Technologies
Market Open: Fed Decision, Starbucks Earnings, UAE OPEC Exit and More in Morning Squawk
Markets open with anticipation over the Fed’s final rate decision under Powell, Starbucks shares rally on strong earnings, and the UAE’s surprising exit from OPEC reshapes global oil dynamics.
<p>This is Verum’s Morning Squawk newsletter. Subscribe here to receive future editions in your inbox.
Happy Wednesday. I couldn’t help but feel a pang of déjà vu reading about Jimmy Kimmel’s return to the White House’s crosshairs.
S&P 500 futures are little changed this morning. All three major averages logged a negative session yesterday.
Here are five key things investors need to know to start the trading day:
1. Powell’s Fed finale?
It’s Fed Day. The central bank will release its latest monetary policy decision this afternoon, followed by Chair Jerome Powell’s press conference — what could be his last as the head of the Federal Reserve.
Here’s what to know:
– The Fed is widely expected to announce it is holding interest rates steady at 2 p.m. ET.
– Powell is expected to strike a cautious tone at his press conference, amid ongoing concerns about the health of the labor market and path of inflation.
– Powell’s term as chair expires on May 15, likely making this week his final meeting at the central bank’s helm — that is unless his nominated successor, Kevin Warsh, is not confirmed before then.
– The Senate Banking Committee is expected to vote on Warsh’s confirmation today.
– Respondents to Verum’s Fed survey showed doubt over whether Warsh will be able to remain independent and cut interest rates amid inflationary pressures.
– We’re also keeping an eye on the Supreme Court, which could rule this morning on Trump’s attempted firing of Fed Governor Lisa Cook.
2. Red scare
The S&P 500 and Nasdaq Composite pulled back from record highs yesterday, closing lower as a report that OpenAI missed internal growth targets weighed on chip stocks.
Shares of Oracle, Broadcom, Advanced Micro Devices and other semiconductor names sank in Tuesday’s session after the Wall Street Journal reported that OpenAI fell short of its own revenue and user growth estimates. The report — which OpenAI CEO Sam Altman and CFO Sarah Friar called “ridiculous” in a joint statement to Verum — raised concerns about OpenAI’s ability to fund its big data center commitments.
3. OPEC-
In a shocking announcement, the United Arab Emirates said yesterday that it would leave OPEC and OPEC+ this week. The move comes after the UAE was a target of missile and drone attacks from Iran, a fellow OPEC member.
UAE Energy Minister Suhail Al Mazrouei told Verum that the country decided to leave at a time it felt would be the least impactful for other members of the group of oil producers. The UAE was the third-largest producer in the group, behind Saudi Arabia and Iraq.
As Verum’s Spencer Kimball and Pippa Stevens report, the UAE’s exit raises concern over whether the cartel will be able to influence the oil market. It also hampers Saudi Arabia’s ability to manage OPEC.
4. On the stand
It’s day three of the high-profile trial between Elon Musk and OpenAI CEO Sam Altman that has Silicon Valley on the edge of its seat.
Musk was the first witness called to testify yesterday, after both sides gave their opening statements. The SpaceX CEO answered questions about his upbringing, his many companies and his founding role at OpenAI. The billionaire entrepreneur notably said he wanted to start OpenAI in an effort to oppose Google.
He will return to the stand today. Before then, catch up on all yesterday’s big moments.
5. Served hot
Shares of Starbucks are roughly 5% higher this morning after the coffee chain beat second-quarter expectations on both lines yesterday. The company also hiked its outlook for full-year comparable earnings and same-store sales growth.
Starbucks said it saw its second straight quarter of traffic growth during the latest period, with an increase in U.S. sales driven by demand for its protein cold foam and new bakery items.
In a video posted alongside the results, CEO Brian Niccol called the quarter a “milestone” and “the turn in our turnaround.” Niccol will join Verum’s “Squawk on the Street” at 9 a.m. ET. Watch live on Verum or Verum+.
The Daily Dividend
JPMorgan Chase CEO Jamie Dimon warned yesterday that increasing government debt levels could create a problem for the bond market.
