Wall Street drops as regional bank concerns resurface

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

1.

Financial drag: US stocks fell as financial shares dragged markets and regional bank concerns resurfaced. The S&P 500 was down 0.7% in late afternoon trading, led by a 2% fall in financials and a 3.5% slide in insurers. That was after Zions Bancorp and Western Alliance disclosed losses on loans tied to alleged fraud. Oracle rose after giving analysts details on margins on AI infrastructure, while TSMC raised its 2025 revenue outlook on AI demand. In more corporate reports, Charles Schwab hit a record profit that beat earnings estimates, India’s Infosys lifted revenue guidance, and France’s Pernod Ricard missed sales expectations, due to weak demand in China and stock reductions in the US. Meanwhile, Bloomberg reported Apple is preparing a touchscreen MacBook Pro, citing unnamed sources. Elsewhere, Federal Reserve governor Christopher Waller said officials can continue lowering rates in quarter-point steps to support a weakening labour market, while Trump-aligned economist Stephen Miran continued to call for a larger cut. (Bloomberg)(WSJ)(Reuters)

2.

Austr(AI)lia’s plan: Labor invited local tech companies and senior figures from the union movement to a series of briefings last month as the government works to finalise a national framework aimed at driving local investment in AI. Held over several weeks and overseen by Industry and Innovation Minister Tim Ayres, the briefings brought together stakeholders to discuss Australia’s approach to AI, sources told Capital Brief. The snap consultation canvassed a range of issues, including whether the government should support local efforts to build capital-intensive large language models and the implications of its plans for the labour market. Tech executives, industry bodies, unions and civil society groups participated in the meetings, which will feed into the government’s National AI Capability Plan that Ayres aims to deliver by the end of the year. The plan was first announced by Ayres’ predecessor, Ed Husic, in December last year. (Capital Brief)

3.

Charged critics: The US Justice Department is expected to ask a grand jury to indict former national security adviser John Bolton, financial media reported citing unnamed sources. The reported charges relate to Bolton’s alleged mishandling of classified material, following FBI searches of his Maryland home and Washington office in August. Agents recovered documents marked “confidential” referencing weapons of mass destruction, along with folders labelled “Trump I–IV” and a binder titled “statements and reflections to Allied Strikes”, court records show. If indicted, Bolton is expected to surrender and appear in federal court in Greenbelt, Maryland, on Friday. He would be the third prominent Trump critic recently indicted, after James Comey and Letitia James. Bolton became a vocal opponent of Trump after serving in his administration and publishing a 2020 memoir calling him unfit for office. The case, first opened under Biden then dropped, has been revived under Maryland-based career prosecutor Thomas Sullivan. Bolton denies wrongdoing. (Capital Brief)(Reuters)(Bloomberg)

4.

Fund IV raise: French private equity firm Ardian raised a record USD20 billion ($30.74 billion) for its flagship infrastructure platform, which is set to invest predominantly in European opportunities. Ardian said that its latest fund, Ardian Infrastructure Fund VI, reached its hard cap of USD13.5 billion. The platform also includes co-investments alongside the fund, marking the largest-ever fundraising for the strategy. The vehicle is 90% larger than Ardian’s predecessor fund, which raised €6.1 billion in 2019. The fund which primarily targets long-term assets in energy, transport and digital infrastructure attracted ten new Australian investors which accounted for 8% of the fund, not including co-investment, or around USD900 million. The number of US investors more than doubled, accounting for 14% of the fundraising. Ardian CEO Mathias Burghardt told the AFR that large Australian institutional investors were among the standout contributors. “Australian LPs (limited partnerships) are very sophisticated, particularly when it comes to infrastructure investing.” (Ardian)(AFR)(Capital Brief)

5.

Software stands: Salesforce shares jumped after the company projected more than USD60 billion ($92.5 billion) in annual revenue by fiscal 2030, which is 58% more than the USD37.9 billion it reported its last fiscal year (ending January). The forecast, which it said excludes any contribution from its planned USD8 billion acquisition of data-management company Informatica, followed a slowdown to single-digit growth amid fears customers were shifting budgets away from software giants and into AI tools from startups. Chief financial and operating officer Robin Washington called the idea that application software is dead a “myth”, and said double-digit growth is expected to return within 12 to 18 months. The company also announced a USD7 billion share buyback and forecast at least USD41.3 billion in revenue for fiscal 2026. About 12,000 customers are using its Agentforce AI tool, which automates early-stage and customer service workflows. (Capital Brief)(Salesforce)(Bloomberg)

6.

Uber training: Uber launched a US pilot that pays some drivers and couriers to help train AI models by completing digital tasks such as uploading photos, recording audio clips or submitting documents through the Uber driver app. The new “digital tasks” job category, announced at Uber’s Only on Uber event in Washington DC, gives drivers more ways to earn during downtime, it said in a statement. Chief product officer Sachin Kansal told Bloomberg the tasks are designed to be completed on a phone, take just minutes and will vary in pay depending on complexity. For example, uploading a Spanish-language menu could reportedly earn up to USD1 ($1.54), according to The Verge. The program follows testing in India, coming as Uber expands its AI Solutions business and amid rising concerns over job security from autonomous vehicles. Uber has between 8.5 and 9 million drivers on the ground globally, Kansal said. (Capital Brief)(Uber)(The Verge)(Bloomberg)

7.

Big Deel: Human resources software startup, Deel, secured USD300 million ($461.37 million) in a new fundraise, despite being embroiled in a headline-snatching scandal earlier this year. The raise, led by Ribbit Capital and including Andreessen Horowitz and Coatue Management, values the company at USD17.3 billion. In April, Deel reached a USD12.6 billion valuation when General Catalyst and Mubadala bought USD300 million in shares from early investors in a secondary transaction. In March, Deel rival Rippling filed a lawsuit accusing Deel Chief Executive Officer Alex Bouaziz of hiring a Rippling employee to spy on the company. Deel then returned fire by filing its own lawsuit, which accused Rippling of defamation. The controversy has not scared investors away from either company, with Rippling raising USD450 million at a USD16.8 billion valuation in May from investors including Goldman Sachs and Baillie Gifford. Deel and Rippling share a backer in Coatue. (Capital Brief)(Deel)(FT)

8.

Spark spread: Founder of Rewiring America and Rewiring Australia, Saul Griffith, delivered a candid account of how far the world has come in electrifying homes and small businesses, but cautioned that unless heavy industry was also given incentives to change, countries like Australia and the US would miss their climate targets. Addressing the Investor Group on Climate Change, Griffith drew heavily on his background founding more than 20 startups in Silicon Valley, including Otherlab, which involved early meetings with OpenAI’s Sam Altman. “Sam had just met with Elon Musk and it was the founding day of a little kind of startup called OpenAI.” Altman said: "I think the problem is that there’s no differentiation in venture capital…the only way to change that game now is [using] evergreen funds that invest in the inevitable." For Griffith, that “inevitable” comes down to the so-called 'spark spread' — the price of an electricity contract minus the price of a gas contract. (Capital Brief)