Market Snapshot

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📉 Banana Bits

• Hot Inflation Data Raises Pressure on Fed Chair Warsh as markets brace for a rate hike.

• Trump Says Chinese Automakers Could Build Cars in the U.S. if they use American workers.

• Kalshi Seeks Approval for Single-Stock Perpetual Futures as the prediction-market platform expands beyond event contracts.

• U.S. Consumer Sentiment Falls as higher gas prices and trade tensions weigh on households.

• Sticky Producer Prices Keep BOJ Hikes in Play ahead of another major central-bank week.

Market News

Friday Relief, Monday Pressure

U.S. stocks rebounded Friday, snapping a four-day losing streak as falling oil prices gave Wall Street some relief from the inflation fears that had weighed on markets all week.

The S&P 500 gained 0.9% to 7,656.98, the Dow rose 1% to 52,573.29, and the Nasdaq Composite added 1% to 26,333.04. Still, the bounce wasn’t enough to erase the week’s damage: the S&P finished down 0.8%, the Dow lost 1.6%, and the Nasdaq slipped 0.7%.

Oil did much of the heavy lifting. Brent crude settled 2.8% lower at $104.61 a barrel, while WTI fell 2.4% to $100.05 after both benchmarks surged earlier in the week. Even after Friday’s drop, crude remained sharply higher on the week as disruptions around the Strait of Hormuz continued to threaten global supply.

Inflation, meanwhile, stayed stubborn. August CPI rose 0.4% from July and 3.4% from a year earlier, while core inflation increased 0.3% on the month, slightly above expectations. Markets are now pricing roughly an 86% chance that the Fed raises rates by 25 basis points on Wednesday. The 10-year Treasury yield is hovering around 4.97%, keeping borrowing costs near multi-year highs.

But Friday’s oil relief may already be facing a fresh test.

Over the weekend, Saudi Arabia’s East-West pipeline was temporarily shut after drone attacks damaged the critical route. The pipeline has been carrying roughly 4 million to 5 million barrels per day toward the Red Sea, allowing Saudi exports to bypass disruptions in the Strait of Hormuz. A prolonged outage could threaten supply equal to roughly 4%–5% of global oil supply, while another vessel was struck in Hormuz, adding to concerns heading into the new week.

And those risks are already showing up in Monday’s markets. Brent crude has jumped nearly 3% back above $107 a barrel, while S&P 500 futures are down roughly 0.5% and Nasdaq futures about 1.3%. Tech is taking the heavier hit after weekend calls from leading AI executives to slow development of the most advanced models triggered declines across Asian and European semiconductor stocks.

Peel Take: Friday showed that investors were willing to buy the dip when oil moved lower, but Monday’s premarket setup is testing that conviction. Crude is back above $107, Treasury yields remain near 5%, tech futures are under pressure from fresh AI concerns, and a Fed hike is heavily priced for Wednesday. Before the opening bell, Wall Street is already facing several of the market’s biggest pressure points at once.

What's Ripe

Hewlett Packard Enterprise (HPE) 12.44% 

• HPE surged 12.4% to $62.09 as Oracle’s latest results reinforced expectations for continued heavy spending on AI infrastructure. Oracle reiterated plans for roughly $90–95 billion of capital expenditures, with Dell and HPE among the hardware suppliers expected to benefit from the data-center buildout.

• Peel Take: Oracle’s spending plans gave investors another reminder that the AI infrastructure boom is still feeding directly into hardware suppliers. HPE doesn’t need to build the models itself to benefit; as hyperscalers keep pouring money into servers, networking, and data centers, companies supplying the physical infrastructure continue to capture the spending.

The Kroger Co. (KR) 2.70% 

• Kroger gained 2.7% despite cutting its full-year identical-sales growth forecast to 0.2%–0.8% from 1%–2%. The grocer cited softer consumer spending, weaker pharmacy revenue tied to Medicare drug-price changes, and lingering effects from a cyclospora outbreak that weighed on produce sales. Kroger still maintained its full-year profit outlook after adjusted EPS of $1.09 beat expectations.

• Peel Take: Kroger’s guidance cut reflects a mix of softer consumer demand and company-specific headwinds rather than a sharp deterioration in the business. The stock’s gain suggests investors were more focused on the earnings beat and maintained profit outlook than the weaker sales forecast.

What's Rotten

Copart Inc. (CPRT) 2.60%

• Copart fell 2.6% after the online vehicle auction company missed fourth-quarter earnings expectations and agreed to acquire rival ACV Auctions for roughly $1.9 billion in an all-cash deal. The acquisition would expand Copart into the dealer-to-dealer wholesale vehicle market.

• Peel Take: Copart gave investors an earnings miss and a major acquisition to digest at the same time. Buying ACV could broaden its position in online vehicle auctions, but the deal adds integration and execution risk just as quarterly results disappointed. Wall Street now wants proof the expansion can translate into stronger growth.

Oracle Corp. (ORCL) 1.74%

• Oracle fell 1.7%, reversing an early post-earnings rally despite first-quarter revenue and earnings beating Wall Street expectations. Cloud infrastructure revenue surged 121%, but investors remained focused on the enormous cost of Oracle’s AI buildout, including $28.5 billion of quarterly capital spending and continued negative free cash flow.

• Peel Take: Oracle is showing that AI demand extends beyond OpenAI, which helps ease customer-concentration concerns. The harder question is economics. With tens of billions going into data centers, Wall Street increasingly wants proof that explosive cloud growth can translate into sustainable cash flow and attractive returns.

🧠 Technical Trip

Interview Q&A from Jane Street

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🦈 Deal Dispatch

M&A, IPOs, And Other Notable Transactions

• Nvidia Is in Talks to Invest Up to $10 Billion as an anchor investor in Anthropic’s planned IPO.

• Intel-Backed Altera Prepares for an IPO that could raise more than $2 billion.

• Macquarie-Led Consortium Agrees to Acquire a Majority Stake in infrastructure-services firm SI Solutions.

• GE HealthCare is in talks to acquire Sofie Biosciences for roughly $1 billion.

Student Success Corner

Banana Brain Teaser

Previous

A company’s enterprise value is $900 million, cash is $100 million, and debt is $250 million. What is the equity value?

Answer: $750 million

Today

A company has $300 million of revenue and an EBITDA margin of 20%. If depreciation and amortization are $15 million, what is the company’s EBIT?

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

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