July 31, 2026

Presented By

Expecto Patronum, and happy 46th birthday to the character Harry Potter. Time has done a number on your favorite boy wizard—he’s got a Butterbeer belly and is seeking more from life than just the Snitch. For further reading:

Harry Potter and the Thermostat Adjustment
Harry Potter and the Signed Text Message
Harry Potter and the Loud Sigh Before Sitting Down
Harry Potter and the Forgotten Password

—Sam Klebanov, Dave Lozo, Matty Merritt, Adam Epstein

In today’s newsletter, we’ll get into US GDP growth slowing, Jersey Mike’s going public, and the burgeoning college sports jersey patch wars.

Markets

Nasdaq

25,122.18

+2.78%

S&P

7,437.63

+1.66%

Dow

52,208.06

+1.19%

10-Year

4.663%

+4.0 bps

Bitcoin

$64,713.56

+2.01%

Microsoft

$451.1

+15.51%

Data is provided by

*Stock data as of market close, cryptocurrency data as of 5:00pm ET. Here's what these numbers mean.

Markets: Stocks soared yesterday as a tech rally shifted the bad vibes from earlier in the week. The rise was fueled by Microsoft, which went absolutely berserk, spiking more than 15% in the largest-ever single-day jump in a company’s market value after impressing investors with its latest earnings report.

JUST KEEP SWIMMING

US GDP slows, but consumers are still consuming

Illustration of a snail that looks like the US flag, with a red and white striped shell and blue body covered in stars.

Nick Iluzada

The US economy is growing at a slower pace, but it’s not letting anything knock it down. GDP growth sank to 1.5% last quarter, the government estimated yesterday, down from 2.1% in the previous quarter and below the 1.8% that economists expected.

But, after stripping out volatile government spending and trade numbers, the US economy still grew a relatively healthy 3.9% despite jitters from the Iran war—largely because Americans kept shopping:

Growth in consumer spending, aka the mighty fuel of the US economy, accelerated to 3.2%, from 0.5% in Q1.
Analysts say that household budgets were aided by bigger-than-usual tax refunds this spring and gas price declines in June stemming from a ceasefire in the Iran war, which has since unraveled.

A separate government report showed that cheaper gas contributed to overall consumer prices falling in June by 0.1% for the first time in six years, though the annual inflation number of 3.7% was still above the Fed’s goal of 2%. Analysts warn that Americans’ purchasing power might run out of steam this quarter as resumed fighting in Iran reignites inflation.

The AI splurge economy

Much of the economic expansion was driven by growth in business investment, courtesy of companies spending big on AI infrastructure. More than half of the overall GDP growth in Q2 was driven by AI-related investments like data center construction, according to an estimate by Stripe’s Chief Economist Ernie Tedeschi.

However, some corporate AI spending might have actually dampened the official GDP number, since many chips and other supplies came from abroad, accelerating import growth.

Looking ahead: The government will likely revise its Q2 growth estimate in the coming weeks, and the Federal Reserve will be watching closely as it weighs whether to raise interest rates in September to fight stubbornly high inflation.—SK

Sponsored By PwC

Lights, camera, AI?

To be (AI) or not to be (AI), that is the question.

The entry of artificial intelligence into moviemaking has been…you guessed it…dramatic. And The Intelligence Shift is ready to discuss the shift.

Early concerns about intellectual property theft and actors and crew being replaced have filled the discourse. But a new picture is beginning to cue up.

This episode was filmed parallel to the 25th annual Tribeca Film Festival, which has admitted the first AI film, Dreams of Violets, just this year.

Host Dan Priest is joined by Bryn Mooser, cofounder and CEO of Asteria Film. As an Emmy- and Peabody-winning filmmaker, Bryn brings deep knowledge to developing new filmmaking tools powered by AI.

Here’s your backstage pass to the episode.

