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Market Snapshot

📉 Banana Bits

• Alibaba is pushing into AI-powered game creation.

• Congress is weighing penalties as the AI “copycat” fight with China escalates.

• China’s housing slump is finally showing signs of stabilizing.

• BofA’s commodities revenue jumped 60% on the oil and gold rally.

• U.S.-Iran ceasefire talks are dragging on while Hormuz remains shut.

• Wall Street posted record profits while cutting 5,000 jobs.

• Trump escalated tensions with Powell, again threatening his role.

• Trump said Xi assured him China isn’t supplying arms to Iran.

Market News

Record Highs… What Could Go Wrong?

U.S. equities reached record levels on Wednesday as optimism surrounding a potential Middle East peace deal and a strong start to the corporate earnings season lifted investor confidence.

The S&P 500 rose 0.8%, extending its rally from late-March lows, while the Nasdaq 100 gained 1.4% to a record high. Investor sentiment improved as markets began pricing out the geopolitical risk premium tied to the US-Iran conflict, with reports suggesting that the two sides are considering a two-week extension of a ceasefire to allow more time for negotiations.

The development has helped shift investor focus back toward artificial intelligence investments and resilient corporate earnings. Technology shares led the gains, with Microsoft rising 4.6% and Oracle gaining 4.2%, as investors rotated into software stocks after chipmakers had driven much of the earlier rally.

Financial stocks also advanced, with Bank of America and Morgan Stanley climbing after strong trading revenues from their equity desks.

Despite the equity rally, uncertainty remains as the conflict continues to disrupt roughly 20% of global oil supplies through the Strait of Hormuz, posing inflation risks that could influence central bank policy.

In other markets, Brent crude hovered near $95 per barrel, Treasury yields rose modestly, the dollar weakened, and gold declined toward $4,800 an ounce. Analysts say improving market breadth and corporate earnings growth could support further gains, with some strategists suggesting the S&P 500 could climb above 7,200 if valuations return to pre-war levels.

Corporate developments included Jane Street investing an additional $1 billion in AI cloud provider CoreWeave, and strong earnings from major banks driven by elevated market volatility.

Overall, investors remain cautiously optimistic that easing geopolitical tensions and solid corporate performance could sustain the equity rally through the remainder of the year.

Peel Take: Record highs, strong earnings, and AI hype back in focus, what’s not to like? The part where the oil supply is still at risk, and inflation could creep back in. For now, markets are choosing optimism, even though a few obvious things could still go wrong.

What's Ripe

Robinhood Markets Inc. (HOOD) 10.4%

• HOOD surged 10%, leading gains in the S&P 500 for a second consecutive trading session, after the Securities and Exchange Commission extended retail investors’ ability to use borrowed money to invest. The decision effectively preserves leverage access for individual traders, a move that fueled enthusiasm among retail participants and helped drive the stock’s rally on Wednesday.

• Markets interpreted the SEC’s decision as a signal that regulators are not yet ready to tighten rules around margin trading, which has become increasingly popular among retail investors seeking to amplify returns.

• Peel Take: Retail leverage continues to play an outsized role in market momentum, as shown by the stock’s 10% surge after the SEC allowed retail investors to keep using borrowed money to invest. The decision preserves access to margin trading, which can amplify buying pressure when individual traders pile into popular stocks. While this can fuel sharp rallies, it also increases volatility, meaning retail-driven moves could remain a recurring, and sometimes explosive, feature of today’s markets.

GitLab Inc. (GTLB) 8.4%

• GitLab shares rose 8.4% after the software-development platform announced an expansion of its collaboration with Alphabet’s Google Cloud. Under the agreement, Google Cloud customers will gain access to GitLab’s Duo Agent Platform, which will integrate with Google’s Vertex AI models.

• The partnership strengthens GitLab’s position in the fast-growing market for AI-powered software development tools, as companies increasingly embed artificial intelligence into coding, testing, and deployment workflows.

