🥊 Zuck vs. the FTC

Good afternoon! The biggest act at Coachella this year wasn’t Lady Gaga or Green Day—it was the $49.99 deposit. As ticket prices balloon past $600 and total costs soar with travel, lodging, and $18 lemonades, tens of thousands of fans turned to the festival’s built-in buy now, pay later option to secure their spot in the desert. Coachella’s marketing now leans more “$50 gets you in the door” than “don’t miss your favorite artist,” and fans seem happy to swap sticker shock for monthly payments.

The no-interest plan, run through Ticketmaster and AXS (not Klarna or Sezzle), spreads costs out over several months with a one-time fee around 8% of the ticket price. Miss a payment and you’ve got 10 days to fix it—or lose your ticket and get credit instead. Organizers say it’s rare for fans to default after the second payment, and the real money comes once people show up: beer, merch, and parking all add to the festival’s bottom line. For Coachella, the goal is clear—get you in, and get you spending.

MARKETS

• Wall Street hit the brakes Tuesday after a strong start to the week, with major indexes slipping into the red as investors weighed Q1 earnings and the latest trade chatter. The Dow dipped 156 points, the S&P 500 slipped 0.17%, and the Nasdaq inched down 0.05%—a minor retreat after back-to-back wins.

• The mood was relatively calm by recent standards, with fewer fireworks from Washington and less market whiplash than investors have grown used to. Still, lingering concerns around tariffs kept gains in check, especially with rumblings of new levies targeting the auto and pharmaceutical industries.

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STOCKS
Winners & Losers

What’s up 📈

• Rocket Lab rocketed 10.14% after announcing hypersonic craft deals with the U.S. Air Force and U.K. Ministry of Defense. ($RKLB)

• Palantir Technologies jumped 6.24% on continued momentum after NATO announced its acquisition of the company’s AI-powered Maven warfighting system. ($PLTR)

• Hewlett Packard Enterprise gained 5.11% after Elliott Investment Management disclosed a $1.5 billion stake and plans to engage the company on boosting shareholder value. ($HPE)

• Netflix rose 4.83% after The Wall Street Journal reported the company aims to hit a $1 trillion market cap and double revenue by 2030. ($NFLX)

• Bank of America added 3.60% after posting a first-quarter beat driven by net interest income and trading revenue. ($BAC)

• Citigroup climbed 1.76% after reporting better-than-expected Q1 results, boosted by strong fixed income and equities trading revenue. ($C)

What’s down 📉

• Applied Digital plummeted 35.94% after missing revenue estimates despite posting 22% sales growth last quarter. ($APLD)

• Coty sank 8.48% after a downgrade to underperform by Bank of America, citing consumer weakness and a slowdown in makeup spending. ($COTY)

• Albertsons dropped 7.56% after issuing full-year guidance below expectations, despite topping Q4 earnings and revenue. ($ACI)

• Mobileye fell 4.52% following a downgrade from Barclays due to tariff concerns and pressure on auto tech investment. ($MBLY)

• Dow slipped 4.09% after Bank of America downgraded the stock to underperform, warning of a “perfect storm” of macroeconomic and trade headwinds. ($DOW)

• Boeing declined 2.36% after Bloomberg reported that China ordered airlines to halt Boeing plane deliveries and stop purchasing U.S. aircraft equipment. ($BA)

ANTI-TRUST
Zuckerberg Revisits Instagram Buy in FTC Meta Monopoly Case

Mark Zuckerberg found himself on the hot seat this week as the FTC kicked off a high-stakes trial aiming to undo Meta’s acquisitions of Instagram and WhatsApp. The government’s claim? Meta didn’t just buy two companies—it bought its way out of competition.

Zuckerberg’s own emails took center stage. In one from 2012, he called the Instagram deal a chance to “neutralize a competitor.” Another message floated the idea of spinning off Instagram, admitting there was a “non-trivial chance” Meta would be forced to break it up in the future. On the stand, Zuck admitted the emails were real but pushed back against the idea they showed monopolistic intent.

Breakup Watch

If the FTC gets its way, Meta could be forced to spin off Instagram and WhatsApp—two apps now deeply embedded in its ecosystem. That kind of breakup wouldn’t just sting financially (goodbye billions in market value), it would rewrite the M&A playbook for tech giants. The FTC argues these were "killer acquisitions"—a fancy way of saying Meta bought up rivals before they became a real threat.

Meta’s defense? Social media has changed. TikTok, YouTube, and Snap are now the biggest competitors, and Meta says the FTC is stuck in a time machine. They also note the deals were approved over a decade ago, when Instagram had just 13 employees and WhatsApp wasn’t yet a $19B behemoth.

The Smoking Gun

One key FTC email shows Zuckerberg in 2011 panicking about Instagram’s rise. “If Google buys them, we’re in trouble,” he wrote. Fast forward to 2025, and the FTC says that’s exactly why Meta made the move. Meta, meanwhile, argues that Instagram would’ve ended up like Twitter or Snapchat if left alone—not the 2B-user titan it is today.

