Sometimes even a 19-fold increase in profit just isn’t enough. Execs at Samsung Electronics will likely be frustrated about the reaction to the South Korean company’s bumper preliminary earnings report but investors should relax, there’s no reason for alarm to spread.

Samsung shares fell nearly 7% Tuesday despite the memory-chip boom driving a huge profit increase. Shareholders are nervous after a 382% gain in the stock over the past 12 months. The lack of guidance–which will come later in the month with the full results–increases the uncertainty.

Investors fretting over the artificial-intelligence trade might be spooked. Samsung’s local peer SK Hynix has kicked off the process for a U.S. listing, looking to raise $28 billion in fresh capital when it lists American depositary receipts Friday and there are already multiple fund providers planning to facilitate leveraged bets on the ADRs. The concern is that a volatile retail-driven Korean market could spill over into American trading. 

But sharp moves aren’t necessarily indicators of a bubble. The question is whether the AI-driven earnings of companies such as Samsung and its U.S. peer Micron Technology are sustainable. Analysts at the BlackRock Investment Institute note the S&P 500’s Shiller price-to-earnings ratio–a metric that gauges valuations over the long term–has climbed to 40, a level last seen during the dot-com bubble. That seems alarming but it ignores the context of rising earnings expectations. The 12-month forward P/E ratio is a less frightening 21 times.  

“Concluding AI has become a bubble is itself a significant call: it assumes the technology will not generate a lasting breakout in productivity and growth,” wrote BlackRock’s Jean Boivin. 

Whether AI can live up to its promises is the big question and it’s not one a single-day stock drop for Samsung can answer.

—Adam Clark

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Forget AI fundamentals or rockets, SpaceX’s trading on Tuesday is all about technical factors. It’s the day Elon Musk’s rocket and AI company joins the Nasdaq 100 index and that brings potential for stock volatility–but things will likely turn out fine.

• The Nasdaq 100 index is a who’s who of tech giants, and its 100 members had a market value of almost $40 trillion at recent prices. Nasdaq tweaked its rules to fast-track SpaceX’s inclusion because AI companies have become crucial to the broader market.

• Early inclusion in an index could drive volatility, particularly given that only a limited number of shares are trading right now. The Nasdaq is adding SpaceX at a float-adjusted weight that gives it the impact of a $300 billion market-cap company. Its total market capitalization stood at $2.1 trillion as of Monday’s close.

• That’s about 0.75% of the Nasdaq-100 market value. Given that roughly $800 billion is indexed to the Nasdaq-100, passive funds will need to buy about $6 billion in SpaceX stock, according to Barron’s math–or 6% of total available shares.

• Shares have swung wildly since SpaceX’s trading debut last month, although they have rallied lately. That might already reflect the indexation bump. Investors will have to wait to find out.

What’s Next: More stock will be accessible soon. Some 20% of shares become available for trading after the company’s first earnings report, due in a couple of weeks. That can ease indexation pressures.

—Al Root and George Glover

Solstice Advanced Materials isn’t waiting around to create a legacy after being spun off from Honeywell last fall. It just made a $14.5 billion deal that shows it wants in on AI.

• On Monday, the maker of products for advanced cooling solutions and nuclear power said it was buying Element Solutions, a chemicals company. Element shareholders will get 0.5 Solstice share and $10 in cash for every Element share held.

• Both Element and Solstice shares dropped—3% and $15.1%, respectively. There are a couple of reasons why the stocks fell. There is merger arbitrage. Sometimes arbitragers will sell shares of the acquiring company and buy shares of the company being acquired to lock in a spread. The deal values Element at about $44, up roughly 4% from recent levels. And Solstice shareholders might be nervous: It’s a huge deal, struck soon after the Honeywell spinout.

• Solstice CEO David Sewell thinks doubling the company’s size is worth it. Combined, the company will be at the leading edge of secular AI growth trends. It produces products to make semiconductors that are needed to cool and help power AI computers. “The timing is just perfect,” says Sewell. “When you look at the [AI] growth rates over the next five to 10 years, they’re undisputed.”

• To be sure, it’s a transformation deal. The chemical business, which is now Solstice, hadn’t made an acquisition in years while it was part of Honeywell, and it always battled for growth capital with Honeywell’s larger aerospace and automation divisions.

What’s Next: The deal should close in the first half of next year. The combined company should have 2027 sales of about $8 billion and earnings before interest, taxes, depreciation, and amortization, or Ebitda, of $2.2 billion.

—Al Root

Federal Reserve Gov. Christopher Waller is defending the central bank’s practice of providing forward guidance—a stance somewhat at odds with new Chairman Kevin Warsh.

• On Monday, Waller told a monetary policy conference in Rome that he believes “forward guidance can be a valuable tool that has, at times, significantly strengthened policymaking and will continue to be useful.”

