🇺🇲 America enters the uncharted

…and small caps’ big moment   Sponsored by Last week's market moves Dow Jones 40,288 (+0.72%) S&P 500 5,505 (-1.97%) Nasdaq 17,727 (-3.65%) Bitcoin $67,018 (+17.66%) Dow Jones 40,288 (+0.72%) S&P 500 5,505 (-1.97%) Nasdaq 17,727 (-3.65%) Bitcoin $67,018 (+17.66%) Hey Snackers, Yesterday President Biden announced on [social media]( that he was ending his run for re-election and [endorsed VP Kamala Harris]( to be the Democratic nominee for president. Of course, it’s far from a done deal who will represent the Dems at the top of the ticket, and could leave the left with its [first “open” convention since 1968](. Crypto markets dipped slightly on the news but we’ll be watching the market reaction at open today to see if they’re still [bullish on Trump 2.0](. 🧠Need a break from the political turmoil? The [Snacks Seven]( quiz tests your memory of the biggest biz news in the past week’s newsletters (including our [daily letter](). Try the first Q here: - Ray-Ban maker EssilorLuxottica said it’d buy which streetwear brand for $1.5B? ([Check your answer](.) And now for some slightly less historic news...   CAPS [Rising expectations of rate cuts and a Trump victory boost smaller US stocks]( Move over, Nasdaq… The big three US stock indexes get all the attention, but a smaller index has [snagged the spotlight](. In the five trading sessions through Wednesday, the Russell 2000 rallied 11.5%, outperforming the S&P 500 by nearly 10% — the biggest lead on record. Unlike its mega-cap peers, the Russell tracks about 2K of America’s smallest publicly traded companies. After months of Big Tech rallies, investors sold off weighty names and cozied up to smaller firms. - Mid-July rush: In the five days through July 12, investors [poured billions]( into Russell 2000 exchange-traded funds. - The Russell rally faltered late last week, but was still faring better than its larger peers. While the techy Nasdaq plunged 3.7% for the week, the Russell gained 1.7%. Going small… A few things could’ve fueled the Russell rally. One, rate-cut expectations have spiked. A cool June inflation report showed that US consumer prices fell on a monthly basis for the first time in four years. Plus, Fed Chair Powell said he was feeling more confident that inflation’s easing, boosting investor hope he’ll finally bust out the scissors. As of Friday, traders seemed certain that the Fed would trim rates in September. Rising expectations of rate cuts and of a Donald Trump victory could be boosting small caps: - Rate cuts could disproportionately help smaller firms, which tend to have higher shares of “floating-rate debt” (read: debt tied to the Fed’s rate). Rate cuts = lower interest payments on that debt. - Tax cuts: Because small companies are more domestically oriented than global behemoths, they tend to face higher tax rates. So they have more to gain from Trump’s plan to extend tax cuts should he get reelected. Traders are betting on [higher odds]( of a reelection after the former prez survived an attempt on his life. - Bonus: US-oriented smaller cos are less exposed to fallout from global trade restrictions and higher tariffs (which Trump has supported). THE TAKEAWAY The market isn’t just the S&P 500… Investors put a lot of focus on America’s biggest companies because they carry the most weight. The entire Russell 2000 is worth about $3T — less than Apple alone. But smaller businesses matter, too, and when the tables turn on mega caps, those firms can shine. [Read this online]( Sponsored by RAD AI AI Investors Back This MarTech Disrupter AI-powered content creation is red-hot for investors, but only a few have traction. Brands like Hasbro and Skechers are seeing the benefits of RAD AI — while clued-in investors from [Google, Meta and Amazon are seeing the potential](. Here’s why: 📱Award-winning AI: Poised to disrupt the $633B MarTech industry, Fortune 1000 execs partner with RAD AI. ℹ️ Big campaign returns: 3.5X ROI or across various clients, campaigns, and marketing channels for high-profile customers. 💼 Booked revenue is up nearly 3X: The last 12 months has proven that RAD’s SaaS-focused model works. It’s designed to retain enterprise clients for multi-year commitments — and it does. Backed by the Adobe Fund for Design, RAD has raised $27M+ raised from 7000+ investors. Accredited investors can get in at this valuation [with 10% in bonus shares](* for a limited time — [invest in RAD AI here](.** Sponsored by RAD AI AI Investors Back This MarTech Disrupter AI-powered content creation is red-hot for investors, but only a few have traction. Brands like Hasbro and Skechers are seeing the benefits of RAD AI — while clued-in investors from [Google, Meta and Amazon are seeing the potential](. Here’s why: 📱Award-winning AI: Poised to disrupt the $633B MarTech industry, Fortune 1000 execs partner with RAD AI. ℹ️ Big campaign returns: 3.5X ROI or across various clients, campaigns, and marketing channels for high-profile customers. 💼 Booked revenue is up nearly 3X: The last 12 months has proven that RAD’s SaaS-focused model works. It’s designed to retain enterprise clients for multi-year commitments — and it does. Backed by the Adobe Fund for Design, RAD has raised $27M+ raised from 7000+ investors. Accredited investors can get in at this valuation [with 10% in bonus shares](* for a limited time — [invest in RAD AI here](.**   EVENTS Coming up this week Can you hear me now?