Evening digest: Visa cuts 7% jobs, Meta-BlackRock join hands for AI data center

On Tuesday, Visa announced plans to cut about 7% of its global workforce while Meta Platforms unveiled a $14 billion AI data center partnership with BlackRock.

Meanwhile, oil prices extended their recent decline on hopes of easing Middle East tensions, while gold slipped to a one-week low as investors awaited the Federal Reserve's policy decision.

Visa to cut 7% of workforce as AI reshapes operations

Visa plans to eliminate about 7% of its workforce, or roughly 2,600 positions, as CEO Ryan McInerney restructures the payments giant to streamline operations and invest more heavily in growth areas.

Most of the job cuts will affect employees in technology and product operations, with impacted workers beginning to receive notifications on Tuesday.

In a memo confirmed by CNBC, McInerney said the company must continue evolving its operations as artificial intelligence changes how work is performed.

The layoffs come as financial and technology companies increasingly deploy AI to automate software development and other technical functions while seeking to control costs following years of rapid hiring.

Visa said AI was one factor behind the restructuring, but not the only one. The company also plans to redirect investment toward affluent customers, cross-border payments, business payments, stablecoins and geographic expansion.

Visa employed about 34,100 people at the end of its last fiscal year and is scheduled to report quarterly earnings after Tuesday's market close.

Meta, BlackRock partner on $14 billion AI data center

Meta Platforms and BlackRock announced a partnership to develop and operate a $14 billion data center campus in El Paso, Texas, highlighting the growing use of outside capital to finance artificial intelligence infrastructure.

Funds managed by BlackRock will own an 80% stake in the venture, while Meta will retain the remaining 20%. Part of BlackRock's investment will be financed with $12.5 billion in debt.

Meta will contribute approximately $2.3 billion worth of land and construction assets already under development, while BlackRock will provide about $4.9 billion in cash.

The El Paso campus, one of Meta's 28 operating or planned US data centers, is designed to deliver 1 gigawatt of compute capacity and is expected to begin operations in 2028.

The agreement forms part of Meta's broader AI strategy, which includes plans to invest $600 billion in data centers by 2028.

The company is also developing a separate Louisiana facility that could eventually reach 5 gigawatts of compute capacity with investments exceeding $50 billion.

Investors continue to monitor the cost of Meta's AI expansion as the company prepares to report second-quarter earnings.

Oil falls to two-week low on Middle East diplomacy

Oil prices dropped about 5% on Tuesday, extending recent losses as investors assessed diplomatic efforts aimed at reducing tensions in the Middle East.

Brent crude fell $4.64, or 5.25%, to $83.72 a barrel, while West Texas Intermediate crude declined $3.65, or 4.42%, to $78.95.

Both benchmarks were on track for their lowest closes since July 13 after falling roughly 17% over the previous three sessions.

Market sentiment improved after reports that Oman presented Iran with a Gulf-backed proposal to manage shipping through the Strait of Hormuz. Iran has not yet responded to the proposal.

President Donald Trump also said the United States was holding "good talks" with Iran while warning military action could resume if negotiations fail.

Elsewhere, Saudi Aramco shut its 400,000-barrel-per-day Jizan refinery following attacks by Yemen's Houthi militants, while disruptions continued around the Bab el-Mandeb shipping route.

Markets are also awaiting weekly US crude inventory data, with analysts expecting a drawdown of about 1.4 million barrels.

Gold slips ahead of Federal Reserve decision

Gold prices fell to their lowest level in one week as a stronger US dollar and expectations for tighter monetary policy weighed on investor sentiment.

Spot gold declined 1.2% to $4,026.49 per ounce after touching its lowest level since July 21, while U.S. gold futures settled 0.9% lower at $4,026.7.

The dollar remained near a one-month high, making dollar-denominated bullion more expensive for overseas buyers.

Markets are focused on Wednesday's Federal Reserve policy announcement and comments from Chair Kevin Warsh.

According to CME FedWatch data, traders see a 71% probability that the Fed will leave interest rates unchanged this week, while pricing in a 75% chance of a rate hike at the September meeting.

Investors will also monitor Thursday's Personal Consumption Expenditures inflation report for further signals on the outlook for US monetary policy.

Commerzbank lowered its year-end gold price forecast by $300 to $4,500 per ounce, citing higher interest-rate expectations and weaker investor demand for gold ETFs.