud adoption, modernisation, and training over the next three years. The US General Services Administration also struck a deal with OpenAI last week to cut costs and save taxpayer dollars, with US agencies able to use its ChatGPT Enterprise product for USD1 for the next year. (GSA)(Anthropic)(Capital Brief)