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CLOSING BELL
Tariffs Illegal, Inflation Running Hot

The market closed lower on Friday, after both the S&P 500 and Dow hit fresh highs on Thursday. Wading into the long holiday weekend, traders left positions, spurred on by the highest inflation reading since March.

A U.S. Appeals Court found Trump’s emergency global tariffs illegal early Friday night. ‼️ Check for more news on Stocktwits as the story develops, or if the Trump Admin even raises an eyebrow.

Fed legal drama to oust a sitting FOMC member took central stage in an otherwise slow sell-off day. The ‘de minimis’ cheap crap exemption that allowed goods imported under $800 in value a duty-free privilege ended on Friday, by executive order. For small business owners on Etsy or giants like Lululemon that want to import cheaply, it will spell trouble, but how much it truly affects the resilient American consumer or prices is yet to be clear.

One economist puts the cost at $136/family, or about six U.S. Open special Honey Deuce cocktails served in Queens this weekend. In 2024, the Open sold 556,000 of the $23 drink, generating $13M. Maybe all proceeds could go toward taxes on cheap imported stuff this year? 🍸️ 

Today’s issue covers: Spirit Airlines files for bankruptcy (again), PCE inflation is at a five-month high, and more. 📰

6 of 11 sectors closed green, with health care $XLV ( ▲ 0.73% ) leading and tech $XLK ( ▼ 1.53% ) lagging.

 $SPY ( ▼ 0.6% )  $QQQ ( ▼ 1.16% )  $IWM ( ▼ 0.45% )  $DIA ( ▼ 0.15% ) 

STOCKS
Spirit Airlines Left Bankruptcy, Only To Fly Into A Mountain of Costs 🛩️ 

Right after the close Spirit Airlines $FLYY ( ▼ 2.4% ) filed its second chapter 11 process in a year, citing dwindling cash and losses that have not turned around since the last bankruptcy period that ended in March.

Flights will still operate, and tickets will still be honored, the company stated in a filing, but its ultra-low-cost model may not be sustainable in the future.

The company was on track to make $252M in 2025, according to a filing back in December.

Boy, did that tune change quickly.

In August, the company said it lost $257M just since March. Chief Dave Davis said there was much more work to be done, obviously. The last bankruptcy focused on restructuring debt and equity, but did not focus on larger changes, like selling off plane or route inventory, according to CNBC.

“Since emerging from our previous restructuring, which was targeted exclusively on reducing Spirit’s funded debt and raising equity capital, it has become clear that there is much more work to be done and many more tools are available to best position Spirit for the future.”

Mike Linenberg, Deutsche Bank's airline analyst, said weaker U.S. demand did not help the companies’ brief stint out of bankruptcy. Spirit is the largest budget airline in the U.S. and has rejected merger plans with liferaft from runner-up budget airline Frontier multiple times, including in February of this year. 😖 

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MACRO NEWS
Inflation Climbs At Highest Rate In Five Months

PCE inflation numbers rounded out the trading week with a Friday release that showed prices of goods consumers pay in the U.S. climbed the most since March.

The 2.6% rate was right where economists at the U.S. Department of Commerce had expected it, and Core inflation, which excludes volatile energy and food costs, climbed nearly 3%. 🛍️ 

Even with prices climbing, the Federal Reserve seems set to cut rates at the next FOMC meeting in September, for better or worse. Charles Schwab’s Liz Ann Sonders said another weak jobs report could cement the case for a September Fed rate cut.

FOMC members had predicted two cuts this year, and here we are in the third act without a single rate cut yet. President Trump and gang are pushing for rate cuts to spur the real estate market, and cutting apart the slow Fed seems to be part of the plan. ✂️ 

Federal Gov. Lisa Cook faced a court hearing on Friday over a letter from Trump she received earlier in the week, which said, in effect, “You’re fired.” Cook and her legal representative petitioned to stay Trump’s hand, allowing her to retain her role as a voter on the FOMC at least until her lawsuit against the president is resolved.

The court did not make a decision, and Fed Chair Powell told the Judge to keep her in her seat for now, according to CNBC. Cook has not been charged, despite a third allegation of wrongdoing from Housing Finance Agency Director Bill Pulte. Cook said a clerical error may have caused the mortgage dispute, according to Bloomberg.

Protect Fed independence aside, that sounds like a really weak argument tbh. 🙄 

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Top Stocktwits News Stories 🗞️ 

Lucid fell 4% after Stifel cut its price target to $2.10 ahead of a 1-for-10 reverse split, with retail sentiment flipping to neutral and message volume dropping to “low.”
Nvidia could reach $1 trillion in annual revenue by 2030 if it maintains a 55–60% market share in data centers, according to New Street Research analyst Pierre Ferragu.
Bitcoin (BTC) fell below $110K alongside steep losses in Ethereum and other tokens, as traders braced for PCE inflation data that could shape the Fed’s September rate decision.
Marvell plunged 18% after issuing weak Q3 guidance, prompting Bank of America and Morgan Stanley to cut price targets and flag uncertainty in its roles with Microsoft and Amazon AI projects.
Fannie Mae and Freddie Mac faced Democratic pushback on IPO plans as Senators Warren, Booker, and Schumer urged the FHFA to prioritize housing affordability and study mortgage rate risks before selling government stakes.
Dell Technologies Inc. fell over 8% as its Q3 EPS guidance of $2.45 missed Wall Street’s $2.49 estimate.
Ulta Beauty Inc. fell 7% after beating Q2 expectations with $5.78 EPS and $2.79B in revenue.
IREN surged 14% after Q4 earnings beat and analysts hiked price targets, citing accelerated progress in its AI portfolio and continued mining-side strength.

Don’t miss a story! Follow @StocktwitsNews for a live feed in real time. ✍️ 

Links That Don’t Suck 🌐

🪄 Trump’s DOJ warns of depression in court filing to save tariffs

🤖 Musk’s xAI sues engineer for allegedly taking secrets to OpenAI

🍤 Potentially radioactive shrimp sold at Mariano's, other stores in Illinois and Indiana

😨 Tesla asks for $243 million verdict to be tossed in fatal Autopilot crash suit

🏠️ Sunblock, charcoal ... and Powerball? Holiday weekend lottery drawing worth $1 billion

📺️ Trump blocks $4.9B in foreign aid Congress OK’d, using maneuver last seen nearly 50 years ago 

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