Good morning! And welcome to another Fed day. The forecast shows very strong chances of a hike, and investors are fastening their seatbelts for the bout of market turbulence that first-cycle hikes typically leave in their wake.

On the other hand, the stock market might welcome some inflation law and order from the Fed. We'll see.

In the lead-up on Wednesday, the S&P 500 (^GSPC) fell 0.5%, the Dow (^DJI) 0.6%, and the Nasdaq (^IXIC) 0.8%.

What we're watching Wednesday: The schedule you need to know is 2 p.m. ET for the rate decision and dot plot, and 2:30 p.m. ET for Chairman Kevin Warsh's press conference.

Aside from that, we'll be watching retail sales data and Lennar's results for insights into homebuilding.

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

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(Photo by Li Yuanqing/Xinhua via Getty Images)

As surging US Treasury yields start to finally spook investors, the Warsh Fed is poised to perform the central bank's first rate hike since 2023 after the war with Iran derailed the inflation progress.

After last week's inflation data and fatalistic commentary from the White House economic adviser Kevin Hassett — and squawking bond market — the CME's futures market sees a 92% chance of a hike.

We'd be remiss not to note that, of course, anything's possible. (Have you read the news?) Our colleague Jennifer Schonberger reminds us that a few FOMC governors do not appear entirely convinced, and the beauty of a meeting before the vote is that minds can be changed and votes swayed.

The decision, which comes at 2 p.m. and will include a dot plot of FOMC member projections, will keep us refreshing bond yields on Yahoo Finance (^TNX) and social media posts out of the White House — two camps that may react strongly if recent history is any guide.

And though the result seems a foregone conclusion, Warsh's tone and commentary will continue to be a key story as the market gets to know him better.

Make sure you fire up Yahoo Finance at 2:30 p.m. ET to watch the press conference and keep our live blog open in a tab.

Dario Amodei and Sam Altman have been talking about this since at least 2023, as this photo shows. (Photo by Leon Neal/Getty Images)

The biggest names in AI have agreed to work together as industry-wide calls for greater safety measures prompted a rethink on the rapid development of the technology. 

Chris Lehane, the global policy chief for OpenAI, said Tuesday that the company is working on steps to address AI safety, alongside Anthropic and Google DeepMind, Bloomberg reports. 

The efforts have been underway for several weeks, Lehane said, just as public concern over economic and security threats posed by AI has reached an inflection point. 

A recent wave of warnings from current and former employees as well as a public call for a collective slowdown from Anthropic CEO Dario Amodei has recentered AI anxiety, turning long-standing concerns into a full-fledged crisis moment. 

That rival firms have entered into a truce appears to have raised the stakes, signaling to tech consumers and the broader public that joint action is required. Amodei’s plea to slow AI development was endorsed by OpenAI CEO Sam Altman and SpaceXAI CEO Elon Musk.

But such coordination, even for supposed public safety aims, has already drawn pushback. AI critics see ulterior motives at play, while some regulators are skeptical of the team-up on competition grounds. 

Federal Trade Commission Chair Andrew Ferguson said Tuesday he would be “deeply suspicious” of AI companies requesting an antitrust exemption to work together. 

People are feeling worried. Do you feel any better after this? Let us know.

In this handout photo provided by SpaceX, a Tesla roadster launched from the Falcon Heavy rocket with a dummy driver named "Starman" heads towards Mars. (SpaceX via Getty Images)

For investors who want in on the Musk trade, this year’s SpaceX IPO offered some diversification. If cars aren't your jam, how about rockets?

But the sharing among the firms of personnel, technology, and Musk himself has rekindled the idea of merging his major enterprises. And it’s an idea that the world's richest man is entertaining once again.

"With all this collaboration, on so many levels, who can imagine what action one might take when there's so much close collaboration in so many areas," the multi-CEO at the All-In Summit earlier this week.

The companies are deeply intertwined, and, as this wild image we found in the archives shows, a Tesla has been to space. Financially, Tesla holds an equity stake in SpaceX and, earlier this year, entered a "framework agreement" governing future collaboration. Technology moves back and forth, too. SpaceX buys Tesla batteries, energy products, and Cybertrucks. And Tesla weaves SpaceX AI tech back into its own products. Grok is being embedded in Tesla vehicles.

It's not the first time Musk has spoken of this possibility. Reports suggested he had openly discussed the possibility of a merger prior to SpaceX's June public debut. 

The topic came up during SpaceX's Q2 earnings call, but Musk stopped short of confirming anything, while hinting that the possibility is still in play. 

Merging the two would give retail investors fewer investment options in the Musk empire, forcing the market to buy the lot — or walk away. But the new combination, and whatever synergies management would sell to investors, could very well be its own reason to get in on the action.  

See what else is trending on Yahoo Finance.

Intel Corporation CEO Lip-Bu Tan (R) watches as US President Donald Trump speaks during a Rose Garden Club event on the Rose Garden of the White House in Washington, DC, on July 6, 2026. (Mandel NGAN / AFP via Getty Images)

A core tenet of free-market thinking is that the government shouldn’t be in the business of choosing winners and losers. But when the White House does dabble in industrial policy, you’d expect its chosen companies to be the winners.

By and large, they aren't. While investing alongside the White House might have seemed like a water-tight get-rich-quick strategy, the portfolio has a surprisingly poor report card.

President Trump often touts his administration's investment in Intel (INTC) — specifically the outsized gains in the chipmaker's share price since the deal was announced.

But the fortunes of more than a dozen other public companies in the US government's growing portfolio tell a much less flattering story.

Stocks in companies that have struck a deal with the Trump administration have often followed a common trajectory: a significant bump around the formal announcement, high volatility afterward, and then gains often given back almost as quickly as they came.

In fact, most companies are now in the red compared with their initial prices. A Yahoo Finance analysis shows that 14 of the 17 public companies that accepted government involvement ended this past week with share prices lower than the day after the deal was announced.

For investors who managed to front-run the government investments, the stocks are still mostly a losing proposition. Returns for 11 of the 17 companies, when compared to 10 trading days before the formal announcement, are lower now.

"It certainly looks like we're seeing a sugar high," noted Tad DeHaven, a policy analyst for the Cato Institute who has studied the government stakes and has been critical of the Trump administration's approach.

"There looks to be a short-term benefit … but in the long term it comes down to fundamentals," he said.