The unemployment rate hits a 12-month low... But it's not all good news... A 'pause' on rate cuts... AI clouds the jobs picture... OpenAI is coming to the White House portfolio... Why Whitney Tilson believes OpenAI's IPO is on the ropes...
A light, but positive, month for job gains...
In June, the U.S. economy added 57,000 jobs, according to the Bureau of Labor Statistics' nonfarm payrolls report this morning. While that was the fourth straight month of job gains, it was the lowest level since February... and came in well below Wall Street's estimate of 115,000 jobs added.
Still, positive jobs numbers are nothing to sneeze at. And the unemployment rate fell from 4.3% in May to 4.2% in June, marking the lowest level in 12 months.
However, the recent slowdown in job gains (from 214,000 in March to "only" 57,000 in June), combined with the big miss of Wall Street expectations, has many worried the labor market is on shaky ground.
That's having an impact on where the market sees interest rates headed for the rest of 2026. You see, a weakening labor market could push off future rate hikes...
Going into the report, federal-funds futures traders were pricing in a 65% chance of a Fed rate hike in September. But right after the report this morning, traders were putting just a 50% probability of a rate hike at the September meeting. The majority of traders are now pricing in the first full rate hike for October.
That's welcome news for investors. Rate hikes battle inflation by making it more expensive for companies to borrow and slowing growth. So higher interest rates are a bad sign for the economy and the stock market.
With the jobs report possibly putting a "pause" on rate hikes, stocks briefly headed higher today – with all three major U.S. indexes posting gains in the early morning. However, the Nasdaq Composite Index closed lower.
We also saw another day of profit-taking in the semiconductor sector, with the VanEck Semiconductor Fund (SMH) falling 4%, down more than 8% from Tuesday's close. That weighed on the Nasdaq and other tech stocks. But the Dow Jones Industrial Average climbed to a new all-time high.
AI is clouding the jobs picture...
In Challenger, Gray & Christmas' monthly layoff report, AI remained the top reason for layoff announcements. While June's layoffs fell 53% from May to about 46,000, most of them still came in the tech sector. And AI accounted for 31% of layoffs.
As Challenger, Gray & Christmas' Chief Revenue Officer Andy Challenger explained in the release...
Tech remains the epicenter of this year's cuts. AI is the dominant force as companies are restructuring around it, automating roles, and reallocating budgets toward new capabilities. The sector is being reshaped in real time.
So far in 2026, AI has been cited as the reason for more than 100,000 job cuts – about 23% of all cuts in 2026. In fact, AI has been behind more layoffs this year than in the three-year period from 2023 to 2025, when Challenger began tracking AI as a reason for layoffs.
But some companies are already regretting their AI layoffs...
As CNBC reported yesterday, several companies are hiring back workers after their AI plans didn't work out. From CNBC...
Automaker Ford is one of the latest companies to reverse course. It is reportedly reemploying hundreds of experienced human engineers to work on quality issues automated systems couldn't address.
Ford Motor (F) isn't the only one. The Commonwealth Bank of Australia found out that AI voice bots couldn't replace human workers, with the company adding that it "should have been more thorough in [its] assessment" of what AI could handle.
So on the one hand, companies are still laying off employees at high rates due to AI. That helps fuel the "AI doom loop" scenario where we all lose our jobs. But replacing workers with AI isn't going as smoothly as some companies had hoped. And now they're turning back to human workers to get the job done.
One thing is certain. AI will continue to cause plenty of noise and volatility in the labor market over the coming years.
OpenAI offers itself to the White House portfolio...
The AI startup is considering offering the U.S. government a 5% stake in its company, according to a report from the Financial Times. OpenAI CEO Sam Altman views a government stake as a way to spread out the success of AI.
And it's not just OpenAI. Altman's plan would see the government take a stake in all U.S. AI companies, including Anthropic and even Alphabet (GOOGL) and Meta Platforms (META), according to CNBC.
At OpenAI's recent valuation of $730 billion, the stake would be worth a little more than $42 billion.
AI does fit into the White House portfolio's "national security" theme.
As we've covered (notably here and here), the White House has taken stakes in several companies with a national security angle – like critical mineral miners and domestic semiconductor producers.
In early June, President Donald Trump signed an executive order titled "Promoting Advanced Artificial Intelligence Innovation and Security" to address emerging cybersecurity risks. From the order...
Advanced AI capabilities make our Nation stronger, but also introduce new national security considerations that require coordinated action across executive departments and agencies (agencies), and components. As these capabilities evolve, my Administration will continue to work closely with [the] industry to ensure that the best and most secure technology is deployed rapidly to confront any and all threats to our country.
Specifically, the order calls for the Department of Defense to "prioritize the cyber defense" of its data systems.
OpenAI signed a $200 million deal with the Department of Defense last year, while the Pentagon has also awarded $800 million to OpenAI, Anthropic, xAI, and Google for various AI applications.
So AI – and startups dedicated to cybersecurity – would be a natural fit into the White House portfolio.
But you may have to wait to buy OpenAI yourself...
Last week, the New York Times reported that OpenAI would not be going forward with an initial public offering ("IPO") in 2026, instead favoring an early 2027 date for its public debut.
OpenAI confidentially filed its S-1 filing (which discloses everything needed for a company to go public) with the Securities and Exchange Commission on June 8 – a week after rival Anthropic filed its own S-1, and just days before SpaceX (SPCX) began trading.
At the time, OpenAI released a statement saying it had not decided on a timeline for going public because "there are things we want to do that are likely easier as a private company."
The New York Times cited recent market volatility (the tech-heavy Nasdaq 100 Index fell 7% in early June) as a key reason that OpenAI is delaying its IPO plans.
SpaceX's recent IPO was another reason... the stock popped in its first days as a public company, but now sits more than 25% off its highs.
The report did not come as a surprise to our colleague and Stansberry's Investment Advisory editor Whitney Tilson. As Whitney wrote in the June 17 edition of his free daily e-letter, OpenAI will have to disclose its financials before going public.
And when those financials become public, it could be a real problem for OpenAI. From Whitney...
When investors digest these horrific numbers, I think they're going to reject the $1 trillion-plus valuation OpenAI is hoping for – even in this environment of extreme valuations for anything AI related.
Whitney even believes there's a chance that OpenAI scraps its IPO altogether, calling the company a "cash-burning furnace."
It's the type of company most investors should stay clear of. Instead, we recommend owning high-quality, durable, and capital-efficient companies in your portfolio.
New 52-week highs (as of 7/1/26): Air Products and Chemicals (APD), Chemed (CHE), Quest Diagnostics (DGX), Equity Residential (EQR), Illumina (ILMN), Linde (LIN), Palo Alto Networks (PANW), Snap-on (SNA), Travelers (TRV), and Valero Energy (VLO).
One housekeeping note before we get to the mail... The U.S. markets and our offices are closed tomorrow for the upcoming Fourth of July holiday. We'll pick things back up on Monday following our weekend Masters Series.
In today's mail, feedback about the 250-year-old pine tree discussed in yesterday's mail... Do you have a comment or question? As always, e-mail us at feedback@stansberryresearch.com.
"Wow, what a historically amazing story from subscriber S.R.S. about the pine tree. Too bad such a magnificent tree couldn't be saved." – Subscriber Sherwin R.
All the best,
Nick Koziol
Baltimore, Maryland
July 2, 2026
