Business

1. ‘Sell America’ trade is back
2. Satya Nadella’s humble pitch
3. Cantor Fitzgerald, Beltway sherpa
4. Elliott goes to the mat
5. Klarna’s credit crunch?

Elon Musk says “no doubt” he’ll run Tesla for another five years…

“Who cares?” was Treasury Secretary Scott Bessent’s response to Moody’s downgrading the US credit rating on Friday. “Qatar doesn’t, Saudi doesn’t, UAE doesn’t,” he said on Meet the Press Sunday, rattling off deals cut during President Donald Trump’s trip through the Middle East last week. “Moody’s is a lagging indicator. I think that’s what everyone thinks of credit agencies.”

Bessent is right that sovereign ratings actions can be backward-looking and a bit performative. But his choice of investors there is selective — Gulf states have their own geopolitical reasons for doing deals — and ignores a growing revolt among Treasury buyers, who are demanding higher interest rates to lend to Washington.

Imagine a corporate CFO being so flippant about a ratings downgrade. The US government of course isn’t a business (no company could keep a ledger this lopsided) but the Trump administration is trying to run it more like one — in stunty ways like DOGE, but also in more substantive ways that sound reassuringly familiar to some in the business world. Bessent talks about America’s balance sheet in terms that wouldn’t be out of place on a corporate earnings call: what’s overvalued (its currency), what’s undervalued (land, gold, airwaves, art, and even its largesse in funding scientific research), and how to close the gap.

So it’s a strange time for America’s CFO to tell huge swathes of his investor base he doesn’t care about them. Trump’s “big, beautiful” tax bill would add trillions to the US deficit, and even fiscal doves are starting to sound the alarm. Treasury bondholders have underwritten decades of overspending by both parties, and Bessent is about to try to steer a big spending increase through a closing window of their indulgence.

The Sell America trade is back on

Markets have sunk back into their post-“Liberation Day” funk, and the gloom today is more palpable than it’s been in weeks.

It’s not just the Moody’s downgrade: The S&P 500 snapped a seven-day winning streak on Friday, bond prices and the US dollar are both falling, and finance heavyweights are noting that the US looks less attractive than other parts of the world. Questions around Republicans’ spending bill, which could get a floor vote this week, add to the jitters.

“The ultimate forcing function isn’t what Moody’s or S&P says — it’s market prices,” Adam Abbas, head of fixed income at Harris | Oakmark, a division of Natixis, tells Semafor. “As the administration’s policies come more clearly into view, and it gets more difficult to hand-wave around the deficit, the market is voting with its feet.”

• JPMorgan’s Jamie Dimon: “American asset prices — I still think they’re kind of high… I think credit today is a bad risk,” the CEO of the largest US provider of credit said yesterday.
• “Something deeper is going on,” Citi’s CEO Jane Fraser wrote in a rare and gloomy blog post Friday that noted the bank’s clients are shifting toward Japan, India, and parts of Europe. “Long-held assumptions are being challenged, not just by tariff announcements but by a deeper confidence shock.”
• Apollo Chief Economist Torsten Sløk on Monday highlighted declining participation by foreign investors in US Treasury auctions. And KKR’s Henry McVey wrote this morning that “the traditional role of US government bonds in many global portfolios will become more diminished.”

Counterpoint: Selling America is expensive, Bloomberg’s Tracy Alloway points out. Wagering on asset prices to fall — selling them short — requires upfront payments, and the US’s historical outperformance means those payments are relatively high, even with all the current chaos. America may be able to keep it together longer than investors can stomach the costs of betting on its unspooling.

Microsoft’s Satya Nadella aims for invisible scale

Can Microsoft fade into the background? In an interview with Semafor’s Reed Albergotti, CEO Satya Nadella said the tech giant’s goal is to become a bigger and bigger part of its customers’ lives — but an increasingly invisible one. AI that just works, requiring fewer faces glued to phones, is key to a future “where computing is everywhere and nowhere,” he said. Nadella’s recruiting pitch these days: “If you want to be cool, go join somebody else. If you want to make others cool, join Microsoft.”

It’s a modest goal for most Big Tech CEOs, but on-brand for Nadella, who revived Microsoft’s fortunes post-Ballmer and has overseen one of the most profitable journeys in business history without the fanfare or drama that seem to follow some of his peers. It may require humility from others, too: Microsoft is bringing Elon Musk’s Grok AI model to its cloud-computing platform, a move that could inflame tensions with OpenAI, whose CEO Sam Altman has a long and litigious history with Musk.

As software development expands to vibe coders everywhere, Microsoft is betting on being the infrastructure for AI, not its public face. That will likely mean fewer developer jobs at big tech companies: Nadella, who wrote his first blog post as CEO a decade ago about what he called “ambient intelligence” says as much as a third of his own company’s software is now written by AI.

TMSC turns to Wall Street friends to navigate DC

TSMC, the Taiwanese chips giant of strategic importance to the US, has big business before the White House, from CHIPS Act funding to discussions of a potential tie-up with Intel. To navigate Washington, the $1 trillion company has sought advice from an unlikely place: middle market investment firm Cantor Fitzgerald, Semafor’s Rohan Goswami reports.

Bankers at the firm, run for decades by Commerce Secretary Howard Lutnick — and, until this week, majority-owned by him, too — have been providing informal advice to government-affairs executives at TSMC, according to people familiar with the matter.

TSMC’s senior leadership separately met with Lutnick in his Midtown offices earlier this year — a meeting requested by Lutnick as he prepared to become Commerce Secretary. He had by then stepped away from day-to-day management of Cantor, installing his two sons in nominal control of the firm.

