Good morning! The good earnings vibes this week collided with Hormuz woes and a memory chip sell-off that came even amid strong results from semiconductor equipment maker ASML.

Still, the balance tipped to the positive, with major indexes closing in the green on Wednesday as the S&P 500 (^GSPC) gained 0.4%, the Nasdaq (^IXIC) 0.6%, and the Dow (^DJI) 0.3%.

What we're watching Thursday: Earnings season continues with another big day, headlined by Netflix (NFLX). We're also watching Taiwan Semiconductor Manufacturing Company (TSM), UnitedHealth Group (UNH), GE Aerospace (GE), and retail sales data.

Yahoo Finance Morning Brief is written by Ethan Wolff-Mann.

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A happy Jamie Dimon. (Drew Angerer/Getty Images)

After the initial crop of big bank earnings showed a massive windfall, day two saw Morgan Stanley (MS) pull in a 58% boost in profit thanks to the AI trade.

CEO Ted Pick called the quarter's harvest "exceptional."

But what's better than an exceptional quarter filled with tons of profits from trading and dealmaking? The idea that it seems set to continue.

The optimism on Wall Street has been palpable this week in earnings calls. And for good reason: These numbers were done with the big whales still on the horizon.

Anthropic, which has reportedly begun investor meetings in preparation for its public markets debut, is penciled in for October, according to Bloomberg.

After that, DeepSeek is said to be preparing for a 2026 IPO. And in 2027 (probably), OpenAI's debut leaves even more to look forward to.

Even if SpaceX has now dipped below its IPO price after hitting an all-time low, IPO morale remains high.

Federal Reserve Chairman Kevin Warsh testifies during the Senate Banking, Housing and Urban Affairs Committee hearing titled "The Semiannual Monetary Policy Report to the Congress," in Dirksen building on Wednesday, July 15, 2026. (Tom Williams/CQ-Roll Call, Inc via Getty Images)

Tuesday brought some of the best inflation news in years, as the Consumer Price Index showed prices actually falling, not just growing less quickly. 

Wednesday's Producer Price Index, the wholesale version that uses input costs, made it two in a row as that metric showed its biggest drop in 14 months, largely thanks to energy.

This inflation data has meaningfully changed the market's collective view about rate cuts. According to the FedWatch tool, the chances rates will continue to be set at current levels have nearly doubled from 15% to 30% over the past two days. 

If you can't really get a read on Fed Chairman Kevin Warsh, the FedWatch barometer is at least something you can read.

But there's an important thing to note about these numbers, which come from Fed futures data: They represent an average of two possibilities that's less of a possibility in and of itself.

As our friend from DataTrek, hedge fund veteran Nicholas Colas, put it when the Fed futures data showed one or two hikes, "this market is likely reflecting two very different possibilities. [Multiple hikes], or the Fed will not be raising rates at all."

It's not like a weather forecast, where a 20% chance of rain may actually mean it might drizzle a little bit. Something to keep squarely in mind when you look at the percent chances. 

Shareholders attend the Berkshire Hathaway Inc annual shareholders' meeting, the conglomerate's first since Warren Buffett stepped down after 60 years as chief executive and was succeeded by Greg Abel, in Omaha, Nebraska, U.S., May 1, 2026. (REUTERS/Brendan McDermid)

Warren Buffett has significantly retreated from corporate leadership in a public sense, handing over the reins to Berkshire Hathaway CEO Greg Abel, his successor, at the recent annual meeting.

But in an appearance on CNBC this week, Buffett said he was still very much involved, with Buffett and Abel evaluating each other's opinions and only making decisions with the approval of the other.

One of his recent moves: Berkshire's big Alphabet stock pickup. Buffett said he was wrong to overlook Alphabet before its massive AI spending, but is still feeling good even with its rough expenses column.

"They're more likely to be a winner based on their record than probably 90% or 95% of what gets merchandised through Wall Street," Buffett said in the interview, which also touched on his relationship with Bill Gates after the latter's Jeffrey Epstein scandal and why he isn't giving any more money to the Gates Foundation.

Chairman U.S. Sen. Tim Scott (R-SC) and ranking member Sen. Elizabeth Warren (D-MA), speak during the testimony of Federal Reserve Chair Kevin Warsh at a Senate Banking, Housing, and Urban Affairs Committee on Capitol Hill, Washington D.C., U.S., July 15, 2026. (REUTERS/Nathan Howard)

Wednesday marked day two of Kevin Warsh's first foray to Congress as Fed president. The vibe was markedly antagonistic as Democrats continued the pointed criticism that marked the confirmation hearings.

As our Washington Correspondent Ben Werschkul put it, it's a preview of the months to come. 

The taciturn Fed chairman has made saying little a key element of his tenure at the central bank, and this was the main way he answered the Democratic senators who asked questions about his relationship with the White House and AI task force led by billionaire VC Marc Andreessen.

While Jerome Powell largely enjoyed Congress's bipartisan approval and the White House's disapproval, the Warsh experience is the opposite, especially with the task force choice as an early move.

But Warsh showed the world that his taciturn nature isn't just about tipping the Fed's hand. All he gave the senators was a vague hawkish sense and the promise to be independent.

As Yardeni Research president Edward Yardeni said in a note, "in Washington, the arrival of President Donald Trump's money man has gone better than feared."

On the other hand, some sparring might have revealed just a bit more.