MORNING NEWS

The Federal Reserve approved a quarter-point interest rate cut Wednesday, the first in nine months, with officials judging that recent labor-market softness outweighed setbacks on inflation. A narrow majority of officials penciled in at least two additional cuts this year, implying consecutive moves at the Fed’s two remaining meetings in October and December.

Nestlé said Chairman Paul Bulcke would step down after the Swiss giant’s abrupt ouster of former Chief Executive Laurent Freixe earlier this month. The maker of Nescafe coffee and Purina pet food said Tuesday that Pablo Isla would replace Bulcke as chairman effective Oct. 1, earlier than planned. Bulcke had overseen a probe that weeks ago led to Freixe’s firing over what the company called an undisclosed romantic relationship with a direct subordinate that breached the group’s code of conduct.

Shares of CoreWeave (+7.6%) were rising Monday after the cloud-service provider revealed it has a $6.3 billion cloud-computing deal with Nvidia. As part of the agreement, Nvidia is obligated to purchase any unsold cloud-computing capacity through April 13, 2032, if CoreWeave’s data centers aren’t fully utilized by its own customers. Nvidia also supplies graphics processing units, or GPUs, to CoreWeave and owns around 6.6% of the cloud provider’s stock as of June 30.

Fitch Ratings downgraded the French government’s credit rating on Friday, a warning sign for investors days after the ousting of the country’s prime minister who failed in his bid to bring down the ballooning budget deficit. Francois Bayrou lost a confidence vote this week after he proposed plans to slash 44 billion euros, or $51.8 billion, from the annual budget. The deficit reached 5.8% of domestic output last year, well above the 3% limit under European Union rules. President Emmanuel Macron later tapped Sebastien Lecornu, a centrist former defense minister, to replace Bayrou and try to break the deadlock in France’s fractured legislature. He is the fifth prime minister since Macron was re-elected in 2022. Fitch’s credit rating on French debt is now A+ with a stable outlook, from AA- previously, seven notches above junk. Fitch last downgraded France’s ability to pay its debts on time in April 2023, but gave it a negative outlook in October 2024. France’s debt continues to grow amid the political impasse, having reached 114% of gross domestic product. The country spends more paying interest on debt than on defense.

Adobe raised its fiscal-year outlook for the second time this year, but investors remain uncertain that the company can grow into the artificial-intelligence powerhouse it wants to be. “The clear question right now in investors’ minds is: ‘How is AI going to get infused into our workflows, and maintain the durable differentiation that Adobe has had?'” David Wadhwani, Adobe’s president of digital media business said. “I think that this quarter is a great example of exactly that.”

OpenAI signed a contract with Oracle to purchase $300 billion in computing power over roughly five years, people familiar with the matter said, a massive commitment that far outstrips the startup’s current revenue. The deal is one of the largest cloud contracts ever signed, reflecting how spending on AI data centers is hitting new highs despite mounting concerns over a potential bubble. The Oracle contract will require 4.5 gigawatts of power capacity, roughly comparable to the electricity produced by more than two Hoover Dams or the amount consumed by about four million homes.

OpenAI is working with Broadcom to develop custom artificial-intelligence chips, a move that could help alleviate the shortage of powerful processors needed to quickly train and release new versions of ChatGPT. Broadcom’s shares surged nearly 11% in Friday trading after the company announced during an earnings call on Thursday that it had signed up a fourth major AI developer as a customer, and that this new customer had placed a one-time order worth $10 billion for AI server racks using the Palo Alto-based firm’s chips.

Elon Musk’s SpaceX is writing its biggest check ever to expand its foothold in the mobile-phone business. SpaceX said Monday it would pay $17 billion for the rights to use some of EchoStar’s valuable spectrum for cellphone service. The deal with EchoStar includes $8.5 billion in cash and up to $8.5 billion of SpaceX stock for two chunks of valuable U.S. wireless licenses and related domestic and international rights to beam signals from space.

OpenAI is working with Broadcom to develop custom artificial-intelligence chips, a move that could help alleviate the shortage of powerful processors needed to quickly train and release new versions of ChatGPT. Broadcom’s shares surged nearly 11% in Friday trading after the company announced during an earnings call on Thursday that it had signed up a fourth major AI developer as a customer, and that this new customer had placed a one-time order worth $10 billion for AI server racks using the Palo Alto-based firm’s chips.

Salesforce’s light sales outlook and investor concerns about artificial-intelligence returns weighed on its shares, despite higher-than-expected revenue and profit in the second quarter. The customer-relationship management platform said Wednesday that it expects revenue in the current third quarter to be $10.24 billion to $10.29 billion, while Wall Street was looking for $10.29 billion. Adjusted earnings guidance was in line with estimates. Shares fell 5.6%, to $242.15, in after-hours trading. At the close, the stock was down 23% this year.