• Warsh dropped forward guidance from the Federal Open Market Committee’s June policy statement and his public remarks after the rate announcement. “My view is that financial markets and the real economy work best when you look at what’s happening in the real economy, you make your own judgments,” he told European central bankers last week in Portugal.

• But Waller said he isn’t ready to throw out the practice of forward guidance completely, noting it can be useful but not in all circumstances. It was a hindrance, for example, in 2021 when inflation surged. The Fed had signaled that rate increases were on hold, even though prices were on the rise. “In the end, this restrictive guidance…unnecessarily delayed rate increases.”

• Forward guidance is far different from a reaction function, which is also a practice of central bankers, Waller said. Forward guidance tells what the policy is going to be before getting any data. “A reaction function is saying: Give me the data, plug it in, and I’ll tell you what I’ll do.”

What’s Next: Waller’s defense is noteworthy since it was first from any Fed official since Warsh took the helm. The central bank’s next meeting is July 28 and 29.

—Megan Leonhardt

Kids used to buy Topps baseball cards for the stick of gum inside. Today, it’s for the chance at something one-of-a-kind. And Pokémon cards, sold in packs for $15 each, sit next to scratch-off lotto tickets at New York City bodegas. Opening a pack of trading cards, mental health experts say, is similar to traditional gambling. Every pack holds the promise of a million-dollar find.

• Morgan Stanley valued the collectibles market at $100 billion. Target, Walmart, and Hasbro are beneficiaries of the boom, according to Mizuho, and eBay is up 138% in the four years since it introduced eBay Vault to store and authenticate rare trading cards. But it’s privately held Fanatics that has become the industry’s top dog, which Mizuho estimates will generate $5 billion in collectibles revenue this year.

• The most valuable cards now lie outside the world of sports. A 1998 Pikachu Pokémon card belonging to teen-favorite influencer Logan Paul sold for $16.5 million in February, the most expensive trading card ever sold at auction. In May, Hasbro CEO Chris Cocks said “the trading card category—either this year or next year—will be the biggest single toy and game category, eclipsing building blocks.”

• Trading cards have a major presence on social media, with more TikTok videos than popular collectibles like Labubu dolls and luxury handbags. That’s leading mental health experts to think more about the intersection of collecting and business. Psychotherapist Andrew Tepper sees eight patients who talk about their trading cards. They consider their buying an investment strategy. “And that seems to be a justification for engaging in behavior that looks pretty addictive.”

• The private start-up Whatnot runs a so-called live-commerce platform that is under scrutiny because of trading cards. It runs so-called break streams, which involve hours of a host opening sealed packs of cards. Attorney Paul Lesko has filed 70 claims on behalf of clients who, since April 2021, have spent nearly $250 million on Whatnot and say they have developed a gambling addiction on the platform. “We absolutely reject the characterization in this complaint,” Whatnot said.

What’s Next: Whatnot is starting to attract attention from lawmakers. At a Senate hearing in June on sports betting, New Mexico Sen. Ben Ray Luján, a Democrat, raised points that are similar to Lesko’s arbitration complaints. “I certainly hope these people get put out of business,” Luján said. Whatnot distances itself from the gambling comparisons: “Gambling isn’t allowed on Whatnot, and we strictly enforce this policy.”

—Nick Devor

Coming up with a down payment for a first home is a high bar in places like New York and San Francisco. On top of sky-high prices, first-time home-buyers in these cities can put down six figures—over 20%, data show.

• Just how much a first-timer has to pony up varies dramatically by location: in Detroit, $7,600, or about 5%; in Miami, $42,745, or about 8%; and in San Jose, $250,000, or 22%, according to Rocket.

• Up the road, San Francisco’s $400,000, or 27%, has plenty of buyers dipping into their stock portfolios. “I don’t think I’ve written an offer in the last two years that had less than 30 percent down,” says Damon Knox, sales manager at the San Francisco-based City Real Estate.

• Still, above 20% isn’t the norm. Last year, first-timers typically paid 10%, according to the National Association of Realtors. And a buyer with a loan backed by the Federal Housing Administration, for example, can put as little as 3.5% down.

• Saving for a down payment was one of the most commonly cited hurdles to buying a home in the Realtor group’s 2025 survey. Of 25 first-time buyers, about three had help from mom and dad, according to ICE Mortgage Technology.

What’s Next: First-time home buyers are back. Their share of all home purchases rose to 35% in May, the highest level since June 2020, the Realtor group found. Whether May was a blip will become clearer on Thursday when June numbers are released. If the number stays high, it would be a sign that first-timers are returning after years of high prices and mortgage rate increases.

—Shaina Mishkin

—Newsletter edited by Mel Gray, Patrick O’Donnell, Rupert Steiner