⚾️ Axios PM: (Don't) play ball!

🏳️‍🌈 Welcome to June — Pride Month! Today's newsletter, edited by Alex Fitzpatrick, is 592 words, a 2-min. read. Thanks to Sheryl Miller for copy editing.

🚨 BREAKING: The Trump administration plans to drop its controversial $1.8 billion "weaponization" fund that President Trump sought to compensate alleged victims of prosecutorial conduct under his predecessor, Axios' Marc Caputo scoops.

• "It's dead for now," a senior administration official told him.

Major League Baseball may be heading toward a lockout next year, with owners and players far apart on their next contract, Dan Primack reports.

🧢 Team owners want a hard salary cap and floor.

• Unlike other pro sports, MLB has neither. That's why the L.A. Dodgers can spend around $400 million on their roster, while six other teams are each spending under $100 million.
• The players union will likely reject any caps — why limit your own potential pay?

🏟️ Salary cap fans say they make leagues more competitive by forcing teams to make tough roster decisions, spreading the talent around.

• But MLB owners are also worried about "stagnating franchise values" compared to other top leagues, ESPN's Jeff Passan writes: "Fixed costs make a business more attractive for prospective buyers."

📈 Reality check: Baseball valuations are going gangbusters lately, even without any caps.

• The San Diego Padres just sold for a record $3.9 billion, for example.

Instead, it feels more like owners trying to rationalize their spending.

• Yes, the NFL and NBA both have salary caps and soaring valuations — but their caps are squishy. Costs may be contained, but certainly not fixed.

📈 The bottom line: A salary floor could actually help raise team values, by boosting competition.

• But that's apparently a secondary concern for many owners.

Go deeper ... Get Axios Pro Rata.

The S&P 500 ripped to new records in May, rising 5.2%, Matt Phillips reports.

• Falling oil prices, easing interest rates and strong earnings results set off a blistering AI rally.

🤖 Tech led the way with a 16% increase, thanks to stocks like Hewlett-Packard Enterprise (+50%), Sandisk (+55%), Cisco (+32%) and Micron (+88%).

• Semiconductor shares — as measured by the Philadelphia Semiconductor Index — posted a second consecutive month of astronomical gains (charted above).

🧐 Reality check: There are plenty of reasons to wonder whether the market's AI-fueled enthusiasm is getting out of hand, from rising margin debt to elevated valuations.

• Go deeper ... Get Axios Business Suite.

1. 🎾 Tennis superstar Serena Williams is returning to the pro game after nearly four years off the court. The 44-year-old, 23-time Grand Slam singles champ will play at an upcoming tournament in London, the WTA Tour announced today. Go deeper.
2. 🪖 President Trump said today that Israel and Hezbollah have agreed to curb fighting that's been complicating efforts to make a peace deal with Iran. More from Barak Ravid.
3. 🤖 Anthropic has filed confidential initial public offering papers with the SEC, opening the door to a triple crown of $1 trillion IPOs. Go deeper ... Anthropic's announcement.
4. ⛑️ Rescue workers in Laos are looking for a new way into a flooded cave where two people have been trapped for nearly two weeks. Get the latest.

Photo booths are having their Kodak moment, Axios Houston's Shafaq Patel reports.

• 🎞️ Two new photo booth concepts are hot in Houston: the city's only analog film photo booth at photography space Flats, and another at Roma, a pop-up.

Flats founder Jessi Bowman tells Axios: "People want a sense of the tangible. There's this growing desire to get offline — letter writing, tangible things — and that's a huge reason for the renewed interest."

• Say cheese!

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