TSMC isn’t paying Cantor for its advice, one of the people said, but its in-house lobbyists have turned to its bankers to understand Lutnick’s thinking. And Cantor bankers have referenced a relationship with TSMC, whose customers include Apple and Nvidia, in new business pitches, according to one of the bank’s clients.

“The statements regarding Cantor Fitzgerald are baseless and false,” a spokesperson for the firm said. A spokesperson for TSMC declined to comment. “Secretary Lutnick has been focused on delivering President Trump’s directive to reshore manufacturing back to the United States,” a Commerce spokesperson said.

Phillips 66 fight heads to a vote

One of the corporate world’s most feared activists will soon have to prove why at the ballot box. Phillips 66 investors will vote tomorrow on a slate of board members put forth by hedge fund Elliott, which wants to break up the company. Barring a last-minute settlement, it will be the first time that Elliott has taken a proxy fight to a vote.

Elliott manages nearly $73 billion in assets and in recent years made a big push into private equity, snapping up companies like Barnes & Noble and Citrix. But anyone expecting that shift into dealmaking to shave Elliott’s edges was mistaken: Its fight against Phillips 66, a struggling household name that owns a portfolio of refineries and gas stations, has been a bruiser and shows no signs of settling. Elliott has criticized Phillips’ conglomerate model and the company’s board, which it says is intent on preserving the status quo at shareholder expense.

Young BNPL lenders face first downturn

The bill (and check) are both in the mail: Quarterly losses at online lender Klarna doubled as more customers missed payments.

Klarna’s credit losses remain low at 0.54% of total payment volumes, but have edged up from a year ago at a time when consumers are feeling worse about the economy. Buy-now-pay-later borrowers are more financially strapped than other consumers, Federal Reserve studies have found, raising questions for firms like Klarna and Affirm, relatively new companies that haven’t been through a sustained economic downturn. (Klarna reported yesterday that it had hit 100 million active customers.)

Affirm’s chief operating officer, Michael Linford, called it an “unbelievably fair question” in a recent interview with Semafor. “The way we’ll navigate it is that we would trade off growth for credit in our business,” Linford said — in other words, be choosier about whom to lend to, even at the expense of delivering customer growth that shareholders want to see.

About 42% of Affirm’s customers are subprime, but Linford noted that the company’s default rate of around 2% in the first quarter is lower than credit card companies. He said that’s partly because Affirm decides whether to lend on a transaction-by-transaction basis, rather than just once, when a customer signs up, like card providers do. And customers who’ve gotten used to BNPL loans don’t want to be cut off, and so prioritize repayment.

Still, Linford said, “We don’t really know, and I’m not sure anybody’s going to stop asking us until we get through a real, meaningful cycle.”

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➚ BUY: Wind. A giant New York wind farm is moving ahead with construction after the Trump administration reversed its work-stop order. Owner Equinor, the Norwegian utility, had been losing $50 million a week on the idled project.

➘ SELL: Earth. Rio Tinto struck a $1 billion lithium deal with the Peruvian government — continuing its all-in strategy despite a glut of the rare earth metal.

Companies & Deals

• Constructive feedback: Home Depot said it won’t raise prices to account for tariffs, breaking with other retailers that plan to pass the cost of Trump’s trade war on to customers. Shares were flat despite an earnings miss, suggesting investors see value in avoiding a public callout from the president, who said Saturday that Walmart should “eat” higher costs.
• Greenfield greenbacks: Nippon Steel has offered $11 billion more in investments to win White House approval for its takeover of US Steel, and is willing to build a brand new steel mill in the US as part of that package.
• Talking heads: UBS is using AI to turn its analysts into avatars for video research briefings. On the other end of the pay scale, Klarna presented its quarterly earnings yesterday via an AI-generated avatar of its CEO.
• Genetic markdown: Biotech giant Regeneron will buy DNA testing company 23andMe out of bankruptcy. The once-revered firm that helps customers trace their ancestry through DNA testing reached a valuation of $6 billion in 2021, but will be purchased for $256 million.
• Supercharged: Tesla’s CFO received a record $139-million paycheck in 2025, the highest for any finance chief and more than most CEOs’. (Elon Musk’s 2018 $50-billion-plus package is still tied up in the courts and the company is at work on another, according to an April securities filing.)

Watchdogs

• A very stable GENIUS: The US Senate advanced, on its second try, a bill to regulate stablecoins, the latest sign of crypto going mainstream. Sixteen Democrats, mindful of the $40 million the crypto industry spent to defeat Sen. Sherrod Brown last year, voted yes. Sen. Elizabeth Warren, who voted against the bill, told Semafor she’ll propose an amendment that would ban members of Congress and the president from being able to “buy, sell, or trade” crypto, taking aim at the Trump family’s lucrative side gig.
• Acts of commission: “We are pulling apart our own regulatory foundation,” Caroline Crenshaw, the only remaining Democratic SEC commissioner, said in a speech yesterday, warning that a “reckless game of regulatory Jenga” invited another 2008-style financial crisis.

Markets

• CATL-yst: Shares of the battery maker surged 17% in its $4.6 billion Hang Seng debut, with little help from American investors, who were largely shut out of the biggest global stock offering of the year. China bear Stephen Roach warned that shares of Chinese companies listed on US exchanges could be the next casualty of trade tensions.

Republicans and Democrats alike are open to loosening sanctions on Syria as President Donald Trump seeks to give the new government a “chance of greatness,” Semafor’s Burgess Everett and Shelby Talcott report.

Lawmakers are also wondering whether the administration removes the lingering terrorist designation on the new Syrian president, Ahmed al-Sharaa, according to several GOP sources.