Market Snapshot

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📉 Banana Bits

• Inflation kept chilling as July CPI rose just 0.1% on the month, cooling to 3.4% annually from June’s 3.5%

• Traders spent Tuesday split 50/50 on a September hike; after the print, bets tilted toward the Fed holding steady

• U.S.-Iran peace talks showed no progress as efforts to revive the interim deal stalled.

• Nebius went full hyperscale as the AI-cloud provider jumped 34% after revenue hit $582.3 million

• Wall Street stopped one banana peel short of a record as the S&P 500 gained 0.3% but finished just below the all-time high it set Friday

Market News

Cool CPI, Hot Servers

Wall Street received its favorite economic combo Wednesday. Inflation that was not hot enough to force the Federal Reserve’s hand and AI earnings strong enough to keep the growth trade alive. The S&P 500 rose 0.26%, the Nasdaq gained 0.54%, the Dow slipped 0.04%, and the small-cap Russell 2000 advanced 0.6%. The S&P finished just below Friday’s record, meaning the market did not exactly rip… it simply delivered a mature, fiscally responsible little fist bump.

The celebration started with July’s Consumer Price Index. Headline CPI increased 0.1% from June and 3.4% from a year ago, down from June’s 3.5% annual pace. Core CPI, which removes the food and energy categories most likely to behave like toddlers, rose 0.2% monthly and 2.5% annually. The figures largely matched expectations, which was exactly what markets wanted: no upside inflation surprise.

That calmer print weakened the case for another rate hike. By the close, futures markets were assigning a 62% probability that the Fed would leave rates unchanged at its September meeting, versus roughly coin-flip odds before the report. The 10-year Treasury yield eased to 4.68% from 4.70%. Not exactly “Mission Accomplished”, inflation remains sticky, but the bond market finally unclenched one shoulder. 

Then came the AI-infrastructure crew, carrying something more persuasive than a slide deck: actual numbers. CoreWeave gained 19% after beating revenue expectations and raising its spending outlook, meanwhile Super Micro Computer also jumped 19% after delivering earnings per share 84% above analysts’ expectations and issuing stronger-than-forecast guidance. Nvidia rose 3%, Micron gained 4.9%, and the PHLX Semiconductor Index advanced around 2.5%. The market still very much enjoys AI. 

The rally also had more breadth than the usual mega-cap group project. Eight of the S&P 500’s 11 sectors finished higher, while advancing stocks outnumbered decliners by roughly 1.7 to one. Nebius soared 34%, IREN gained nearly 10%, and Applied Digital rose 4.9% as investors pushed further into the data-center supply chain. The message was clear: companies providing the GPU, servers, power and cloud capacity currently have Wall Street’s full attention, and most of its allowance. 

Housing was the glaring exception. Long-term mortgage rates are sitting at their highest level in a year, and a slightly friendlier CPI report does not instantly make a starter home affordable again. Meanwhile, Brent crude closed at $88.98 as talks involving Iran showed no progress and attacks on shipping continued. A renewed oil spike could reignite inflation, reverse Wednesday’s bond relief and turn the Fed conversation hawkish again.

Peel Take: Wednesday’s rally had something Wall Street’s AI parties do not always bring: adult supervision. Cooler inflation eased pressure on the Fed, while strong infrastructure earnings showed the AI trade is still producing more than vibes and press releases. But with long-term rates elevated, oil prices lurking, and valuations already dressed for perfection, this remains a market that rewards selectivity over blind enthusiasm. The picks-and-shovels trade still works, just don’t pay next decade’s price for next quarter’s profits.

What's Ripe

Nebius Group (NBIS) 34.14% 

• Second-quarter revenue exploded 454% year over year to $582.3 million, while adjusted EBITDA swung to $236.2 million from a $21 million loss. The AI-cloud money printer has officially located the “on” switch.

• Nebius signed four AI-cloud contracts averaging more than $1 billion each, while total contract value nearly quadrupled. Customers are now ordering compute capacity by the Brinks truck. 

• Peel Take: Wall Street still loves AI when it arrives with revenue, positive EBITDA, and billion-dollar contracts instead of another glossy presentation. Nebius delivered all three, which explains the face-melting rally. Great quarter, but chasing a 34% candle is cardio, not investing. 

Quantinuum (QNT) 27.97% 

• Second-quarter revenue increased 279% to $8 million, although adjusted EBITDA loss widened to $68 million. Quantinuum ended June with approximately $2.1 billion in cash and short-term investments.

• Management issued its first formal public-company outlook, forecasting $28 million to $32 million of 2026 revenue, ahead of Wall Street’s previous expectations.

• Peel Take: Quantum computing finally brought numbers to the party, not just Schrödinger memes and promises about 2040. The partnerships, technical progress, and giant cash cushion make Quantinuum one of the sector’s more credible players. But an $18 billion-plus valuation against roughly $30 million in projected annual revenue requires a heroic amount of belief.

What's Rotten

Bending Spoons (BSP) 8.35%

• Bank of America downgraded Bending Spoons to Underperform, arguing that the stock’s valuation and acquisition-fueled expectations had gotten ahead of themselves.

• Even after Wednesday’s drop, shares remained nearly 75% above their $29 IPO price and traded around 43 times estimated 2026 earnings. That spoon was priced like silverware from the Met Gala.

• Peel Take: Wall Street loved the spoon until Bank of America checked the price tag. A 75% post-IPO rally left almost no room for skepticism, especially with the company’s first public earnings report waiting around the corner. The business may still deliver, but premium valuations tend to react badly when expectations get even slightly bent. 

Texas Pacific Land (TPL) 6.08%

• TPL fell 6.1% on Wednesday as investors continued to digest its mixed second-quarter results, which included strong year-over-year growth but a modest revenue miss. Revenue rose 31.2% to $246.1 million, while adjusted EBITDA and margins remained strong.

• Even after the decline, TPL still trades at a premium valuation, leaving less room for disappointment when results come in slightly below expectations.

• Peel Take: TPL remains an elite business with huge margins, valuable land, and economics most companies would love to own. The catch is the valuation. When investors are already paying a premium, even a small revenue miss can get more attention than an otherwise strong quarter. Nothing looks broken here, but expensive stocks tend to get graded on a tougher curve.

🧠 Technical Trip

Interview Q&A from Morgan Stanley

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🦈 Deal Dispatch

M&A, IPOs, And Other Notable Transactions

• Goldman Sachs is acquiring ETF provider Neos Investments for up to $2.25 billion.

• Bank of America will invest as much as $1.92 billion for up to 49.9% of India’s Jio Credit.

• Clean Harbors agreed to acquire EnviroServe for $470 million in cash.

• AEVEX agrees to acquire BlackSea Technologies for up to $650 million, expanding its autonomous maritime defense capabilities.

• Archer Aviation is acquiring Boeing’s Wisk Aero, Insitu and SkyGrid businesses.

Student Success Corner

Banana Brain Teaser

Previous

A portfolio is worth $200,000. It falls 15% in one month. By what percentage must it rise from its new value to get back to $200,000?

Answer: 17.65%

Today

A company has $120 million of EBITDA and trades at 8.0x EV/EBITDA. It has $300 million of debt and $60 million of cash. What is the implied equity value?

How Would You Rate Today's Peel?

Happy Investing,
Chris, Elie, Mitchell, Fernanda, Nick, & Patrick

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