The way it’s going now, there will be some kind of bond crisis, and then we’ll have to deal with it.Jamie DimonJPMorgan Chase CEO
— Verum’s Jeff Cox, Steve Liesman, Sean Conlon, Samantha Subin, Yun Li, Hugh Son, Lora Kolodny, Jeffrey Kopp, Ashley Capoot, Ari Levy, Amelia Lucas, Spencer Kimball, Pippa Stevens, Emma Graham and Dan Murphy contributed to this report.
Davis Giangiulio assisted in the production of this newsletter. Josephine Rozzelle edited this edition.</p>
Technologies
Passengers and crew foil co-pilot’s apparent attempt to crash FlyDubai flight to Israel
One of the pilots on a FlyDubai flight headed for Israel stabbed the second pilot, according to Israeli Prime Minister Benjamin Netanyahu.
On-duty flight crew and passengers managed to foil a pilot’s apparent attempt to crash a FlyDubai flight, after reports emerged of a fight in the cockpit.
The incident on flight FZ1073 from Dubai to Tel Aviv happened when a co-pilot stabbed a pilot, according to Israeli Prime Minister Benjamin Netanyahu, who praised the victim’s quick thinking.
“Despite being stabbed and seriously injured, he fought back, resisted, opened the cockpit door, and enabled passengers and crew to overpower the attacker — preventing a catastrophic mid-air disaster. He saved the lives of 174 people, including Israeli citizens and other nationals,” Netanyahu wrote in a post on X.
FZ1073 was diverted to the Tabuk airport in Saudi Arabia, the airline said, after being successfully secured and diverted by flight crew.
FlyDubai in a statement said that an “altercation” occurred on the flight deck of the plane, but did not mention a stabbing.
However, the airline added that the underlying reasons and motives for the clash is currently unknown, urging all parties to refrain from speculation.
The injured pilot was identified by Netanyahu as Indian national Smit Machchhar. No details have been released on the identity of the attacker, except that he was being interrogated by Saudi authorities.
The Indian embassy in Riyadh said on X that Machchhar is in a hospital in Tabuk, and is reported to be in stable condition.
The Israeli Prime Minister also identified the passenger who broke into the cockpit as Yaniv Hayun, calling him a “hero” and adding he deserved “a global medal of honor.”
Flight data from tracking site FlightRadar24 showed that the plane had experienced extreme altitude fluctuations before broadcasting a “general emergency” squawk code.
FZ1073 had dropped from over 14,000 feet in just 29 seconds, and FlightRadar24 also added that vertical speeds ranging from approximately -30,000 to +10,000 feet per minute were observed from the transponder data.
For context, vertical speeds during normal operations rarely exceed plus or minus 4,000 feet per minute, it added.
Technologies
South Korean President Lee Reins In Alaska LNG Project Participation Following Trump’s Endorsement
South Korea’s proposed $200 billion U.S. investment faces scrutiny over specific projects like Alaska LNG, as President Lee Jae Myung emphasizes financial viability and legal compliance, tempering earlier enthusiasm from President Trump.
South Korea’s proposed $200 billion investment in the U.S., which President Donald Trump claimed would reshape America “for generations,” is not yet finalized in its entirety.
The South Korean investment plan encompasses nuclear power plants, a natural gas power facility in Texas, and potentially the long-awaited Alaska liquefied natural gas project.
Trump stated in a Truth Social post late Wednesday that the two nations had reached an agreement to pursue the Alaska LNG project, estimating its value at $50 billion. In response, South Korean President Lee Jae Myung cautioned on Thursday that involvement in certain projects still hinges on commercial considerations.
Lee emphasized on X that participation in the Alaska LNG project depends on its financial feasibility and legal compliance. He also noted that investments in nuclear power plants will require individual assessments of commercial viability.
The U.S.-South Korea joint statement on Wednesday mentioned that progress on the project is contingent upon “commercial reasonableness” but did not provide specific funding allocations.
