Business & Markets — August 2, 2026

U.S. Treasury backs yen in first-ever joint move. The Treasury intervened in currency markets alongside Japan this week to support the battered yen, Washington's first-ever joint intervention to prop up Japan's currency and a significant policy shift.

According to Reuters, Washington had never before joined Tokyo in currency-market action aimed at strengthening the yen, making the coordinated step a notable departure from past U.S. practice. The move followed sustained weakness in the Japanese currency, which Reuters described as battered. Details on the scale of the operation and its longer-term effect on exchange rates were not provided in the report.CNBC, the intervention signals a broader change in how the U.S. approaches Japan's currency.

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AI hedge fund collapses in fire sale. Leopold Aschenbrenner's $45 billion Situational Awareness fund lost roughly 67% of its value in July after a momentum reversal triggered margin calls. Its entire public portfolio went to Citadel in a fire sale.

Aschenbrenner, a former OpenAI researcher, had built the AI-focused fund to a $45 billion valuation before the July downturn, according to CNBC. The losses stemmed from what the outlet called a historic reversal in momentum trades, which forced the fund to meet margin calls it could not absorb. The liquidation of its public holdings to Citadel unwound the portfolio in a matter of days rather than through an orderly sale.

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AI trade splits Big Tech earnings. Microsoft rose 9% this week on Azure and Copilot growth while Meta fell nearly 9% on AI spending concerns; Amazon gained as Apple declined on supply-constraint fears.

CNBC reported that the diverging results mark a shift in how investors treat artificial intelligence stocks, moving from broad enthusiasm to sorting companies into winners and losers. Microsoft's cloud and AI-assistant businesses drove its gains, while Meta's heavy cash outlays on AI unnerved shareholders despite the same underlying technology theme. The split suggests earnings execution, not AI exposure alone, is now determining which Big Tech names attract capital.

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