Andrew here. What is Howard Lutnick’s endgame? Lutnick, the former Wall Street C.E.O. who’s now the commerce secretary, has been leading the charge for the government to take stakes in U.S. businesses. We now have a better idea of the animating idea behind all of it: a special investment fund. More on that below.
And Jamie Dimon of JPMorgan Chase is warning that the economy is weakening. We break down a roaring debate about what’s happening.
Lutnick’s “investment accelerator” plan
It’s hard to rank the economic policy norms the Trump administration has broken, given how many have been shattered — in trade, regulation, etc. But many of the moves have been carried out by Commerce Secretary Howard Lutnick.
Those actions, including extracting an equity holding in the chipmaker Intel in exchange for federal funds, surprised corporate leaders, who had seen Lutnick as an ally. And, as Ana Swanson reports in The Times, what he’ll actually accomplish from them is far from certain.
Lutnick’s goal is becoming clear: to set up a so-called investment accelerator, which he has described as a “national and economic security fund” within the Commerce Department, according to The Times. It’s led by Michael Grimes, Morgan Stanley’s former star tech banker, and David Shapiro, a former partner at the law firm Wachtell, Lipton, Rosen & Katz.
That project is meant to be funded by the hundreds of billions of dollars that countries like Japan and South Korea have pledged to invest as part of their trade deals, The Times reports. It has taken control of tens of billions of dollars from the CHIPS Act, which led to the Intel deal; Lutnick has suggested that the government may also seek holdings in defense and shipbuilding companies.
(That said, Lutnick’s efforts haven’t always been successful: Officials at Customs and Border Protection fought off his plan for an External Revenue Service that would have given him more control over tariff revenue.)
Lutnick has been clear in his objective: making money for the government. “America should have shares,” the commerce secretary told Intel’s C.E.O. in a video on social media, “because it’s just fair.”
It’s in line with President Trump’s history of promoting his deal-making prowess — and with Lutnick’s background as the former C.E.O. of the Wall Street brokerage Cantor Fitzgerald.
Lutnick’s approach has its costs, critics say. It has made some corporate executives wary of asking the administration for help, fearing they may be asked to give up something in return, as Intel did. (That’s a change in attitude from earlier this year, when company advisers told DealBook they considered Lutnick one of their go-to contacts in the administration.)
“The whole thing strikes me as kind of a shakedown,” Greg Mankiw, the Harvard economist who advised George W. Bush, told The Times. “It’s like when the mob comes to visit: ‘Nice business you have here. I wouldn’t want anything to happen to it.’”
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In related news: The Supreme Court agreed to fast-track a review of Trump’s tariffs. And the president said trade talks with India would soon resume, expressing expectations for “a successful conclusion.” But he also urged the European Union on Tuesday to impose stiff tariffs on India and China over their buying of Russian oil.
HERE’S WHAT’S HAPPENING
Klarna prices its I.P.O. above expectations. The financial technology company priced its shares at $40 on Tuesday, significantly above the $35-to-$37 range it had forecast, valuing it at about $15 billion as investor demand proved robust. It’s the latest strong showing for I.P.O.s this year, particularly for well-known and fast-growing tech businesses.
Lisa Cook can stay on the job for now. A federal judge ruled that Cook, the Fed governor whom President Trump is seeking to fire, can continue to serve as she contests allegations that she committed mortgage fraud (before joining the Fed). The legal fight is being closely watched to determine the future makeup of the bank’s rate-setting committee and the extent of presidential powers over the independent Fed.
Apple unveils a thinner iPhone model. At its annual product event on Tuesday, the tech giant announced the iPhone Air, its first major redesign since 2017, as well as updates to other models. (It also introduced revamped AirPods and Apple Watch.) But investors appeared indifferent to the news — Apple’s shares closed down nearly 1.5 percent — as analysts pay more attention to the company’s artificial intelligence efforts.
A “weakening”
Even with the S&P 500 at a new high, Wall Street leaders, including Jamie Dimon of JPMorgan Chase, are getting uneasy. Trump administration officials, too, are beginning to change their tune about the economy.
The latest gut checks will come with Wednesday’s Producer Price Index report and Thursday’s Consumer Price Index data, which are expected to show that inflation is still rising. They will arrive after Tuesday’s disappointing payroll-data revisions, which underscored what many economists had feared: The labor market is deteriorating.
The glass-half-full take for investors: Inflation fears may weigh on markets in the long term, but for now the focus is on a hiring slowdown. That has lifted the odds for interest-rate cuts — the futures market is penciling in four to five cuts over the next seven rate-setting meetings — and fueled a mini stock rally.
It will be worth watching to see if the futures predictions match the Fed’s internal forecast, which will be disclosed next week.
The glass-half-empty take: The health of the economy is now in question. It “is weakening,” Dimon told CNBC on Tuesday, adding, “Whether that is on the way to recession or just weakening, I don’t know.” He singled out as a bad sign Tuesday’s preliminary payroll revision from the Bureau of Labor Statistics, which showed that employers probably added 911,000 fewer jobs in 2024 and early 2025 than previously believed. That’s a record for this routine data adjustment.
That said, the bureau will review that figure again, and some economists expect the final number to show a slightly less disappointing picture.