• Peel Take: The deal highlights how the AI race is rapidly reshaping the software development ecosystem, with cloud providers and developer platforms forming tighter partnerships to capture demand for AI-assisted coding tools. By integrating its Duo Agent Platform with Google’s Vertex AI models, GitLab gains access to Google Cloud’s enterprise customer base while positioning itself at the center of the emerging AI-native developer workflow, a market expected to grow as companies look to automate and accelerate software creation.

What's Rotten

Sandisk Corp (SNDK) 5.6%

• SNDK fell 5.38%, underperforming the Technology Equipment sector, which slipped only 0.12% during the same session. The sharper decline suggests company-specific weakness, as the broader industry experienced only modest losses.

• Peel Take: SanDisk’s sharper drop compared with the broader technology equipment sector suggests investors may be reassessing the company’s near-term outlook or taking profits after prior gains. When a stock significantly underperforms its industry despite relatively stable sector performance, it often signals that market sentiment is shifting toward company-specific risks rather than broader macro or industry pressures.

ASML Holding NV (ASML) 2.2%

• The stock dropped primarily because net bookings (new orders) came in at €3.6 billion, which was significantly lower than the ~€5.4 billion expected by analysts. Total net sales also missed expectations, falling 22% year-over-year.

• The decline suggests investors may have been taking profits following a strong rally, with the firm’s U.S.-listed shares more than doubling over the past 12 months amid strong demand tied to the global AI semiconductor boom.

• Peel Take: The drop highlights a common market dynamic where strong earnings are not always enough to push a stock higher when expectations are already elevated. After a year-long rally fueled by AI-driven semiconductor demand, investors appear to be locking in gains despite the company’s solid results and improved outlook, suggesting that valuation concerns and profit-taking may temporarily outweigh positive fundamentals.

🧠 Technical Trip

Interview Q&A from UBS

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📚 Lesson from the Library

🎥 Valuation Modeling Course: Build Models That Price Reality

Build DCF and comps models that translate assumptions into real-world value.

🎓 Check out the Valuation Modeling Course

🌟 WSO Academy Q4 Update

🎤 WSO Academy Speaker Series

We’ve continued expanding the WSO Academy Speaker Series, giving students the opportunity to hear directly from senior professionals across Investment Banking, Hedge Funds, and Asset & Wealth Management.

All past sessions are available to watch directly on the student’s dashboard.

• Scott L. Bok - Chairman & CEO, Greenhill & Co. (May 2025)

• Michael Harris - Vice Chairman & Global Head of Capital Markets, NYSE (August 2025)

• Zach Levenick - Founder, THG Securities Advisors (September 2025)

• John Morgan - CIO, Morgan Capital Family Office (October 2025)

• James Marciano - Founder & CEO, Tuck Advisors (December 2025)

• Sandeep Varma - Founder & CEO, Equity Data Science (January 2026)

• Jen Berry - Former COO, Bridgewater Associates (February 2026)

• Jeff Gitterman - CEO, Gitterman Wealth Management (March 2026)

Learn about WSO Academy

🦈 Deal Dispatch

M&A, IPOs, And Other Notable Transactions

• Defense supplier Arxis launched a $1.13B IPO.

• Asia’s wealthy investors are pouring $25B into AI opportunities.

• Jane Street invested $1B in CoreWeave to expand AI infrastructure.

• Solaria is eyeing a stake in a €4B Telefónica–ACS data center JV.

• Sigenergy surged 103% in its Hong Kong debut after a $562M IPO.

📊The Daily Poll

Previous Poll:

Do slightly lower home loan rates change your decision to buy?

Yes, I’d consider it: 36.4% // Maybe, but not enough: 15.2% // Still too expensive: 30.3% // Not thinking of buying: 18.1%

Student Success Corner

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Banana Brain Teaser

Previous

If the speed of x meters per second is equivalent to the speed of y kilometers per hour, what is y in terms of x? (1 kilometer = 1,000 meters)

Answer: 3.6x

Today

If the median of a list of numbers is m, the first quartile of the list is the median of the numbers in the list that are less than m. What is the first quartile of the list of numbers 42, 24, 30, 22, 26, 19, 33, and 35?

How Would You Rate Today's Peel?

Happy Investing,
Chris, Vyom, Ankit, Mitchell, Fernanda, Nick, & Patrick

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