Tariff legal troubles, Kraft Heinz splits, another Spirit bankruptcy and more in Morning Squawk

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Here are five things to know before the market opens:

While we were all shifting into long-weekend mode on Friday afternoon, a federal appeals court ruled that most of President Donald Trump’s tariffs were illegal, dealing a serious blow to his broad levy plan.

Here’s what to know:

• The Federal Circuit’s Court of Appeals said that the law Trump invoked when implementing his tariffs, including his so-called “reciprocal” duties, did not actually give him the power to do so.
• It was a 7-4 ruling. The court paused its ruling from taking effect until Oct. 14, giving the Trump administration time to appeal to the Supreme Court.
• Following the ruling, Trump called the appeals court “Highly Partisan” and indicated that he believed the Supreme Court will undo the decision. Treasury Secretary Scott Bessent also said he anticipated the Supreme Court side with the White House.
• CNBC’s Erin Doherty broke down which tariffs are affected by the court’s decision, and which tariffs remain safe from the ruling.
• Treasury yields jumped this morning as investors weighed the likelihood of the U.S. having to give back revenue already generated by Trump’s tariffs.

August was a winning month for the major U.S. stock averages. The benchmark S&P 500 added nearly 2%, notching its fourth straight winning month.

But don’t get too excited: September has typically brought a rough patch. It has historically been the S&P 500’s worst month of the year, with an average decline of 0.7%, according to the Stock Trader’s Almanac.

The market will also face a big test later this week, with the all-important jobs report due in on Friday. Stock futures are lower this morning to kick off the shortened trading week. Follow live market updates here.

Breaking news this morning: Kraft Heinz said it will split into two companies. That undoes much of the $46 billion merger from 2015 that created the food giant as we know it today.

One of the two new companies will focus on shelf-stable meals and house brands such as Heinz, Philadelphia and Kraft mac and cheese. The other will include Oscar Mayer, Lunchables and Kraft singles, in what the company described as a “scaled portfolio of North America staples.” Neither business has an official name yet.

CNBC’s Amelia Lucas has all the details.

Spirit Airlines filed for Chapter 11 bankruptcy protections on Friday. If this feels like déjà vu, that’s because it’s the second such filing in less than a year for the budget air carrier.

The airline hasn’t been able to reach better financial standing since it first came out of Chapter 11 protection in March, CNBC’s Leslie Josephs reports. Spirit said it would pare down its network and fleet, which it said will cut costs by hundreds of millions of dollars each year.

This move isn’t completely out of the blue. A few weeks ago, Spirit warned that it might not be able to survive another year if it didn’t find more cash.

When you think of the stock market’s big artificial intelligence winners, familiar names like Nvidia or Palantir likely come to mind. Now, the good vibes might be spreading to a broader set of stocks as investors see a boon for a wider variety of tech companies.

Just look at last week: MongoDB, Pure Storage and Snowflake all surged after highlighting their own AI-related business updates. Traders will likely keep an eye out to see if the trend continues this week, with tech companies including Salesforce and Broadcom slated to report earnings.

For years, this newsletter has recapped the top five headlines you should know before the market opens. Now, we’re adding a sixth. Whether it’s a chart, video, interview or quote, the Daily Dividend will highlight one more not-to-be-missed story. Think of it as our version of a P.S.

Today, we call your attention to how the price of the Honey Deuce — the iconic U.S. Open cocktail — has risen compared with alcoholic beverage inflation. You might even call it some napkin math.