The Fed is under yet more pressure to act. Treasury Secretary Scott Bessent outlined his concerns about the labor market and took a jab at the central bank for being slow to take action: “The truth: President Trump inherited a far worse economy than reported, and he’s right to say the Fed is choking off growth with high rates,” he wrote on X.
Is the administration’s narrative shifting? Bessent’s observation stands in contrast to the White House’s assessment this summer. In July, the administration published a fact sheet detailing how the “economy is back on track” under Trump, citing rosy retail sales and consumer-sentiment reports, and how Trump’s tariffs were bringing billions of dollars into government coffers.
Two weeks later, the Labor Department released a downbeat jobs report, showing big downward revisions for previous months. (Hours later, Trump fired the head of the B.L.S.)
Make no mistake: Tuesday’s data does show economic weakness. While the report isn’t quite as bad as the headline figure would indicate, it “suggests the labor market had less momentum heading into the trade war” this spring, Sal Guatieri, a senior economist at BMO Capital Markets, wrote in a note to clients on Tuesday. He added, “Recent data suggest the market has downshifted further.”
“It’s going to take a bit of dating to convince consumers to try to find out what the new Starbucks looks like.”
— Danilo Gargiulo, an analyst at Bernstein Research, on the challenge facing the coffee giant’s C.E.O. of a year, Brian Niccol. Since joining Starbucks, Niccol has focused on sprucing up stores and investing heavily in order-sequencing technology to reverse a sales slump.
Nvidia’s doomer lobbying
As it looks to strengthen ties with the White House, Nvidia plans to invest hundreds of billions of dollars in U.S.-made chips and electronics over the next four years. It is clear that the company has been investing heavily elsewhere in Washington, too.
Tripp Mickle and Cade Metz of The Times reveal the chip giant’s unconventional lobbying efforts. A central goal: to stop a proposal by Republican lawmakers to restrict sales of A.I. chips to China. A key vote could happen as early as next week. The company is tarring the rules as the product of left-wing paranoia peddled by artificial-intelligence doomers.
What’s at stake:
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As things currently stand, Nvidia could make up to $50 billion in A.I. chip sales to China over the next year, but the proposed rules would require it to prioritize sales of its A.I. technology to American companies.
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Nvidia sits at the heart of President Trump’s industrial policy, which has taken on a pay-for-play feel. Nvidia agreed in August to pay the U.S. government a 15 percent cut of chip sales to China in exchange for export licenses.
Nvidia’s criticism has baffled Republicans. They see A.I. export restrictions as necessary to bolster national security and protect U.S. economic and military leadership. Senator Jim Banks, the Republican of Indiana who introduced the measure, has defended it as an “America First amendment.”
Nvidia’s criticism of Republicans centers on an esoteric Silicon Valley dispute between accelerationists, who want to speed A.I. to unlock economic value, and doomers, who worry that the technology’s unfettered growth could harm humanity. Doomerism is believed to stem from a philanthropic movement called effective altruism, or E.A.
Nvidia has powerful allies in Washington, including David Sacks, the White House A.I. czar. He has said supporters of export regulations should be “Loomered” — code for encouraging Laura Loomer, a far-right agitator who has lobbied Trump to fire employees, to get them dismissed.
Nvidia and Sacks have also criticized RAND Corporation, a federally funded think tank led by Jason Matheny, a former Biden administration official who has ties to the E.A. movement. Nvidia’s lobbying has contributed to the dismissal of at least one member of the Commerce Department who was partly paid by RAND, people familiar with the issue told The Times.
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In other A.I. news: Oracle shares rallied in premarket trading after it announced a rosy outlook on Tuesday, especially for its cloud data-center business. It recently announced a deal with OpenAI and counts Nvidia and TikTok as customers.
THE SPEED READ
Deals
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Reflection AI, a start-up in artificial intelligence coding, is said to be close to raising money from investors including Nvidia at a $5.5 billion valuation. (FT)
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Elliott Investment Management has reportedly taken a stake in BILL Holdings, joining Starboard Value in potentially challenging the payment company’s strategy. (Reuters)
Politics, policy and regulation
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“‘He’s a nut’: Hill Republicans sour on Trump housing official Bill Pulte” (Politico)
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Zohran Mamdani has a commanding lead in the New York mayoral race, a new poll found, though that would shrink if one of his rivals dropped out. (NYT)
Best of the rest
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Cracker Barrel suspended renovations of its restaurants after it stopped plans to revamp its logo in response to public criticism. (CNN)
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The reading skills of American 12th graders hit a new low, and a UNICEF study found that more children worldwide were obese rather than underweight. (NYT, BBC)
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“I Watched Globalization Fail. I’m Worried About What Comes Next. ” (Politico)
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Andrew Ross Sorkin is a columnist and the founder of DealBook, the flagship business and policy newsletter at The Times and an annual conference.
Bernhard Warner is a senior editor for DealBook, a newsletter from The Times, covering business trends, the economy and the markets.
Sarah Kessler is the weekend edition editor of the DealBook newsletter and writes features on business.
Michael J. de la Merced has covered global business and finance news for The Times since 2006.
Niko Gallogly is a Times business reporter, covering diversity and environmental and social justice efforts in corporate America. Email them at [email protected].
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