By Heard on the Street Staff

This is an edition of the Markets P.M. newsletter, a recap of the day's most important markets moves, delivered after the closing bell. If you're not subscribed, sign up here.

What Happened in Markets Today

A famed short seller increased his bets against the AI boom. Michael Burry, famous for his prescient bets against the housing bubble, unveiled bearish positions on Tesla, Caterpillar, semiconductor manufacturer Applied Materials and an ETF tracking chip makers. Burry said that plans by two of South Korea's largest tech companies to build a chip hub set off fresh alarm bells about whether the massive sums of money being poured into AI can ever pay off.

Chip stocks declined. The PHLX Semiconductor Index, which is tracked by the ETF that Burry is betting against, fell 6.3%. Writing on his Substack on Tuesday, Burry called the ETF "a pure form of overvaluation in an index, a form that is rarely seen and never so easily recognized as such." But stocks overall were little changed, with the S&P 500 ending down 0.2%.

General Mills rallied. The maker of Cheerios rose 8.5% after it reported quarterly results that topped expectations for adjusted profit and sales. It said earlier price cuts had paid off in a sales boost. "Rather than hope for the consumer to improve, we are moving with even greater urgency to meet consumers where they are and capture more of the growth that's currently available," said CEO Jeff Harmening. The results boosted other food names as well, with Campbell's for instance rising 5.4%.

New Fed Chair Kevin Warsh remained cryptic on inflation. Speaking at a central bankers conference in Portugal Warsh declined to say Wednesday whether the central bank needed to consider a rate increase later this month but said his first weeks in the job have seen risks of higher inflation recede. At the same time however he acknowledged that current inflation is too high, saying that anyone expecting the Fed to tolerate inflation running above its 2% goal "would be disappointed."

Markets at a Glance

One Big Story

One question has dominated the annual gathering of the world's top central bankers and economists: Is artificial intelligence a boon or a threat to the global economy?

Economists at the European Central Bank's symposium have laid out a number of reasons to be worried: rising debt issuance from AI hyperscalers, increasing leverage used by investors to bet on AI and rising unemployment if the technology replaces jobs.

What's Coming Up

  • The closely watched jobs report for the month of June will be released Thursday instead of Friday due to the July 4 holiday.

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About Us

Markets P.M. catches you up on the day's most important markets moves, delivered after the closing bell. This email was written by Aaron Back, Editor of Heard on the Street, The Wall Street Journal's home for financial analysis and commentary. To send us your feedback, reply to this email. Got a tip for us? Here's how to submit.