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Market Snapshot

📉 Banana Bits

• The Fed held rates steady, with Powell firmly staying in place.

• Producer prices came in hotter than expected; inflation isn’t done yet.

• JPMorgan’s Taiwan ETF is entering an already crowded market.

• The BOJ decision has traders watching yen 160 like a countdown clock.

• Strong hiring in Australia is keeping the Reserve Bank of Australia firmly hawkish.

• Foreign demand for U.S. Treasuries is rising, led by Japan.

• Oil is rallying, but U.S. WTI crude is lagging the move.

• Rate-cut hopes are fading as bond markets take cues from the Fed.

Market News

The Fed’s Problem Just Got Worse

Markets had a rough session as oil surged and everything else slipped; stocks, bonds, and investor confidence all took a hit.

The S&P 500 dropped 1.4% (its worst Fed day since 2024), while Treasury yields climbed as traders quickly dialed back expectations for rate cuts this year. Translation: higher-for-longer just got a little more believable.

The main driver was geopolitics. A worsening Iran–Israel conflict has begun to directly impact key energy infrastructure (including the South Pars gas field), sending Brent crude toward $110 and reminding markets that, when it comes to macro, oil still calls the shots.

Any disruption in supply, especially in such a critical region, immediately feeds into inflation expectations and rattles risk assets.

At the same time, Jerome Powell and the Fed didn’t exactly offer comfort. Policymakers held rates steady, but Powell struck a cautious, almost “wait-and-see” tone.

The message was clear: rate cuts are still on the table… just not anytime soon unless inflation cooperates.

While the Fed still projects two cuts further out (2026 and 2027), markets are now pricing in barely one cut this year, and even that feels uncertain. Powell emphasized that the Fed needs clear progress on inflation before easing, and rising energy prices are doing the exact opposite.

This leaves the Fed in a classic, and uncomfortable, position:

• Oil ↑ → inflation pressure rises (bad for rate cuts)

• Oil ↑ → economic growth slows (bad for keeping rates high)

Peel Take: The Fed wants to cut, the market wants relief, but oil just raised its hand and said, “Not so fast”; this is less a soft landing and more a mid-air balancing act, with turbulence picking up.

What's Ripe

Swarmer Inc. (SWMR) 77.4%

• SWMR shares absolutely took off, and not just because it’s a drone company. The stock closed up 77% at $55, after an eye-watering 520% surge on its first day of trading on Tuesday.

• Peel Take: When a stock goes full rocket mode on day one, it’s less about fundamentals and more about hype, scarcity, and FOMO doing a group project. The real question isn’t how high it flew, it’s whether it can stay airborne once gravity (aka valuations) kicks back in.

Lumentum Holdings Inc. (LITE) 7.9%

• LITE climbed 7.9% after signaling serious growth ambitions, guiding toward a $1.25B quarterly revenue run rate within the next 9–12 months, nearly doubling from its latest $666.5M print. Meanwhile, peer Coherent tagged along, rising 4.6%.

• Peel Take: This isn’t just a sympathy rally, it’s an AI infrastructure hype meeting real revenue acceleration. When companies start throwing out “near-doubling run rate” guidance, the market hears one thing: AI demand isn’t slowing down anytime soon. The catch? Expectations are now doing just as much heavy lifting as the fundamentals.

What's Rotten

Gemini Space Station Inc. (GEMI) 16.2%

• GEMI tumbling 16% to $5.96 after Citi pulled the plug on optimism, downgrading the newly public cr*pto exchange to Sell and slashing its price target from $13 to $5.50.

• Peel Take: Nothing hurts more than a fresh IPO getting downgraded this early; it signals the hype cycle may have peaked before fundamentals showed up. In crypto, sentiment drives the ride, but when analysts start cutting targets in half, reality tends to follow fast.

Oklo Inc. (OKLO) 6.3%

• OKLO dropped 6.3% after the nuclear startup reported a wider net loss year-over-year, giving back some of the 1.4% gain from the prior session when it announced securing its first Nuclear Regulatory Commission license.

• The stock experienced volatility, falling in after-hours trading after rising on the license news. Despite the losses, the company reported a strong cash position of $1.4 billion, supported by recent capital raises.

• Peel Take: Classic early-stage energy play dilemma; big regulatory wins, but still bleeding cash. The license is a huge milestone, but until revenue catches up, the market’s patience can flip faster than sentiment on earnings day.

🧠 Technical Trip

Interview Q&A from PJT

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📚 Lesson from the Library

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🌟 WSO Academy Q4 Update

🔁 Feeling Stuck After On-Cycle Recruiting?

If students are feeling discouraged because the first wave of on-cycle recruiting has passed, don’t worry, this is extremely common. Many students secure internships through:

• Off-cycle recruiting later in the year

• Boutique investment banks

• Networking opportunities that arise throughout the semester

In other words, missing the first wave of recruiting does not mean you missed your opportunity.

The most important thing now is to continue building momentum by improving your resume, technical preparation, and networking strategy. Students’ mentors and the Academy team are here to help them navigate the next steps.

Apply to WSO Academy

🦈 Deal Dispatch

M&A, IPOs, And Other Notable Transactions

• Relativity is gearing up for a U.S. IPO, lining up bankers.

• The Iran conflict has slowed deals, but M&A activity is still holding up.

• Ferrero is entering protein bars with a new snack acquisition.

• Banks are trying to offload billions in buyout-related debt.

• Disney’s new CEO is pushing for a bigger streaming focus.

• Polymarket acquired Brahma to scale its DeFi ambitions.

📊The Daily Poll

Previous Poll:

Raising rates during an energy shock is

Necessary: 33.3% // Risky: 26.6% // Too aggressive: 15.5% // No choice: 24.6%

Student Success Corner

Banana Brain Teaser

Previous

Each year for 4 years, a farmer increased the number of trees in a certain orchard by 1/4 of the number of trees in the orchard the preceding year. If all of the trees thrived and there were 6,250 trees in the orchard at the end of the 4-year period, how many trees were in the orchard at the beginning of the 4-year period?

Answer: 2,560

Today

60% of the members of a study group are women, and 45% of those women are lawyers. If one member of the study group is to be selected at random, what is the probability that the member selected is a woman lawyer?

How Would You Rate Today's Peel?

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

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