Daily Brew // Morning Brew // Update

May 15, 2026

Happy Friday. Even pro athletes get penalized for clocking in a few minutes late to work. South African golfer Garrick Higgo was assessed a two-stroke penalty for arriving late to his tee time at the first round of the PGA Championship yesterday.

He still rallied to shoot an impressive one-under-par for the day, even with the penalty. That’s kind of like getting yelled at by the dental hygienist for not flossing, but still getting a high five from the dentist at the end of your appointment.

—Dave Lozo, Sam Klebanov, Matty Merritt, Adam Epstein, Holly Van Leuven

In today’s newsletter, we’ll get into:

A new era for the Fed starting today
Honda’s first annual loss ever
Martha Stewart getting into AI

MARKETS

Nasdaq

26,635.22

+0.88%

S&P

7,501.24

+0.77%

Dow

50,063.46

+0.75%

10-Year

4.461%

-2.0 bps

Bitcoin

$81,393.99

+2.16%

Klarna

$16.47

+20.31%

Data is provided by

*Stock data as of market close, cryptocurrency data as of 4:00pm ET. Here's what these numbers mean.

Markets: Stocks blasted Creed and went higher yesterday, thanks to renewed momentum in the AI trade and some optimism around Trump–Xi talks in China. Few had a better day than Klarna, which soared nearly 19% after breaking even for the first time since its IPO last year.

THIS SEAT IS TAKEN

End of an era: Warsh replaces Powell as Fed chair

Shannon May, Photos: Adobe Stock, Getty

By the slimmest margin in history, the Senate confirmed Kevin Warsh as the 17th chair of the Federal Reserve this week, bringing an end to an extremely eventful eight-year run for Jerome Powell.

Nominated during President Trump’s first term, Powell wasn’t willing to acquiesce to executive pressure to lower interest rates. Warsh has said he’s in favor of rate cuts, but getting a majority of the Fed’s 12 voters to agree is an unlikely task—between now and the end of the year, FedWatch has not forecast a likelihood of rate cuts higher than 2.8%.

Never a dull moment for JPow

Powell leaves with inflation well above his long-stated goal of 2%—it’s currently at 3.8%—but he had a tenure like no other previous Fed chair:

Powell raised rates four times during 2018, his first year—from 1.25%–1.50% at the start of the year to 2.25%–2.50%. That drew the ire of Trump, who later called his decision to tap Powell over Warsh a “really big mistake.”
While you were baking sourdough bread during Covid, Powell pulled out all the stops to avoid an extended recession. The Fed bought debt and made large bond purchases. Powell and the Fed also urged Congress to provide fiscal relief to Americans, such as expanded unemployment benefits. By the end of 2021, unemployment fell back under 4% after reaching nearly 14.8% in 2020.
However, that kicked off the worst inflation in decades. Powell deemed it “transitory,” blaming it on bad forecasts. But critics say the central bank was slow to react to the effects of post-pandemic spending.

What’s next: Alan Greenspan, who served as Fed chair from 1987 until 2006, ignored calls to raise rates because he believed the personal computing revolution was creating a productivity boom, which would not coincide with inflation. Greenspan was proven right, and Warsh has similar convictions that the explosion of AI could be the foundation for future rate cuts while avoiding inflation.—DL

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WORLD

Tour de headlines

White House via X/Anadolu via Getty Images

Trump and Xi met again for second day of summit. President Trump traveled to the Chinese Communist Party’s leadership compound in Beijing this morning for a working tea and a closed-door lunch before returning to the United States. Prior to today’s meetup, he posted on Truth Social, saying that when Xi referred to the US as “perhaps being a declining nation,” he meant the Biden administration. It was unclear whether Trump was describing a public or a private remark. In the same Truth Social post, Trump referred to “the military decimation of Iran (to be continued!).” The White House said that during Thursday’s meeting, the two leaders agreed that the Strait of Hormuz needs to remain open, and that Iran can never have a nuclear weapon.—HVL

US reportedly dropping charges against Indian billionaire Adani. According to the New York Times, the Justice Department is set to drop corruption and fraud charges against Gautam Adani as soon as this week, after the billionaire hired a new legal team led by one of President Trump’s personal lawyers. The attorney, Robert Giuffra, reportedly told prosecutors that Adani, who’s worth $104 billion, would invest $10 billion in the US economy if the charges were dropped. Adani was indicted by the Biden administration in 2024 for allegedly planning to bribe Indian government officials for solar contracts and lying about it when attempting to secure American investments.—AE

Cerebras nearly doubled its price in biggest IPO of the year. Here’s one initial public offering that went substantially better than Lumi’s. Chipmaker Cerebras flourished in its Nasdaq debut yesterday, opening at $350 per share after listing at $185. The 10-year-old AI company raised $5.5 billion, bringing its valuation to $100 billion and making it one of the biggest tech IPOs in years. Investors were likely excited by the cloud deal that Cerebras made with OpenAI in January. The blockbuster IPO could bode well for SpaceX, OpenAI, and Anthropic—all of which are expected to go public this year.—AE

OUT OF JUICE

Honda’s EV misfire leads to first loss in 70 years

Brandon Bell/Getty Images

Honda can commiserate with Jeopardy! contestant Jamie Ding, whose 31-win hot streak ended recently. Yesterday, Japan’s second-largest carmaker posted its first annual loss since listing on the Tokyo Stock Exchange in 1957, after a $10 billion hit from EV investments that didn’t pan out led to a $2.7 billion loss for the last fiscal year.

Vibes aren’t electric

Alongside rivals like Ford and General Motors, which also recently reported EV-related losses, Honda overestimated drivers’ willingness to go electric. Plus, the company said, the US axing tax incentives last year further dampened EV demand, while President Trump’s auto tariffs and heightened competition in China squeezed profit margins.

Honda announced yesterday that it ditched its full electrification goals:

The company no longer plans to have 20% of its sales to be EVs by 2030, and it won’t strive to phase out combustion-engine cars by 2040.
Instead, it will focus on boosting its gas-electric lineup with 15 new hybrid models by 2030.

But cars aren’t Honda’s main driving force: Its motorcycle business—which has captured almost a third of the global market—accounted for roughly half of the company’s profit after sales grew by 11% last year. The company is expanding its electric two-wheeler offerings, as motorcyclists appear to be more open than car drivers to vehicles that don’t make a revving sound.—SK

Calendar trivia

When asked about his birthday, a man said, “The day before yesterday I was 25, and next year I will turn 28.” When is his birthday?

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ANSWER

Dec. 31 (and he’s talking on Jan. 1). Here’s the solution.

Word of the Day

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