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Market Snapshot

📉 Banana Bits

• U.S. private payroll growth slows sharply as ADP reports the weakest hiring pace since March.

• Fed Chair Kevin Warsh offers no signals of a July rate move while reiterating that inflation remains too high.

• U.S. manufacturing expands for a sixth straight month despite a slight slowdown in activity.

• Oil prices fall to a four-month low as easing geopolitical concerns weigh on crude.

• The Magnificent Seven lose trillions in market value as investors rotate toward AI infrastructure companies.

Market News

New Quarter, Who Dis?

Wall Street walked into Q3 still wearing its Q2 medal. The S&P 500 just wrapped a +14.9% quarter, its best since the 2020 rebound, and sits up 9.6% for the year, while the Dow carried back-to-back record closes into Wednesday.

Day one of the new quarter? The Dow tagged a fresh intraday record at 52,748, then spent the afternoon giving it all back, closing basically flat at 52,305. The S&P slipped 0.22% to 7,483, and the Nasdaq dropped 0.66% to 26,040 as traders took profits in semiconductors, a group that ripped more than 80% in the first half and apparently earned itself a vacation.

Under the hood, though, this wasn’t a risk-off day. Roughly two-thirds of U.S. issues advanced, with communications and financials doing the heavy lifting while chips and AI-infrastructure darlings got trimmed.

That’s the sequel of June’s big theme: the Mag7 bled ~$2.3 trillion in market value last month while the market crowned new AI royalty in memory and suppliers. The index is fine; the leadership keeps changing outfits.

The macro data gave everyone something to chew on as well. ADP said private employers added just 98k jobs in June, below the ~118k expected and the softest since March. Nearly half of those gains came from education and health services, leisure & hospitality stayed in hibernation for a sixth month, and pay growth held at 4.4% for job stayers. Translation: Hiring is cooling, but politely.

Meanwhile, the ISM Manufacturing index printed 53.3, down 0.7 points from May but a sixth straight month of expansion, with new orders humming at 56. That pace historically maps to ~2% GDP growth. So the economy's engine is running fine; it's the hiring department that's taking longer lunches.

Enter Kevin Warsh, live from Sintra, Portugal, where the Fed Chair declined to hint at the July decision but reminded everyone the Fed "will not be comfortable" with inflation above 2% because, quote, "prices are too high." Hawkish vibes, zero specifics.

Oil didn't help the inflation-watch drama, falling 1.1% to $68.77 as Iran skipped out on talks… and gold hovering above $4,000/oz suggests somebody out there is still buying insurance.

All of it is an appetizer, though. The June jobs report hits at 8:30 am ET today, moved up because markets are closed Friday for the 4th, with consensus around 100-115k jobs and unemployment steady at 4.3%, versus May’s 172k barnburner. White House adviser Kevin Hassett already teased “another strong number,” which is either a spoiler or a jinx.

Peel Take: A day where Meta rips double digits while semis get dumped isn't a bull market dying, it's a bull market changing clothes. The real tell comes this morning: the market wants a Goldilocks print, soft enough to keep July cut hopes breathing after that ADP wheeze, but strong enough that "best quarter since 2020" doesn't age like milk. Careful trading the first headline on a holiday-brained tape, half the desk is already at the beach house.

What's Ripe

Progress Software (PRGS) 16.6%

• The enterprise software vet posted a Q2 beat-and-raise: EPS of $1.62 vs. $1.49 expected on revenue of $253.5M (vs. $242.7M est.), with net income up 24% YoY.

• Management hiked full-year guidance to $990M–$1.02B in revenue and $6.09–$6.21 in EPS, crediting demand for its AI-powered offerings. The move is even spicier considering enterprise software has been 2026’s designated punching bag.

• Peel Take: In a year where “SaaS” became a slur, a 45-year-old Massachusetts software company dropping an 18% one-day gain is the market’s version of your uncle winning the family 40-yard dash. The lesson: the AI trade isn’t just Nvidia and friends; it’s anyone who can say “AI-powered” on an earnings call and back it with an actual raised guide. Rare, apparently.

Meta Platforms (META) 8.8%

• Shares exploded after Bloomberg reported Meta is spinning up a cloud business, internally dubbed “Meta Compute”, to sell its excess AI computing capacity, putting it on a collision course with AWS, Azure, and Google Cloud.

• The plan could include renting out raw GPU capacity or full AI services, instantly reframing Zuck’s most-criticized line item (that galactic capex bill) as future revenue instead of a money bonfire.

• Peel Take: Zuck looked at a warehouse full of idle GPUs and did what every 24-year-old with a spare bedroom does: listed it. The genius here isn’t the cloud business itself; it’s that the same capex Wall Street spent June crying about just became an asset. Turns out the metaverse guy learned the oldest trick in real estate: if you build it, sublet it.

