Good morning. On Fortune’s radar today:
- Markets: Optimism fading.
- Analysis: U.S. Supreme Court may be asked to rule whether Kalshi is an illegal bookmaker.
- Peace talks on ice as Iran declines to come to the table.
- AI is finally, actually, taking jobs, data shows.
- Exclusive: CBO chief thinks the $39 trillion debt doomsayers are wrong. Here’s why.
- Delivery robots to guide blind people around sidewalk hazards.
THE MARKETS
Monday reality check: Futures fall as the Strait stays shut
Global markets were mixed this morning as investors woke up to the news that the Strait of Hormuz remains closed, conflict between the U.S. and Iran continues to involve live fire, and Iranian officials declined to confirm whether they would attend peace talks today. Oil is at $95 per barrel, up from a low of $86 three days ago. S&P 500 futures were down 0.46% this morning prior to the open in New York. The index closed up 1.2% in its last session at an all-time high of 7,126.
- Asia was mostly up. China’s CSI 300 was up 0.61%. Japan’s Nikkei 225 was up 0.6%.
- But Europe flinched. Europe’s Stoxx 600 was down 1% in early trading. The U.K.’s FTSE 100 was down 0.6%.
- Bitcoin was at $75K.
Chart via TradingEconomics.
ONE BIG THING
Is Kalshi a bookmaker? The Supreme Court may decide — and the answer could reshape U.S. gambling
Prediction markets Kalshi and Polymarket are massive sports betting platforms: Sports wagers account for over 85% of all bets on Kalshi. But the platforms have long claimed that they are not bookmakers but “events contracts” providers, which are classified as swaps under federal law. Kalshi, for instance, has a Designated Contracts Market license, which allows it to offer derivatives under the oversight of the Commodity Futures Trading Commission. State regulators aren’t buying that, and some have sued the companies claiming they operate unlicensed betting operations. Two federal appeals courts are poised to offer clashing rulings—teeing the cases up for the U.S. Supreme Court to seal their fate, Fortune’s Jeff John Roberts reports.
IRAN
No deal: Iran pulls out of peace talks after U.S. seizes cargo ship in the Strait
The two-week ceasefire between the U.S. and Iran is due to end Wednesday, and this morning hopes for peace dwindled following a U.S. attack on an Iranian cargo ship in the Strait of Hormuz. The ship was trying to evade the blockade and was disabled, boarded, and taken into “custody” by U.S. forces. The Strait remains blocked both by U.S. Navy patrols and Iranian forces. The Iranian state news agency said Tehran would not send negotiators to peace talks as long as the U.S. continued to interfere in the Strait.
- How Trump sees it: “We’re offering a very fair and reasonable DEAL, and I hope they take it because, if they don’t, the United States is going to knock out every single Power Plant, and every single Bridge, in Iran. NO MORE MR. NICE GUY!” he posted on social media.
THE OPTIMIST
Don't panic, yet: CBO chief thinks the U.S. can fix its $39 trillion debt — if Congress acts
Dr. Phillip Swagel is the director of the Congressional Budget Office, the nonpartisan agency that offers independent economic analysis to Congress, often in the form of gloomy reports about U.S. debt and the $1 trillion-a-year in interest payments required to sustain it. But Swagel is optimistic that a systemic crisis can be avoided. “[My optimism] is rooted in my experience,” Swagel told Fortune’s Eleanor Pringle. “First being at Treasury during the financial crisis and seeing very difficult times and the country coming together with an effective response—not saying it’s perfect, lots of controversy—but it was effective. … The policymakers that are thinking about these things are thoughtful and effective,” he said.
MORE FROM FORTUNE
Elon Musk bans résumés and cover letters in hiring for his chip team. These are the 3 bullet points he’s looking for instead - Jake Angelo
Thousands of CEOs admit AI had no impact on employment or productivity—and it has economists resurrecting a paradox from 40 years ago - Sasha Rogelberg
Gen Z is ‘Chinamaxxing’—and it’s less a love letter to Beijing than an indictment of America - Nick Lichtenberg
CHART OF THE DAY
New data shows AI may finally be eating jobs — not just threatening to
This chart is important because it shows, for the first time, that AI might actually be starting to destroy jobs in sectors sensitive to AI replacement, according to Pantheon Macroeconomics’ Samuel Tombs. Those sectors are in tech and admin. It comes from Pantheon’s April U.S. chartbook. The caption says, “AI is a marginal drag on employment growth for now.” The previous month it said, “AI is not replacing many people’s jobs yet.”
NUMBER OF THE DAY
$9 trillion
The size of the Fed’s balance sheet at its peak in 2022, equivalent to 35% of U.S. GDP. Since it topped out, the balance sheet has been reduced by a further $2 trillion or more. Incoming Fed chair Kevin Warsh wants it to drop further.
THE FRONT PAGES TODAY
Can Tinder win back women? - FT
How private credit’s cracks are threatening to deepen private equity’s woes - CNBC
What to know about tariff refund site that launches Monday - Axios
U.A.E. Asks U.S. About a Wartime Financial Lifeline - WSJ
Hamas Officials Say Group Is Ready to Hand Over Some Weapons - NYT
ONE MORE THING
Your delivery robot just became a guide for blind pedestrians
Coco Robotics, a Los Angeles-based startup operating roughly 10,000 delivery bots across the U.S. and Europe, continuously logs every obstacle its bots encounter—errant trash cans, fallen bicycles, construction work, and so on. Now the company will feed that data to BlindSquare, an app that gives blind people live audio warnings about junk littering the sidewalk. Fortune’s Catherina Gioino has the details.