The trial could last up to two months, with big names still expected to testify—including Instagram’s co-founder and WhatsApp’s early team. If things go south for Meta, this could be the most expensive "like" button ever pressed.

NEWS
Market Movements

• 🧠 Nvidia Expects $5.5 Billion Hit From New U.S. Export Restrictions to China: The U.S. government informed Nvidia that its H20 AI chip will now require a license for export to China “for the indefinite future,” citing concerns about its use in Chinese supercomputers. The H20 was designed to comply with previous restrictions, but Nvidia now expects to record $5.5 billion in charges this quarter tied to inventory and purchase commitments. The company warned the move could hurt U.S. tech leadership and accelerate China's push for self-reliance. ($NVDA)

• ✈️ United Airlines to Cut Domestic Flights Amid Weak Demand: United plans to reduce domestic capacity by 4% starting in Q3 after reporting a drop in coach-class demand. Still, it posted a $387 million Q1 profit, driven by strength in international and premium cabin sales. The carrier warned it may slash its 2025 earnings outlook if economic headwinds persist. ($UAL)

• 🌐 OpenAI May Launch Its Own Social Network: OpenAI is exploring the idea of launching a social media platform to rival X and Instagram, inspired by the viral success of its image-generation tool. The project is in early development, and demand for its creative features has pushed server capacity to the limit. OpenAI recently raised $40 billion at a $300 billion valuation.

• 📦 Apple Airlifted $2 Billion Worth of iPhones from India to Beat Tariffs: In March, Apple chartered cargo planes to ship 600 tons of iPhones from India to the U.S., racing against the clock before Trump’s tech tariffs took effect. Foxconn and Tata shipped iPhone 13 through 16 models, hitting record export highs. Apple also lobbied Indian airport officials to speed up customs clearance from 30 to 6 hours. ($AAPL)

• 📈 Elliott Management Builds $1.5B Stake in Hewlett Packard Enterprise: Activist investor Elliott Management disclosed a $1.5 billion position in HPE and plans to push for shareholder-friendly changes. HPE’s stock has fallen over 25% this year, despite topping Q1 revenue estimates. The company is currently battling DOJ opposition to its $14B Juniper Networks acquisition. ($HPE)

• 🎢 Universal’s Epic Universe Park Set to Add $2 Billion to Florida’s Economy: Comcast's new 750-acre theme park, Epic Universe, will open in Orlando on May 22—the largest new U.S. theme park in 25 years. With five themed lands and over 17,500 jobs expected, analysts say it will contribute $2 billion to Florida’s economy in its first year. The $7 billion project also strengthens Universal's rivalry with Disney. ($CMCSA)

• 🏦 Citigroup Beats Earnings Estimates on Trading Revenue Surge: Citi posted Q1 earnings of $1.96 per share on $21.6 billion in revenue, topping Wall Street expectations. Profit climbed 21% as fixed income traders brought in $4.5 billion and equities revenue jumped 23% amid market volatility. CEO Jane Fraser reaffirmed faith in the U.S. economy despite global trade tensions. ($C)

• 📶 American Airlines to Offer Free Wi-Fi for Loyalty Members: Starting in January 2026, American Airlines will provide free Wi-Fi via AT&T to its loyalty program members. The move comes as the airline tries to recover from a 45% stock decline this year and win back business travelers. It's a bold shift in in-flight experience strategy. ($AAL)

• 💼 Jamie Dimon Sells $31.5M in JPMorgan Stock Amid Succession Talks: JPMorgan CEO Jamie Dimon offloaded $31.5 million worth of shares as speculation builds about his eventual successor. The sale followed strong Q1 earnings boosted by record trading revenue. Dimon’s total compensation rose 8.3% to $39 million for 2024. ($JPM)

MEDIA
Netflix Plans To Bring Streaming Into The $1 Trillion Club By 2030

Netflix wants to roll the credits in 2030 with a $1 trillion market cap—and they’ve got the script to get there. At its recent annual business review, execs reportedly told staff they’re aiming to double revenue from $39 billion to $78 billion, triple operating income, and reel in $9 billion from ads alone. That’s a bold pitch in an economy where ad budgets are wobbling.

The streaming giant is already sitting on a $400 billion valuation, with shares up 58% over the past year. To hit 13 digits, Netflix needs less than a 150% bump—no easy feat, but not impossible either. Especially if its crackdown on password sharing, steady price hikes, and rising ad-tier signups continue to boost its bottom line.

Ad Tier, Unlocked

Netflix’s ad-supported tier has gone from fledgling to a full-fledged revenue stream, now making up over 40% of new U.S. signups. Execs believe ad growth will be key to reaching their 2030 goals and they’re taking ad tech in-house to do it. The upcoming “Netflix Ads Suite” will help the company own its data, launch new ad formats like “pause ads,” and potentially serve more ads during live events (yes, sports are coming).