What's Rotten

CoreWeave (CRWV) 13.9%

• The neocloud poster child cratered to $86.62 intraday, its lowest since early April and roughly 38% below May’s high after Meta’s cloud announcement turned its whale customer into a potential competitor.

• CoreWeave holds a ~$21B agreement with Meta, so the market did quick math on what happens when your biggest tenant starts building apartments across the street. The pain was sector-wide, with other neocloud companies sliding into bear-market territory.

• Peel Take: The neocloud business model was beautiful while it lasted: borrow billions, buy GPUs, rent them to hyperscalers who can't build fast enough. But "can't build fast enough" was doing a LOT of load-bearing work in that sentence. If Meta now has excess compute to sell, the GPU shortage narrative has a crack in it, and customer concentration risk has gone from a footnote in the 10-K to the whole thesis overnight.

Caterpillar (CAT) 6.9%

• The bulldozer-turned-AI-power-play fell as much as 7.5% intraday, single-handedly dragging the Dow off its fresh record high before closing down 6.9%.

• Profit-taking hit hard after a monster first half that saw CAT blow past $1,000/share on data-center power demand (see the Microsoft–Chevron power deal), prompting valuation questions and some high-profile bearish bets.

• Peel Take: When a 101-year-old tractor company becomes an "AI beneficiary" trading north of $1,000 a share, you've found the cycle's funniest trade, and possibly its most crowded. Nothing broke here; the stock just got repriced by people remembering that CAT still sells actual machines with actual tariff bills, not tokens. The AI-adjacent halo giveth, and the AI-adjacent halo taketh 7% intraday.

🧠 Technical Trip

Interview Q&A from JPMorgan

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📚 Lesson from the Library

🎥 Corporate Restructuring Program: Fixing Businesses Under Pressure

Understand how firms restructure debt, stabilize operations, and recover value under stress.

🎓 Check out the Corporate Restructuring Program

🌟 WSO Academy Q2 Update

🚀 Platform Improvements

We've also rolled out several updates behind the scenes to make mentor matching faster, more personalized, and give you more control over your Academy experience.

👥 Smarter Mentor Matching

We've improved how mentor matching works by taking mentor status into account (e.g., current analyst, associate, VP, etc.). When a student submits a mentor request, our system will now prioritize mentors whose background best aligns with what they're looking for.

🔄 More Control Over Your Mentor Requests

Students now have two new options when submitting mentor requests:

• Only match with mentors you haven't worked with before – Perfect if you'd like to get fresh perspectives from different professionals.

• Allow matching with top-rated mentors outside your target region – If you're open to expanding beyond your preferred geography, this option gives our system access to a larger pool of highly rated mentors.

🌎 Language Matching (Coming Soon)

We're adding language preferences to mentor profiles so students can request sessions in languages other than English. As more mentors update their profiles, we'll enable language matching in the mentor request form to prioritize mentors who speak your preferred language.

⭐ More Feedback, Better Matches

Your feedback continues to improve the Academy. After mentor sessions, students will now have the option to indicate if they'd prefer not to be matched with a particular mentor again. This helps us make future matches even stronger while ensuring you continue working with mentors who best fit your goals and learning style.

Learn about WSO Academy

🦈 Deal Dispatch

M&A, IPOs, And Other Notable Transactions

• Bending Spoons prices its Nasdaq IPO above range and delivers a strong market debut.

• Lime begins trading on Nasdaq after a successful IPO.

• Qualcomm agrees to acquire Modular to strengthen its AI software capabilities.

• Verizon and BT combine their international enterprise businesses in a joint venture.

• Bridgepoint expands into U.S. real estate with the acquisition of Kayne Anderson Real Estate.

📊The Daily Poll

Previous Poll:

Chip stocks added trillions in value this quarter. Which tech trend are you most excited about?

AI: 21.8% // Robotics: 28.2% // Self-driving cars: 12.5% // Quantum computing: 37.5%

Student Success Corner

👉 Are you next? Find out with WSO Academy

Banana Brain Teaser

Previous

In order to complete a reading assignment on time, Terry planned to read 90 pages per day. However, she read only 75 pages per day at first, leaving 690 pages to be read during the last 6 days before the assignment was to be completed. How many days in all did Terry have to complete the assignment on time?

Answer: 16

Today

Club X has more than 10 but fewer than 40 members. Sometimes the members sit at tables with 3 members at one table and 4 members at each of the other tables, and sometimes they sit at tables with 3 members at one table and 5 members at each of the other tables. If they sit at tables with 6 members at each table except one and fewer than 6 members at that one table, how many members will be at the table that has fewer than 6 members?

How Would You Rate Today's Peel?

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

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