Starbucks is closing stores and laying off staff, why there are concerns about the AI trade

Market Trends & Economic Data - US economy shows strength with jobless claims less than expected and GDP growing more than economists anticipated, led by fewer imports and robust consumer spending [5] - There's an approximately 85% probability of a 0.25% rate cut at the October meeting, down from over 90% previously expected [6] - The US dollar is trending upwards, increasing by about 0.3% this morning and almost 1% in the last 5 days [6] - Investors are closely monitoring economic data for signs of a more subdued Fed, reinforcing the market's expectation of rate cuts [8] Company Performance & Strategies - Starbucks is laying off 900 employees as part of a $1 billion restructuring plan and closing approximately 1% (100 stores) of its store base [10] - Starbucks aims to reinvest in creating a coffee house culture with more staff and a better consumer experience [14][15] - Charles Schwab clients are highly engaged, with trading up about 30% year-over-year, increased margin balances, and more options usage [31] - Charles Schwab plans a significant push into the crypto space in early 2026, launching spot crypto in the first half of next year [30][52] Investment & Market Outlook - Analysts suggest Oracle stock could potentially decline by about 43% [9] - Barclays believes the AI theme remains strong, comparing it to the dot-com bubble but noting key differences such as stronger financial footing for hyperscalers [24][25][26] - Charles Schwab sees a renewed interest in fixed income among retail investors, driven by declining money fund yields [40][41]