The midterms are a referendum on public trust

Good morning. The midterms are tomorrow, and the outcome will determine more than which party controls Congress. If Democrats win back the House, the Senate, or both, President Donald Trump will have a harder time securing the policies, people, and funding needed to carry out his agenda, and the right could push back. If the GOP retains control, there could be outrage on the left, some over the record $12 billion in projected campaign spending tracked by OpenSecrets, including almost half a billion by Elon Musk alone. Either way, the results will test public trust in three areas:

Trust in capitalism. Americans put up with a lot when they think they have a shot at the prize, but that sentiment is fading in this winner-take-all economy. This Fed chart shows how a rapidly increasing share of U.S. household wealth has gone to rich white Boomers since 1989. Gen Z in particular is seeing signs that the system is rigged: from record oil company profits amid rising energy prices to the unaffordability of housing, health care, and education. They’re worried AI will take their jobs. Hundreds of thousands of anti-government protesters marched across Europe over the weekend. I hear a lot of concern about more unrest here.

Trust in politics. I’ve interviewed several hundred CEOs over the past year, on and off the record, across a range of platforms and settings. Publicly, many cheer the Republican agenda on taxes, deregulation, and putting American business first. Privately, far more tell me they’re rattled by the $40 trillion national debt, the government taking ownership in large companies, the vilification of allies and immigrant talent, and the perceived need to show loyalty. And I’ve yet to meet one who’s not shocked at the alleged level of personal enrichment by the president and his family. As one CEO said at a recent dinner: “Everything good gets forgotten when there’s grift.” (A recent AP-NORC poll found 6 in 10 U.S. adults believe Trump is profiting off the presidency in unethical or illegal ways.)

Trust in business leaders. We know from the Edelman Trust Barometer that people trust their employer more than any other institution. But they don’t trust business leaders in general, especially when it comes to tech and AI. Shearwater Strategies gave me an exclusive look at their new survey on tech leadership and public trust, which polled a demographically representative sample of 1,563 Americans. When asked what they think tech leaders prioritize, 58% of participants chose “making money for themselves and shareholders.” A distant second was “creating exciting new products” at 34%. When asked what those leaders should prioritize, 58% said “protecting user safety and privacy,” while 12% cited making money. If people don’t trust that tech leaders care about safety and privacy, they’ll vote for politicians who promise to protect those interests instead.Contact CEO Daily via Diane Brady at diane.brady@fortune.com

The seemingly endless gusher of capital that’s been showered on Silicon Valley during the AI boom may be coming to an end soon. Following a brutal selloff in tech stocks over the past week, OpenAI slashed the target on its latest fundraising round to $20 billion from $30 billion, sources told the Financial Times. That also cut its expected valuation to $1.25 trillion from $1.4 trillion. Meanwhile, S&P Global cut its credit outlook on Meta to “negative” from “stable” late Friday, citing negative cash flow and uncertainty around capital expenditure ​plans.

Wendy’s fortunes have declined so much that it’s now the target of Nelson Peltz’s Trian Fund Management, which is offering to take the restaurant private for $1.4 billion, a sum that’s not even 1% of McDonald’s market value. Wendy’s promotions have fallen flat, intense competition has stolen customers, and a revolving door in the corner office has deprived it of the focus needed to get out of its rut.

Despite years of research costing billions and some successful tests, the U.S. has yet to fully field a hypersonic missile of its own due to testing complications and production issues. The tech’s been around, but it’s been expensive and difficult to produce at scale. That’s the chasm that startup Castelion, valued at $13 billion, is betting it can close, even if the defense giants have so far fallen short.

S&P 500 futures are up 0.50% this morning. The last session closed down 1.82%. The STOXX Europe 600 was up 0.05% in early trading. The U.K.’s FTSE 100 was up 0.11% in early trading. Japan’s Nikkei 225 was down 0.33%. South Korea’s KOSPI was up 2.24%. China’s CSI 300 was up 0.79%. Hong Kong’s Hang Seng was up 0.42%. India’s NIFTY 50 was up 1.21%. Bitcoin is up at $78k.

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