S&P 500 in new record as traders brush off softer labour data

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

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1.

Model shift: The S&P 500 closed at a record high as Wall Street looked past weaker jobs data and focused on signs of easing from the Federal Reserve. Meanwhile, The Information reported Microsoft is moving to lessen its reliance on OpenAI, turning to rival Anthropic to power parts of Office 365 Copilot. That was after internal teams reportedly found its models performed better on tasks like Excel and PowerPoint. Elsewhere, Macquarie is reportedly testing AI avatar workers in finance and HR through a partnership with start-up Future Secure AI, part of its push to automate repetitive back-office roles, The Australian Financial Review reported. (Bloomberg)(The Information)(AFR)

2.

Record revision: The Bureau of Labor Statistics (BLS) said that the US added 911,000 fewer jobs than previously thought in the 12 months to March. The number of workers on payrolls during the period is likely to be revised down by 911,000, almost 76,000 fewer per month, the BLS said. Prior to the revision, the US government’s payrolls data indicated employers added nearly 1.8 million total jobs in the year through March on a non-seasonally adjusted basis. The final figures will be released in February 2026 and could be the largest revision on record. The adjustment suggests that the recent labour market slowdown followed a period of more moderate job growth than previously thought, and sets the scene for rate cuts when the Fed meets next week. Wall Street's main indexes were subdued on the news. The WSJ says the White House is preparing a report outlining alleged shortcomings in BLS data. (BLS)(Bloomberg)(Reuters)(Capital Brief)

3.

Gadget launch: Two of the world’s most valuable companies unveiled major hardware updates on Tuesday, with Nvidia announcing a new class of GPU for advanced AI workloads and Apple debuting a thinner iPhone. Nvidia said its Rubin CPX chip, purpose-built for massive-context processing such as generative video and million-token software coding, will be available by the end of 2026. Built on its next-generation Rubin architecture, Nvidia said USD 100 million ($151.9 million) invested in CPX systems could generate USD 5 billion in token revenue. Apple introduced the iPhone Air, a USD 999 model replacing the Plus, calling it a “game changer.” The 5.6mm device features a high-density battery, ceramic shields and a new A19 Pro chip. It also launched the iPhone 17 and 17 Pro, AirPods Pro 3 with live translation and a new Apple Watch with a pending blood pressure monitor. Elsewhere, Reuters reported crypto exchange Gemini secured a USD 50 million investment from Nasdaq ahead of its planned IPO. (Nvidia)(Apple)(Bloomberg)(WSJ)

4.

Doha strike: Israel struck Hamas’s senior political leadership in Doha, targeting a meeting where officials were discussing a US ceasefire proposal, according to Israeli and Arab officials. The Israeli military said it used “precise munitions and additional intelligence.” A Hamas official told Al Jazeera the leadership survived, but the son of top negotiator Khalil al-Hayya and his office chief were killed. Qatar’s Interior Ministry said one of its security officers was also killed and others injured, condemning the strike as a “flagrant violation of all international laws and norms.” Prime Minister Benjamin Netanyahu said Israel “initiated it, conducted it, and takes full responsibility.” White House press secretary Karoline Leavitt told reporters the US was notified in advance, and that Trump ordered Steve Witkoff to pre-inform Qatar of the attack. Qatar said it was not warned. The attack followed a Hamas-claimed shooting in Jerusalem a day earlier that killed six people. Regional governments and international leaders widely condemned the strike. (Capital Brief)(Bloomberg)(Reuters)

5.

Klarna IPO: Swedish buy-now, pay-later lender Klarna is set to price its long-awaited US IPO later Tuesday night, New York time. Klarna and some of its investors plan to sell 34.3 million shares at USD 35 to USD 37 apiece, with more than 80% sold by early backers. The issue could raise up to USD 1.27 billion and fetch a valuation of nearly USD 14 billion. That would be a 50% discount to Affirm Holdings Inc, which has a market value above USD 28 billion despite generating a similar amount of revenue last quarter. Investor demand has been strong, with Reuters reporting the order book was 15 times oversubscribed on Monday. Founded in 2005, Klarna’s valuation climbed to more than USD 45 billion in 2021 before dropping to USD 6.7 billion in 2022, amid rising interest rates and higher inflation. Shares will start trading Wednesday on the New York Stock Exchange under the symbol KLAR. (Bloomberg)(Reuters)

6.

Succession planning: Australian fund managers Perpetual and L1 Capital lined up for discounted shares in News Corp after Lachlan Murdoch struck a deal to buy his oldest siblings out of the family trust and cement his control of the family empire. The settlement triggered a secondary share sale of News Corp voting shares underwritten by Morgan Stanley on Monday evening into Tuesday morning. Sydney stockbroker Angus Aitken acted as a capital markets adviser to the Murdoch-controlled publishing giant. The funds that participated in the public offer include Perpetual, L1, Soul Patts, and Wilson Asset Management, according to people familiar with the situation. However, it remains unclear how many shares were ordered, and whether shares have been allocated to all of the funds, one of the people said. The public offer was triggered by a deal struck between Lachlan Murdoch and his three oldest siblings, to buy them out of the family trust. (Capital Brief)

7.

Merger of equals: Anglo American is merging with Canada’s Teck Resources, creating a USD50 billion ($75.6 billion) copper-mining giant in one of the biggest mining deals in over 10 years. Anglo will pay 1.3301 shares for each Teck share, representing a 17% premium to the Canadian miner’s closing price on Monday, according to Bloomberg. Anglo, with a market capitalisation just under GBP27 billion, will issue a special USD4.5 billion dividend to its own shareholders ahead of the combination, meaning the effective premium will be just 1%. The companies described the deal as “a merger of equals.” London-listed Anglo will own 62.4% of the combined group with Teck shareholders owning the rest. ‘Anglo Teck’ will be headquartered in Vancouver and retain its primary London listing. Shares in Anglo rose as much as 9% on the news, while Teck’s US-listed shares surged over 14% in morning trading in New York. (Anglo American)(Teck)(Bloomberg)(FT)(Capital Brief)

8.

Cause célèbre: Dutch chip equipment maker ASML agreed to invest EU1.3 billion ($2.31 billion) in startup Mistral AI, becoming the French company’s largest investor with an 11% stake. Mistral said that it raised a total of EU1.7 billion in its Series C round, valuing the two-year-old startup at close to EU12 billion, including the new funds raised. The new valuation more than doubles the USD6 billion valuation it achieved in May last year. A statement released by ASML says the companies will integrate Mistral’s AI models across the ASML product portfolio, as well as its research, development and operations units. ASML, with a market capitalisation over USD300 billion, will also gain a board seat on Mistral’s strategic committee through finance chief Roger Dassen. Existing investors DST Global, Andreessen Horowitz, Bpifrance, General Catalyst, Index Ventures, Lightspeed and NVIDIA also participated in the round. (Mistral AI)(ASML)(WSJ)(Capital Brief)