Oil prices cool, AI’s ‘distillation’ debate, Ford’s ‘Nike shoe drop’ and more in Morning Squawk

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Happy Monday. I saw “The Odyssey” over the weekend, but I wasn’t able to snag a seat in an elusive Imax 70-millimeter screening. More on that below.

Stock futures are jumping this morning after a losing week for all three major indexes.

Here are five key things investors need to know to start the trading day:

Oil prices tumbled this morning as a fragile pause in fighting between the U.S. and Iran appeared to hold. Brent crude futures fell more than 7% to below the $90 per barrel mark, while U.S. West Texas Intermediate crude futures slid 6.5%.

Here’s what to know:

• U.S. ambassador to the United Nations Mike Waltz said yesterday that President Donald Trump paused attacks on Iran to give “talks some space.”
• But Tehran this morning denied reports it had agreed to a 10-day truce and said it currently has “no negotiations with the United States.”
• A Ukrainian strike on an Iranian vessel over the weekend raised fears that the U.S.-Iran and Russia-Ukraine wars could be on a collision course.
• Stock futures are rallying before the bell as oil prices decline.
• Investors have a big week ahead: Meta, Microsoft, Apple and Amazon are all set to report quarterly results this week, and the Federal Reserve will announce its latest interest rate decision Wednesday.
• Follow live market updates here.

Whether it’s in Washington, D.C. or Silicon Valley, tech elite can’t stop talking about “distillation.” The concept — which broadly refers to using answers from one advanced artificial intelligence model to train another — became especially buzzy after Chinese lab Moonshot AI released its Kimi K3 model last week.

As CNBC’s Kif Leswing and Jonathan Vanian report, some government officials are worried distillation could help China catch up to the U.S. in the AI race. White House advisor Michael Kratsios said last week that Moonshot distilled Anthropic’s Fable model to develop Kimi K3, which is one of several open-weight offerings out of China that are cheaper than those of OpenAI or Anthropic.

In a letter published Friday, major technology companies said distillation is “a widely used technique for model improvement, evolution, and validation” and pushed policymakers to avoid “premature restrictions” they said could hinder competition.

Ford wants its own “Nike shoe drop” moment.

As CNBC’s Michael Wayland reports, the legacy automaker is expanding its accessory and parts business, hoping more customization by drivers will boost profits. The Detroit-based company, which reports earnings tomorrow, plans to increase its aftermarket product and systems business and release special-edition models.

Ford Custom Garage’s first “shoe drop” moment happened today when it released a sunrise-inspired Ford Bronco SUV with a $57,350 price tag. Here’s a look at the limited-edition Bronco.

Paramount Skydance on Friday agreed to delay its proposed acquisition of Warner Bros. Discovery amid legal challenges. The deal could now be pushed to as late as June 2027.

Paramount previously said it expected to complete the transaction by the end of September. But the media giant last week said it would either hold off until June 1, 2027 or wait until the court rules on a lawsuit from a group of state attorneys general — whichever comes first.

As CNBC’s Sara Salinas notes, the delay could end up raising the price of the deal. Starting Sept. 30, Paramount will owe WBD a “ticking fee” of 25 cents per share, per quarter until closing. If the deal is delayed to next June, that could add up to roughly $1.7 billion.

“The Odyssey” has an A-list cast and an award-wining director. But the breakout performance might be Imax‘s 70-millimeter screenings.

Just 41 theaters across the world are equipped to project 70 mm film. As a result, consumers are paying a premium, going to screenings in the dead of night and, in some cases, traveling across state lines for the hard-to-find experience. One theater in Indiana reported more than half of audience members in the first days of showings coming from at least 50 miles away.

Imax CEO Richard Gelfond said seats in these auditoriums are “among the hottest tickets in the world.” “Fans are flying across countries, if not continents, to experience ‘The Odyssey’ and Imax 70 millimeter,” he told analysts last week.

Here’s what we’re watching this week:

• Tuesday: UPS, Centene, Coca-Cola, JetBlue and Boeing earnings (before the bell); Ford and SK Hynix earnings (after the bell)
• Wednesday: Procter & Gamble and Humana earnings (before the bell); Meta Platforms, Microsoft, Qualcomm, Arm Holdings, Robinhood, Starbucks, Chipotle Mexican Grill and Carvana earnings (after the bell); Federal Reserve decision
• Thursday: Cigna and Yum Brands earnings (before the bell); Apple, Amazon, Reddit, Roblox, Coinbase and Rivian earnings (after the bell); GDP data for the second quarter; PCE price index for June; consumer spending data for June
• Friday: Chevron and ExxonMobil earnings (before the bell)

— CNBC’s Azhar Sukri, Mike Sheen, Lee Ying Shan, Sarah Min, Sean Conlon, Jordan Novet, Kif Leswing, Michael Wayland and Sara Salinas contributed to this report.

Luke Fountain assisted in the production of this newsletter. Josephine Rozzelle edited this edition.