Global Expansion on Fast Forward

To get to 410 million subscribers by the end of the decade, Netflix plans to supercharge growth in broadband-heavy markets like India and Brazil. The company added 18.9 million subscribers in Q4 alone, but U.S. growth is stagnating, making international markets crucial for its sequel.

The wild card? The economy. Netflix execs reportedly acknowledged the possibility of a recession—one that could slow ad dollars but keep couch potatoes glued to their screens. If their “streaming as recession-proof” thesis holds, they might just pull it off. But if tariffs or economic turmoil stall ad revenue, Netflix could find itself buffering on its $1 trillion dream.

Calendar
On The Horizon

Tomorrow

Coming up Wednesday: two key reads on the economy. We'll get fresh numbers on US retail sales and homebuilder confidence, both of which could shed light on how consumers and developers are weathering the early stages of tariff pressure. While the data likely won't capture the full brunt of recent trade moves, Wall Street will be watching for any early signs of weakness in spending or sentiment.

We’ll also hear from several major names reporting earnings, including US Bancorp ($USB), Citizens Financial ($CFG), Abbott Laboratories ($ABT), Progressive ($PGR), The Travelers Companies ($TRV), Kinder Morgan ($KMI), and CSX ($CSX).

Before Market Open:

• ASML kicks off chip earnings season, giving investors a first glimpse at whether the AI-fueled semiconductor rally still has legs. With fresh concerns around Big Tech’s appetite for capex, rising tariffs on chip imports, and broader economic slowdown risks, this report is arriving at a critical moment. Shares of the Dutch chipmaking giant have stumbled over the past year, but a solid earnings print could shift sentiment fast. If ASML shows resilience on the bottom line, traders may see it as a green light to reload on semis. Consensus: $5.76 EPS, $7.76 billion in revenue. ($ASML)

NEWS
The Daily Rundown

• 📉 U.S. Manufacturing Renaissance Faces Big Labor Gaps: While Nvidia and Apple pledge hundreds of billions in U.S. investment, rebuilding a domestic supply chain is proving difficult. The U.S. lacks both the skilled labor and tooling infrastructure to compete with Asian manufacturing powerhouses. Despite broad public support for manufacturing jobs, few Americans are eager to fill them.

• 🇸🇻 El Salvador Refuses to Return Mistakenly Deported Man: President Nayib Bukele dismissed U.S. requests to bring back Kilmar Abrego Garcia, a Salvadoran national mistakenly deported. The Justice Department previously acknowledged the error but now claims it's not responsible for facilitating his return. Bukele called the idea “preposterous.”

• 🪪 Palestinian Activist Arrested During Citizenship Interview: ICE arrested Mohsen Mahdawi, a Columbia graduate student and protest organizer, during his citizenship interview. Supporters, including Senator Bernie Sanders, call the arrest retaliatory and unconstitutional. Authorities allege his activism threatens U.S. foreign policy interests.

• 🌍 5.2-Magnitude Earthquake Shakes Southern California: The quake hit near Julian, California, and was felt throughout San Diego and Los Angeles. No major injuries were reported, but officials are monitoring for aftershocks. Residents described intense but brief shaking across the region.

• 🏆 Vice President JD Vance Drops Ohio State’s Championship Trophy: While presenting the trophy to the Buckeyes, Vance accidentally dropped it, detaching its base. He later joked online that he was trying to prevent future teams from winning it. No injuries were reported—except to the trophy’s pride.

• 🏫 Trump Freezes $2.2B in Funding to Harvard Over Antisemitism Standoff: After Harvard rejected proposed federal policy changes tied to its handling of antisemitism complaints, the Trump administration froze over $2 billion in grants. Harvard’s president said the school won’t compromise its independence or constitutional rights. Columbia University, by contrast, agreed to similar demands to regain federal support.

• 💇‍♀️ ‘Recession Hair’ Trend Signals Consumer Spending Pullback: Young women are cutting back on salon visits and embracing low-maintenance styles like “recession blonde” to save money. Beauty industry data shows rising interest in DIY options like press-on nails. Economists view these spending shifts as a bellwether for broader economic softness.

• 👨‍👩‍👧‍👦 Small Business “Nepo Babies” on the Rise: The number of small businesses employing adult children of the owner has doubled since 2018. Analysts say it reflects both a lack of entry-level opportunities for young people and succession planning by older owners. The rise of family-run firms is reshaping the small business landscape.

• 🔥 Man Charged With Arson at Pennsylvania Governor’s Residence: Cody Balmer allegedly threw Molotov cocktails into Governor Josh Shapiro’s home while the family was celebrating Passover. Authorities say Balmer intended to assault the governor with a hammer and has confessed to the crime. He faces charges including attempted murder and terrorism.

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