Daily Brew // Morning Brew // Update

July 07, 2026

Mornin’. The long weekend may be behind us, but we’ve still got America on our minds. So, we’re whipping up a Sunday Special on National Parks. And we need your help. Tell us which National Park is your favorite and why you think it’s the best here. We’ll feature our favorite responses in Sunday’s newsletter. Until then, happy trails.

—Matty Merritt, Sam Klebanov, Molly Liebergall, Neal Freyman, Abby Rubenstein

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

Xbox’s struggles
SpaceX joining the Nasdaq 100
Managers going easy on AI “employees”

MARKETS

Nasdaq

26,121.16

+1.12%

S&P

7,537.43

+0.72%

Dow

53,055.91

+0.30%

10-Year

4.479%

-1.0 bps

Bitcoin

$64,255.59

+1.94%

Dell

$411.80

+4.43%

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 came roaring back after the long weekend yesterday, as chip stocks rebounded from last week’s dip. The Dow closed at a record high.
Stock spotlight: There’s an even more effective pitchman for Dell than the “Dude, you’re getting a Dell” guy: President Trump. The company’s stock soared after the president said, “Go out and buy a Dell computer,” at an event yesterday during which he rang the stock market’s opening bell from the White House to mark the launch of Trump accounts for kids.

FACTORY RESET

Xbox starts major layoffs to save its lagging biz

Morning Brew Inc, Photo: Getty Images

One of the biggest names in gaming could use an infinite money glitch right now. With revenue falling and a string of acquisitions not paying off, Microsoft-owned Xbox will slash about one-fifth of its staff and divest from some development studios, CEO Asha Sharma said yesterday.

Sharma called it “the most significant restructure” in the company’s history. Xbox will…

Lay off 1,600 people this week and another 1,250 over the next year.
Sell or spin off four to five game studios that it acquired within the past decade, which will cut another 350+ people from Xbox’s staff (games that are already announced won’t be canceled, Sharma said).

“Our business today is not healthy,” Sharma wrote in a memo, acknowledging the company’s measly 3% profit margin. Its quarterly revenue recently declined 5% year-over-year.

The Game Pass gamble

One big reason for Xbox’s slowdown appears to be its struggling subscription service, Game Pass.

TL;DR: To build up an enticing Game Pass library, Xbox bought production giant Activision Blizzard for $69 billion in 2023 and ZeniMax Media, the parent company of Skyrim-maker Bethesda, for $8.1 billion in 2021.

Those splurges didn’t pan out. (Xbox is keeping both companies, but the fifth studio it wants to divest is part of ZeniMax.):

Game Pass currently has 30 million subscribers, a far cry from the 77 million that Xbox projected it would reach this year.
In a normal year, the company lost 64 cents for every dollar it invested, Sharma wrote.

But now…Sharma, who became CEO in February, said Xbox will return to growth in 2027. Since taking the helm, she has moved to reduce the number of games Microsoft publishes and reprioritize its most popular franchises, like Minecraft, Fallout, and Candy Crush. This streamlining comes as the AI boom sends memory chip prices soaring, pushing Xbox and its competitors to raise console prices.

Zoom out: Xbox’s layoffs are part of 6,400 planned job cuts across Microsoft, whose massive AI spend is spooking investors. It’s the worst-performing megacap tech stock so far this year.—ML

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WORLD

Tour de headlines

Maja Hitij/FIFA via Getty Images

US eliminated from the World Cup. The USMNT is out of the tournament after a 4–1 loss to Belgium last night. The loss came after a whole lot of drama off the pitch. Before the match, FIFA rejected Belgium’s appeal of its decision to permit US striker Folarin Balogun to play. The appeal questioned FIFA’s reversal of a suspension after President Trump asked FIFA President Gianni Infantino to review the red card. European soccer’s governing body, UEFA, called FIFA’s decision “unprecedented, incomprehensible and unjustifiable.” Meanwhile, Spain beat Portugal, bringing an end to what Cristiano Ronaldo said will be his last World Cup.

Throngs of mourners gathered for Iran’s Ayatollah Ali Khamenei. The body of the country’s former supreme leader of 37 years, who was killed at the beginning of US and Israel attacks against Iran in February, was carried through Tehran yesterday. Hundreds of thousands of mourners assembled there as part of a the government’s carefully orchestrated multiday funeral that began last week. The body will also be taken to other Iranian and Iraqi cities. Peace talks between the US and Iran have been halted until after the funeral, but the ceremony carries political weight: Crowds of mourners chanted “Death to America.” Iran also fired on commercial ships in the Strait of Hormuz yesterday, testing the fragile ceasefire.

AI “actor” Tilly Norwood will star in a movie. Unlike many human performers whose auditions don’t even help them land better catering gigs, the controversial “actor” has booked her first feature film—and it was written for her. Particle 6, the AI studio that created Norwood, will be making the movie Misaligned through a “hybrid” process that will involve traditional entertainment industry workers and AI specialists. It will be set in “the Tillyverse,” a digital world where the “actor” will portray (and this is a stretch) an AI with no real body or lived experience in a “coming-of-age story infused with existential AI chaos.”—AR

INDEX FINGER ON THE PULSE

You might automatically own a slice of SpaceX

TIMOTHY A. CLARY/AFP via Getty Images

For many people, investing in SpaceX is now a matter of doing nothing. Elon Musk’s space and AI company became part of the Nasdaq-100 index today, two weeks after it IPO-ed. This means funds tracking the index, like Invesco’s popular QQQ ETF, are forced to buy the stock, adding it to the portfolios of millions of passive retail investors.

While it usually takes months for a newly public company to join the index, Nasdaq recently created an accelerated process for megacap stocks like SpaceX. While SpaceX is the first to benefit, rivals Anthropic and OpenAI are also likely to use it after their forthcoming IPOs.

Obligatory buy

SpaceX’s inclusion in the index could make the stock even more volatile:

Though SpaceX will make up less than 1% of the Nasdaq-100’s value, funds tracking the index will have to buy as much as $4.3 billion of its shares, JPMorgan estimates.
Since less than 5% of SpaceX shares are currently available for public trading, ETFs piling into the stock could create scarcity, boosting its price in the short-term.

Meanwhile, some retail investors who think SpaceX is overvalued or oppose Musk’s politics are ditching major ETFs for custom funds that exclude the stock, Bloomberg reported.

SpaceX won’t be joining the S&P 500 soon…since the most popular stock index recently rejected the company’s request for expedited entry.—SK

Nutritional facts

Here’s the ingredient list of a canned beverage—can you name what it is?

Filtered carbonated water, high fructose corn syrup, citric acid, potassium citrate, natural flavors, calcium disodium EDTA (to protect flavor)

Hint: Look at today’s date.

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