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MORNING SQUAWK

1. Stock futures look soft

U.S. equities markets were set for a weak open Thursday following Wednesday’s broad rally. Investors are chewing on the latest round of earnings, which included Facebook parent Meta on Wednesday afternoon and NBCUniversal parent Comcast on Thursday morning. The Federal Reserve on Wednesday decided to hike rates by three-quarters of a point, in line with expectations, to battle a four-decade-high surge in inflation. Fed Chair Jerome Powell also indicated that the central bank could slow the pace of its rate hikes.

2. GDP and recession vibes

Markets will be locked in to the GDP report at 8:30 a.m. ET. Most economists expect the print to show slight growth for the U.S. economy, although a slight contraction is also possible. If there is a decline, that would mark the second straight negative quarter for GDP. That doesn’t necessarily mean we’re in a recession. Powell, the Fed chair, said Wednesday that he doesn’t think the economy is in a recession, saying too many parts of the economy are still performing well. “It doesn’t make sense that the economy would be in a recession with this kind of thing happening,” he said.

3. JetBlue gets its way

It didn’t take long for things to fall into place for JetBlue after Spirit scuttled its deal with fellow low-cost airline Frontier. On Thursday morning, Spirit and JetBlue said they reached a deal. If the acquisition is finalized, the combination of JetBlue and Spirit would create the fifth-largest carrier in the United States. But the agreement faces significant regulatory hurdles, as the Biden administration pushes a hard line on mergers and acquisitions. CNBC’s airlines reporter Leslie Josephs breaks it down here.

4. Reality bites Meta

Facebook parent Meta reported earnings after the bell Wednesday, and they weren’t pretty. Financial results missed expectations pretty much across the board. Its metaverse and virtual reality unit suffered a fat $2.8 billion loss in the second quarter, and it’s expected to post even lower revenue in the third. The bigger immediate concern, though, is advertising revenue. And just like social media rivals Snap and Twitter, Meta, which also owns Instagram, said a slowdown in the economy is weighing on the ad business. “It’s always hard to predict how deep or how long these cycles will be, but I’d say that the situation seems worse than it did a quarter ago,” CEO Mark Zuckerberg told analysts in a call.

5. Manchin and Schumer actually reach a deal

Washington is notoriously slow to get things done, especially when Congress is involved. But sometimes there are surprises, too, like the out-of-nowhere deal Wednesday evening between Senate Majority Leader Chuck Schumer, D-N.Y., and conservative West Virginia Democratic Sen. Joe Manchin. Just weeks ago, Manchin had balked at a reconciliation package due to his concerns over inflation. The new measure, which is designed to pass the Senate with a simple majority, includes provisions for health care and climate change, as well as deficit reduction (including a minimum corporate tax). CNBC’s Emma Newburger explains the climate provisions in the bill here.

– CNBC’s Samantha Subin, Carmen Reinicke, Patti Domm, Leslie Josephs, Emma Newburger, Jonathan Vanian, Kevin Breuninger and Jordan Novet contributed to this report.

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