The 10-year Treasury sits at its highest since early 2025 as hike odds jump to the mid-30s, the White House puts its name on the Moonshot distillation case, and South Korea signs $950 billion in AI supply deals.
Seven.
The votes needed to move the Fed, out of twelve. The chair has not signaled which way he leans. Bianco Research counts five to hike. That is two short. Two dissents are expected either way.
The 10-year Treasury yield sat at 4.678% Friday, near a decade high.
The 30-year held above 5%. Hike odds for Wednesday’s rate decision jumped to the mid-30s from 13% a week ago.
Trump paused a two-week Iran strike campaign Friday. The military was poised to launch. Diplomacy re-emerged as an option.
The White House named Moonshot AI and Anthropic's Fable in an official distillation allegation Wednesday.
South Korea signed $950 billion in AI supply deals Friday.
SpaceX (SPCX) reports August 4.
PMD LENS
The Fed meets Tuesday and Wednesday against an inflation backdrop that shifted twice in five days. Oil crossed above $90 Thursday. Trump paused the strike campaign Friday. WTI traded down to $82 pre-market. Both directions of the framework are live inside the same 48-hour window heading into the vote.
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- Bianco Research: Warsh could support a hike and the vote could be 10-2.
- General Dan Caine warned the White House that US Patriot interceptor stocks are declining.
- Netanyahu meets Trump Tuesday, the same day the Fed meeting opens.
- Anthropic said Chinese labs distilled Fable on an "industrial scale" using 24,000 fake accounts and 16 million exchanges.
- Anthropic did not sign Friday's open-source AI letter with Nvidia (NVDA), Microsoft (MSFT), Meta (META), and 20 other companies.
The Discount Rate Just Became a Coin Flip.
The Bond Market Signal
The bond market is talking. The 10-year Treasury yield close Friday at 4.678%, the highest since early 2025. The 2-year pushed above the Fed's 3.75% ceiling. The 30-year held above 5%. Traders now put Wednesday's hike odds in the mid-30s, up from 13% a week ago. Paul Christopher of Wells Fargo: "Uncertainties are piling up."
The Warsh Regime
This is not the old Fed. "Warsh is not the guy who drives the bus anymore," says Jim Bianco of Bianco Research. There are 12 voters now, and the chair is just one. Bianco counts five votes to hike, two short of seven.
The Trump Iran Pause
Then the oil math moved. Trump paused a two-week strike campaign against Iran Friday to revive diplomacy. The military was ready. That pause could reverse $15 to $20 of the oil spike before Wednesday. Netanyahu meets Trump Tuesday.
The Legibility Read
This is not a rate call. It is a legibility problem. The discount rate under every private mark is now a coin flip, set by a chair nobody can read. Term premium widens and clearance slows when the risk-free rate stops being knowable. Pressure-test any position that needs a September cut. Rerun it with the 10-year near 4.7% through year-end.
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SIGNAL 1: The White House Put Its Name on the Distillation Case
Last week this was a threat. Now it is an accusation with names. White House advisor Michael Kratsios said Moonshot AI distilled Anthropic's Fable to build its K3 model. Bessent said the US could sanction Chinese labs. Kratsios named one. Anthropic, three months from a public filing, has said nothing.
The Sanctions Predicate
An allegation is narrative. A Treasury designation is enforcement. A formal sanction naming Moonshot before September's AI talks lands inside Anthropic's filing window. Check what in your book is exposed to that timing, not the outcome.
SIGNAL 2: SpaceX's August 4 Print Tests an Unspoken Agreement
The carriers are betting on physics. SpaceX wants into their market. Since the May filing, AT&T (T), Verizon (VZ), and T-Mobile (TMUS) have slid 8% to 10%. The three share an unspoken agreement. Deny SpaceX a network deal and the threat stalls. Verizon's Dan Schulman called it "not possible because of physics." August 4 brings its first earnings and its first lockup, up to 911.5 million shares.
The Gatekeeping Test
An oligopoly priced on physics is priced on cooperation. It holds until one carrier breaks ranks. One MVNO deal in the August 4 window turns the agreement into a broken one.
SIGNAL 3: The Infrastructure Lane Got a $950 Billion Anchor
The AI trade split in two last week. This weekend the infrastructure side got its number. South Korea signed $950 billion in AI supply deals Friday. SK Hynix and Nvidia run more than $500 billion. Samsung and Broadcom (AVGO) run up to $200 billion through 2030. Amodei confirmed Anthropic deals with both Korean makers. This is not a platform trade. It is a supply lock-in with a dollar figure.
The Supply Lock Test
When supply locks years out, the marginal buyer pays up or waits. A SK Hynix or Samsung memory confirmation on this week's hyperscaler calls makes Micron the fallback, not the swing supplier. Check where your AI exposure sits.
The Verdict Is In for AI Stocks in the second half of 2026
The AI trade that made the Mag 7 soar is starting to crack.
Overpriced giants like Nvidia, Tesla, and Amazon are facing slowing returns — just as smaller, lesser-known names are positioning to take market share.
Waiting could be costly.
Three under-the-radar AI stocks are already showing the potential to outperform the Mag 7 in the second half of 2026.
Make sure these alternatives are on your radar before markets open tomorrow.
Fed decision (Wed): Watch whether Warsh cites the BEA core-PCE revision as cover for a hold. That makes it data dependence, not a hawkish turn.
Bond market (this week): A 2-year still above the 3.75% ceiling on a hold means the market has the Fed offside.
Iran (Tue): A named diplomatic opening before Netanyahu meets Trump pulls $15 to $20 off oil.
Moonshot (by September): A Treasury designation naming Moonshot AI turns the allegation into enforcement.
SpaceX (Aug 4): Any carrier confirming a network or MVNO deal breaks the oligopoly's physics defense.
Memory (this week): A SK Hynix or Samsung confirmation on a hyperscaler call reprices Micron.
Capital Discipline
A discount rate should be the one fixed input in a model. This week it is not. The risk-free rate sits at a multi-month high and the chair setting it will not tip his hand. That is the structural fact under every AI IPO on the calendar, every hyperscaler capex projection, and every private mark in every fund heading into Q3. The market is not pricing a rate. It is pricing a range. The July 29 statement narrows it. Or widens it.
PMD Reposition
The Fed decides Wednesday against a bond market at multi-year highs, an oil market that shifted twice in five days, and a chair whose position on hikes has not surfaced. The White House put its name on the distillation allegation the same week Anthropic prepares to file. South Korea signed $950 billion in AI commitments heading into the biggest hyperscaler earnings week of the year. The July 29 statement, the August 4 SpaceX lockup, and the September AI talks now sit inside the same decision window.
