Elon Musk’s fight with Brazil is intensifying

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Conway Gittens: I’m Conway Gittens, reporting from the New York Stock Exchange. Here’s what we’re watching today on TheStreet.

A soft inflation report gives Wall Street the green light to move higher. The personal consumption expenditure index for July rose just 0.2%, as expected. Over the past 12 months, the Federal Reserve’s preferred inflation gauge has risen 2.5%. Couple this modest increase in inflation with data showing a resilient consumer and an orderly slowdown in the labor market, and investors believe the stage is set for the Fed to start cutting rates in September.

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In other business headlines: New worries are emerging about Elon Musk’s ability to handle all the battles he faces.

The latest threat comes from Brazil, where X faces a government-ordered shutdown. Musk has been locked in a war of words with South America’s most populous nation. The billionaire refused to hire a coordinator to deal with the mandatory elimination of posts, which the government considered political disinformation ahead of municipal elections.

A shutdown in Brazil would compound X’s revenue woes, with 171 million active social media users ditching the social network, according to local estimates. Musk can hardly afford that, with global revenues in freefall since he took over in 2022.

Meanwhile, the controversy has spread to Starlink, the satellite Internet service powered by Musk’s other company, SpaceX. The Brazilian Supreme Court has frozen Starlink’s domestic bank accounts, jeopardizing service in one of Starlink’s major markets.

And if that’s not enough, elsewhere in the world, Musk is fighting the European Union. Regulators there say X violated its Digital Services Act, designed to put up barriers to misinformation and harmful speech. In that case, Musk could be hit with a fine of up to 6 percent of X’s global sales.

That will do for your daily briefing. From the New York Stock Exchange, this is Conway Gittens with TheStreet.

Related: Elon Musk’s Weird New Rule for X Employees Could Cause Trouble