… America's top wireless providers, Verizon and AT&T, could ring up different earnings this week. AT&T topped Q1 estimates in April after adding 349K new wireless subscribers. But Verizon missed revenue forecasts and lost 68K subscribers as folks opted for cheaper 5G plans. Analysts expect a profit dip when it reports today. Meanwhile, AT&T’s been plagued by data breaches. This month it said a hacker stole six months’ worth of calls and texts from nearly all its customers. AT&T could share more on the fallout when it reports Wednesday. Kicking the can… Coca-Cola and Keurig Dr Pepper pop open earnings this week, and the soda giants are hoping to avoid the problems that [flattened]( Pepsi’s recent results. Pepsi’s North American bev sales volume fell 3% as price hikes pushed customers away. Analysts say Coke and Dr Pepper could face the same two-liter challenges. In Q1, price increases helped Coke’s sales grow and offset Dr Pepper’s flat volumes. Last month, Dr P tied Pepsi as America’s No. 2 soda, helped by its neutrality in the “cola wars.” It’s on more US fountains than any other soda.   ZOOM OUT Stories we’re watching Searchin’ for the Wiz… Google parent Alphabet is said to be in talks to [buy]( cloud cybersecurity co Wiz for $23B in what would be its [biggest]( acquisition ever. The move could boost Google’s cloud biz, which lags behind Amazon’s and Microsoft’s, and help it diversify (FYI: its Q1 cloud revenue was $9.6B, versus $62B from ads). The Wiz-quisition is on investors’ minds ahead of Google’s earnings tomorrow. In April, the biz said quarterly revenue grew 15% to $80.5B. Now it’s expected to report even fatter sales as it keeps pushing AI in search and cloud. X marks the bot… Elon Musk pledged to get rid of bots on X. But the platform’s revenue-share model — which pays “blue check” users for views on ads in their posts’ replies — may be [encouraging spammers]( to create networks of genAI bots that interact with one another and boost replies. Studies have ID’d thousands of spammy AI accounts, and “ignore all previous instructions” — a phrase meant to trick bots into ignoring their original prompts — has hit meme status. X rival Threads has also struggled to shut down bots, but X’s cash incentive could lead to an infestation.   ON SHERWOOD Bronson Stamp [Should the Airbnb superhost in your town have more votes than you?]( A growing number of municipalities — often vacation towns — are considering letting LLC owners vote in local elections even though they don’t live there. [Read More](.   What else we're Snackin' - [Grounded](: Passengers were stranded at airports after the faulty IT update from CrowdStrike jolted Microsoft systems. At least 23% of flights from Delta, 13% from United, and 20% from Spirit were canceled Friday. - [ETF](: Following an initial May approval by regulators, spot ethereum ETFs are expected to start trading as soon as tomorrow. Now issuers like BlackRock, Fidelity, and VanEck are competing to offer the lowest fee. - [Play](: Netflix streamed past expectations after its global paid subscribers grew 16.5% to 278M in Q2. Its cheaper ad tier saw 34% subscriber growth, but it expected overall sign-ups to slow this quarter.   Snack Fact of the Day [Video now makes up nearly 60% of the time people spend on social networks](d   This Week - Monday: World Brain Day. Earnings expected from Verizon, Truist Financial, Cleveland-Cliffs, Nucor, SAP, NXP Semiconductors, Logitech, and Brown & Brown - Tuesday: US June existing-home sales. Earnings expected from Spotify, UPS, GE Aerospace, GM, Coca-Cola, Lockheed Martin, Comcast, Philip Morris, Kimberly-Clark, Genuine Parts, Moody’s, Sherwin-Williams, Quest Diagnostics, Albertsons, Tesla, Alphabet, Visa, Texas Instruments, Capital One, Seagate, Cal-Maine Foods, Canadian National Railway, and Mattel - Wednesday: US June new-home sales. MLS All-Star Game. Earnings expected from AT&T, Chubb, NextEra Energy, General Dynamics, Boston Scientific, Old Dominion Freight Line, Chipotle, Ford, IBM, Las Vegas Sands, Whirlpool, and O’Reilly Automotive - Thursday: Weekly jobless claims. US GDP (Q2). Comic-Con. Bitcoin Conference opens; Donald Trump expected to deliver keynote on Saturday. Earnings expected from Keurig Dr Pepper, American Airlines, AbbVie, Hasbro, Honeywell, Southwest Airlines, AstraZeneca, Harley-Davidson, Sanofi, Stellantis, Union Pacific, Dow Chemical, TransUnion, Xerox, PG&E, and Skechers USA - Friday: Personal Consumption Expenditures Price Index. Paris Olympic Games begin. University of Michigan final consumer survey for July. Earnings expected from Booz Allen Hamilton, Bristol Myers Squibb, 3M, Charter Communications, and Colgate-Palmolive Authors of this Snacks own ethereum and shares of Alphabet, Amazon, Apple, Comcast, Delta, GM, Microsoft, Tesla, and Visa Advertiser’s disclosures: * A $2000 minimum investment is required to receive bonus shares. ** INVESTMENTS IN PRIVATE PLACEMENTS ARE SPECULATIVE, POSSESS A HIGH LEVEL OF RISK, ARE HIGHLY ILLIQUID, AND THOSE INVESTORS WHO CANNOT HOLD AN INVESTMENT FOR AN INDEFINITE TERM SHOULD NOT INVEST. NO ASSURANCE CAN BE GIVEN THAT INVESTORS WILL RECEIVE A RETURN OF THEIR CAPITAL. PLEASE CAREFULLY REVIEW THE [TERMS OF THIS OFFERING](, INCLUDING FEES, RISKS, AND INVESTMENT DETAILS BEFORE INVESTING.   [Instagram]( [Twitter]( [Sherwood Logo](sherwood.news) Sherwood Media, LLC produces fresh and unique perspectives on topical financial news and is a fully owned subsidiary of Robinhood Markets, Inc., and any views expressed here do not necessarily reflect the views of any other Robinhood affiliate... [See more]( [Sherwood Terms and Conditions]( [Our Editorial Standards]( [Contact Us](mailto:hello@snacks.robinhood.com) [Advertise With Us](mailto:advertising@sherwoodmedia.com) [Unsubscribe]( [Privacy Policy](