Goldman Sachs has instructed employees to limit their prediction market betting to sports and entertainment to mitigate compliance risks related to material nonpublic information. The bank's policy, detailed in an internal memo, comes as platforms such as Kalshi and Polymarket gain popularity for bets on a range of events, including elections and financial markets. The policy warns that repeated violations could result in termination.

Immigrants lacking authorization to work in the US might pose "elevated credit risk" due to uncertainty around their employment and income and the potential of deportation, according to guidance issued by the Office of the Comptroller of the Currency, the Federal Deposit Insurance Corporation and the National Credit Union Administration. The guidance, which does not appear to create new requirements for financial institutions, was issued in light of President Donald Trump's executive order focused on the use of financial services by people living in the US without legal permission.

JPMorgan Chase, Bank of America, Citigroup, Wells Fargo and Goldman Sachs reported earnings before markets opened today, with strong equities trading revenue helping support results across the largest US banks. JPMorgan CEO Jamie Dimon said all major businesses saw record revenue in the second quarter and that the US economy has shown "notable resiliency this year, with stronger business investment and hiring."

Polymarket is seeking approval to offer margin trading in the US, a move that could make prediction-market contracts more capital efficient for institutional and sophisticated traders. The platform applied for a futures commission merchant license and must also win Commodity Futures Trading Commission approval for rule changes allowing non-fully collateralized event trading.

Options brokers with niche expertise are thriving despite the rise of automation and AI, with agency brokers adding value in fragmented markets by sourcing better pricing from multiple counterparties. Andy Kent of Kyte Broking highlights the challenges of liquidity in Europe and the potential for increased volatility due to rate hikes, geopolitical tensions and the upcoming US midterms.

Concerns about prediction market exchange-traded funds have surfaced during the Securities and Exchange Commission's public feedback period, with early respondents warning that such products could encourage speculative behavior and heighten investment risk. Critics argue that tying ETFs to events without inherent economic value -- such as election outcomes -- amounts to financializing wagering and could turn investing into a form of gambling.

The Financial Conduct Authority has reported that suspicious trading activity occurred before 41% of UK takeover announcements last year, a record high. The FCA said this has raised concerns about leaks and insider trading amid increased market volatility.

Investors are increasingly cautious as tech companies, including Nvidia, SpaceX and Amazon, issue a significant volume of bonds to finance artificial intelligence infrastructure. Investors are not worried about the companies' creditworthiness but are concerned about the potential for a continuous flood of new bonds.

Citigroup CEO Jane Fraser has revitalized the bank by selling assets, cutting tens of thousands of jobs and fostering a competitive culture, regaining market value lost since the financial crisis. However, some employees worry about the aggressive culture, and Citi remains less profitable than JPMorgan and Bank of America.