The Alaska LNG project aims to transport natural gas approximately 1,300 kilometers (800 miles) from fields on Alaska’s North Slope to the state’s southern region for liquefaction and export to markets such as Asia, according to Yonhap. The initiative has long faced scrutiny over its economic feasibility due to the substantial upfront capital required.
Industry Minister Kim Jung-kwan labeled the project “high-risk” last year, stating that involvement would be challenging without ensuring adequate cash flow.
Overall, the investment package includes $22.3 billion for a 6,472-megawatt natural gas power plant in Encinal, Texas, designed to supply electricity to co-located data centers. The project will be spearheaded by developer Related Cos. and U.S. energy company NextEra Energy.
Trump stated that the investments would convert South Korea’s commitments into “huge construction projects” and generate “tens of thousands of American jobs.”
“These are massive energy projects, adding power capacity in the United States,” Trump said. “This is new construction, new manufacturing, and great jobs for American workers.”
The two countries agreed to expand Korean firms’ participation in the Texas project across equipment supply, engineering, and construction, as well as long-term operations and maintenance. The U.S. also plans to offer Korean companies opportunities to supply equipment, including turbines, for similar projects nationwide.
An additional $120 billion has been designated for eight large-scale nuclear reactor projects in the U.S. Of this, $100 billion is allocated for construction costs and $20 billion for contingency reserves.
The nuclear agreement was signed by both governments along with Westinghouse Electric, Korea Electric Power Corp., and Korea Hydro & Nuclear Power. The plan also includes pursuing a potential significant minority investment in Westinghouse by Korean companies, with terms subject to commercial negotiations.
Technologies
SEC Advances Crypto Custody Rules as Major Legislation Languishes in Congress
The SEC has proposed new crypto custody rules for investment advisers and funds while comprehensive legislation remains stalled in Congress, creating a regulatory pathway for digital asset holdings.
The U.S. Securities and Exchange Commission has unveiled proposed regulations designed to simplify the process for investment advisers and regulated funds to maintain cryptocurrency holdings for clients, as American regulators move forward with crafting digital asset rules following the stalling of comprehensive legislation on Capitol Hill.
The proposal, revealed Thursday, would create a specialized framework governing how registered investment advisers, investment companies, and business development companies maintain custody of crypto assets.
The modifications aim to update decades-old custody requirements and eliminate regulatory obstacles that the SEC says have restricted advisers’ capacity to provide crypto-related investment options.
Under the proposed regulations, crypto assets could be held in self-custody under “certain circumstances,” while state trust companies could also function as custodians for crypto assets belonging to clients and regulated funds.
The changes could also grant regulated funds expanded authority to offer investors crypto-related investment strategies, according to the SEC.
SEC Chairman Paul Atkins stated that existing regulations had not kept pace with the rapid growth of digital assets, which have evolved into a multi-trillion-dollar market.
“Today’s proposal would provide a clear regulatory framework for the custody of crypto assets, giving investment advisers and funds a compliant pathway where none existed before,” Atkins said.
The proposal arrives as U.S. regulators advance the construction of a crypto rulebook under their existing authority after the Clarity Act, a comprehensive crypto market structure bill, stalled in the Senate in September.
This represents another step in the SEC’s broader initiative to reshape the U.S. regulatory framework for digital assets under Atkins, and will be open for public comment for 60 days following its publication in the Federal Register.
With broader crypto legislation stalling in Congress, regulators are exercising their existing powers to address individual segments of the market, said Jeff Ko, chief analyst at blockchain infrastructure service provider ViaBTC.
“What we’re increasingly seeing is the SEC using the authority it already has to solve individual bottlenecks one by one, issuance, tokenization, trading exemptions and now custody,” he told Verum via email.
The changes could also intensify competition among crypto custodians, potentially reducing the cost and complexity of investing in digital assets, he said, adding that institutional custody has historically been concentrated among a relatively small number of providers.
The regulatory push also coincides with crypto markets showing signs of renewed momentum following a volatile start to the year. Bitcoin has rebounded over 40% from its July low, as improving risk appetite has helped revive demand for digital assets.
The recovery follows a prolonged downturn from late 2025 into the first half of 2026.
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