World

Tour de headlines

Josh Edelson/Getty Images

🍎 Tim Cook has hosted his last earnings call as Apple CEO. The tech giant reported fiscal Q3 earnings yesterday, the final check-in with investors before CEO Tim Cook passes the baton to John Ternus on Sept. 1. The results were a mixed bag: Revenue beat expectations on surging iPhone and Mac sales, but supply constraints and weakness in China and in its services business dampened Cook’s going-away party. Ultimately, investors didn’t love what they heard, as the stock fell in after-hours trading. The report puts a dent in what had been a major hot streak for the iPhone maker, whose stock reached a record high earlier this week in part because investors appreciated that it wasn’t spending as much on AI as rivals were.

☁️ Sunny skies for Amazon’s cloud unit. Like Apple, Amazon reported quarterly earnings yesterday. Unlike with Apple, investors were deeply pleased with Amazon’s showing. The company’s stock jumped 9% in after-hours trading after it said that sales of its cloud computing unit, Amazon Web Services, grew the fastest since Q4 of 2021. The growth was so impressive that investors didn’t seem to mind that Amazon also hiked its AI spending projection for 2026 from $200 billion to $220 billion—an act that has recently spooked investors, who are worried that tech companies are splurging too much on data centers without enough return on that investment. But for one quarter, at least, Amazon’s revenue wins kept investors cheery.

⚽ UEFA nations are boycotting FIFA over its private investment plan. European countries are doing what Italy has unintentionally done since 2014: boycotting the World Cup. The governing body, which organizes soccer throughout Europe, announced that its 55 member nations will not participate in FIFA competitions—including the 2030 World Cup—unless FIFA abandons its plan to sell equity in the tournament to private investors. The soccer world plunged into turmoil earlier this week when FIFA President Gianni Infantino revealed the arrangement, which involves Josh Kushner, the brother of President Trump’s son-in-law, Jared Kushner. According to the Associated Press, Infantino’s controversial plan could threaten his 11-year presidency of FIFA.—AE

SANDWICH PICK

Jersey Mike’s gets that bread from its IPO

Kevin Carter/Getty Images

Jersey Mike’s debuted on the New York Stock Exchange yesterday, the culmination of a relatively quick turnaround from its sale to private equity firm Blackstone last year.

The purveyors of the Big Kahuna Cheese Steak priced its IPO at $23 per share to raise ~$1 billion, making it the largest IPO in the restaurant sector since Krispy Kreme raised $500 million with its 2021 IPO. The newly dubbed JMKE opened lower, at $21, and closed the day down ~6% from its IPO price.

Fast food: PE companies tend to hold for years, but Blackstone fast-tracked the sandwich chain for public trading in 18 months. Blackstone moved so quickly because of Jersey Mike’s rapid growth in recent years and the public’s current voracious appetite for IPOs:

Since 2019, Jersey Mike’s has tripled sales while smoking rival Subway. Per the Wall Street Journal, the average Jersey Mike’s location made $1.36 million in sales last year while Subway averaged $510,000 (although Subway has many more locations).
This year is shaping up to be a record one for IPOs—there has been $146.1 billion of common stock offered in the first six months of 2026 (more than half from SpaceX), which is already more than the combined totals between 2022 and 2025.

Up next: Inspire Brands, the owner of chains that include Arby’s, Buffalo Wild Wings, and Dunkin’, could be the next restaurant operator to go public. It filed confidentially for an IPO in May with the intent to raise $2 billion, per Bloomberg.—DL

reader poll

What is your favorite sandwich chain?

Subway
Jersey Mike's
Jimmy John's
Potbelly
Quiznos
Firehouse Subs
Other

Friday trivia

“baggage” and “PARADROP” are the longest lowercase/uppercase words with what specific trait?

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Answer

“baggage” is the longest possible lowercase word where each letter has a hole in it. “PARADROP” is the longest uppercase word where each letter has a hole in it.

Source: Adam Aaronson via Puzzle a Day

Word of the Day

Today’s Word of the Day is: paradrop, meaning “the delivery of personnel or supplies from an aircraft via parachute.” You were wondering what that meant after reading today’s puzzle, weren’t you? Thanks to Carson from San Antonio for the suggestion. Submit another Word of the Day here.

✳︎ A Note From Verily Me

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Written by Adam Epstein, Sam Klebanov, Dave Lozo, and Matty Merritt

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