Meta Platforms faced a significant legal challenge on Tuesday as a landmark child safety trial got underway in Oakland, California, while oil prices extended gains on persistent geopolitical tensions and bitcoin briefly touched $65,000 despite elevated Treasury yields.
Meta's legal battle intensifies
Shares of Meta fell approximately 4% as investors weighed the potential financial exposure from the trial, which involves allegations from several states that the company deliberately designed Facebook and Instagram to be addictive to young users, violating child privacy and consumer protection laws. Meta has denied the allegations.
Four states—Colorado, Kentucky, California, and New Jersey—are set to appear in court as part of litigation stemming from a broader 2023 lawsuit involving 29 states. The states are seeking changes to the platforms, including restrictions on features like infinite scrolling and like counts, as well as age-related measures.
The financial stakes are considerable. Meta has indicated that penalties could reach as much as $1.4 trillion, while the four states have signaled they could seek damages approaching $200 billion for consumer protection violations, according to a court filing cited by the New York Times. This trial adds to existing investor concerns about Meta's heavy spending on AI infrastructure, which contributed to a $2.4 billion legal bill in its latest quarter and an unusual decline in profit. Meta shares have fallen about 16% this year, reflecting worries about the scale of AI investment and its impact on cash flow.
Oil climbs on Hormuz tensions
Oil prices rose for a third consecutive session as Iran reiterated that the Strait of Hormuz would remain closed until the US meets conditions of an interim agreement signed in June. Brent crude futures edged up 0.13% to $90.99 a barrel, while West Texas Intermediate gained 0.59% to $85.00, both reaching three-week highs earlier in the session.
President Donald Trump said talks with Tehran were neither taking place nor scheduled, although he maintained that the waterway was open. Analysts noted that the physical situation has not materially changed, with some oil still moving through Hormuz and Saudi Aramco resuming some loadings via ship-to-ship transfers off Fujairah. Tracy Shuchart, senior economist at NinjaTrader, described the latest developments as “headline fatigue,” while Mohit Kumar at Jefferies suggested that neither side is ready for a deal, keeping near-term pressure on prices.
Gold slips as yields climb
Gold prices declined as rising Treasury yields and higher energy prices renewed inflation concerns. Spot gold fell 1.6% to $4,343.77 an ounce, while US gold futures settled 1.65% lower at $4,399.80. Peter Grant, vice president and senior metals strategist at Zaner Metals, said the steepening yield curve is a headwind for gold, but he remains bullish on the metal and expects further upside after consolidation.
Investors are now awaiting the Federal Reserve's latest meeting minutes for clues on interest-rate policy, as higher borrowing costs tend to weigh on non-interest-bearing bullion.
Bitcoin holds above $64K
Bitcoin climbed to $65,000 on Tuesday, diverging from pressure on some traditional risk assets, and was trading at $64,609 at the time of writing. The move came as the S&P 500 rebounded from recent lows, while the US 30-year Treasury yield reached 5.34%, its highest level since January 2007.
Analyst Aksel Kibar noted that bitcoin is approaching a key test around $62,300 based on a potential reverse head-and-shoulders pattern, with a downside target of $53,000 if the structure fails and an upside target of $76,000 if the rebound holds. Resistance is also seen near $65,827, the current level of its 50-month exponential moving average.
For more on related market moves, see our coverage of Meta's trial risks and yield pressures on equities.
This article is for informational purposes only and does not constitute financial advice.
