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Your Daily Dose of Market & Career Clarity

📬 Delivered to 150,000+ ambitious readers

🎯 In this issue:

• Banana Bits: Finance headlines that actually matter

• Market Recap: Investors rotate “bigly” out of mega-cap tech

• Technical Trip: Interview Q&A from Morgan Stanley

• What’s Ripe / Rotten: The tastiest and most disgusting stocks 

• Deal Dispatch: M&A, IPOs, and other transactions 

Market Snapshot

📉 Banana Bits

• Home Depot stock rose despite missing earnings but maintaining their full-year outlook.

• Japan’s Nikkei Index has been quietly crushing it this year, hitting all-time highs.

• Trump expanded 50% steel and aluminum tariffs to include 407 additional product types.

• Flight attendants won their battle against Air Canada, securing a four-year pay deal.

• After hitting a record high, Palantir’s stock cools off for the fifth day in a row.

• Softbank and the U.S government are investing billions into Intel, hoping to keep the company afloat.

• Scott Bessent says U.S tariff revenues are set to “rise substantially.”

Market Recap

Mega-Cap Tech Drives Market Drop

The market flopped today, driven lower by mega-cap tech (Nvidia -3.5%, AMD -5.4%). Palantir also dropped 9%, pulling back from all-time highs, and was the S&P 500’s worst performer on Tuesday. Other tech names like Tesla, Meta, and Netflix were under pressure as well.

The culprit? The AI trade is losing some steam after a crazy bull run. The NASDAQ is up +40% since April, and well… it’s just due for a pause, right? 

Investors seemed to rotate into more defensive sectors, including healthcare, homebuilders, and consumer durable names. An example of this is Home Depot shares rising 3% despite reporting earnings below expectations, but maintaining its full-year outlook.  

We’ll also get earnings from Lowe’s, Walmart, and Target later this week, which will provide more insight into the impact of tariffs. 

Intel got yet another boost after SoftBank announced a $2 billion stake in the chipmaker, believing that the company will ride the wave and play a pivotal role in the growing AI demand complex. 

Apart from that, the market is on edge as investors digest mixed inflation reports last week and position themselves ahead of Friday's Federal Reserve Jackson Hole meeting. The market is currently pricing in an 85% chance of a 0.25% rate cut in September.

While today’s move could just be a pause on the aggressive rally, it is important to note that the market has been dominated by a small group of growth giants, leaving small and mid-caps in the dust. Some forecasters think this sets up small-cap names (Russell 2000) to break out and outperform.

What's Ripe

Intel (INTC) 7.0%  

• Intel’s stock popped another 7% extending gains from last week, after SoftBank got FOMO and announced a $2 billion investment, or a 2% stake.

• This comes right after the U.S. government teased an investment as well, citing the fact that the company is set to benefit from the AI boom.

Prologis (PLD) 5.0%  

• Mizuho upgraded Prologis from Neutral to Outperform and raised its price target to $118 (up from $109), implying about 12% upside potential.

• Mizuho flagged improved macro conditions and a better risk profile for Prologis, even though the broader industrial REIT sector still faces challenges like sluggish rent growth and supply risks.

What's Rotten

Palantir (PLTR) 9.4% 

• Palantir was the worst‑performing stock in the S&P 500 and secured its fifth straight day of declines.

• The fall comes amid investors rotating out of AI hype names more broadly and taking a breather after the stock’s crazy run.

Advanced Micro Devices (AMD) 5.4%  

• AMD slid after hitting a 52-week high last week as investors cashed in gains and braced for signals from the Fed’s Jackson Hole event.

• The drop mirrors a wider slide in mega-cap tech and semiconductor stocks, from Oracle to Nvidia, on AI growth concerns.

🧠 Technical Trip

Interview Q&A from Morgan Stanley

👉 Want 1-on-1 recruiting help from Morgan Stanley bankers & 2,000+ top mentors? Apply to WSO Academy

🦈 Deal Dispatch

M&A, IPOs, And Other Notable Transactions

• Databricks is raising a Series K round of north of $1 billion, raising its valuation to $100 billion on $3.7 billion in revenue.

• SoftBank got FOMO and decided to take a 2% stake, or $2 billion investment in Intel SPAC king Chamath Palihapitiya is at it again.

• SPAC King Chamath Palihapitiya is at it again, raising $250 million for American Exceptionalism Acquisition Corp, targeting AI, energy, defense, and DeFi.

• Neuberger Berman is close to raising $5 billion for a private equity secondaries fund.

• Bain Capital and Cinven have resumed IPO preparations for German drugmaker Stada, targeting an IPO at a €10 billion valuation.

📊The Daily Poll

Previous Poll:

Jerome Powell speaks Friday. What’s your expectation?

25bps Cut: 42.7% // No Change: 38.5% // Rate Hike: 7.3% // Just Fed Rhetoric: 11.5%

Student Success Corner

👉 Are you next? Find out with WSO Academy

Banana Brain Teaser

Previous

Jack is now 14 years older than Bill. If in 10 years Jack will be twice as old as Bill, how old will Jack be in 5 years?

Answer: 23

Today

A border of uniform width is placed around a rectangular photograph that measures 8 inches by 10 inches. If the area of the border is 144 square inches, what is the width of the border, in inches?

How Would You Rate Today's Peel?

Happy Investing,
Chris, Vyom, Ankit, Colin, & Patrick

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