Market Snapshot

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📉 Banana Bits

• Nvidia Customers Told AI Server Prices Could Rise More Than 15%.

• U.S. Imposes 50% Tariffs on $20 Billion of Canadian Products.

• Citadel Slashes Its Situational Awareness Exposure by Over 80%.

• U.S. Business Activity Expands at Fastest Pace Since April 2022.

• Japan’s Price Pressures Strengthen the Case for Higher Rates.

Market News

Wall Street finished a volatile week on a stronger note as US business activity expanded at its fastest pace in more than four years, helping ease concerns about an economic slowdown. The Dow gained 1%, while the Nasdaq 100 snapped a five-day losing streak ahead of Nvidia’s highly anticipated earnings. Bitcoin climbed above $77,000, while oil finished the week higher. The rebound came despite lingering pressure from elevated Treasury yields, with investors waiting for Treasury Secretary Scott Bessent’s promised fiscal-consolidation plan after recent government efforts to contain long-term borrowing costs.

The bigger question for markets is increasingly shifting from corporate earnings toward interest rates and government debt. Investors remain concerned that persistent deficits, heavy Treasury supply, inflation and surging corporate borrowing to fund AI infrastructure could keep long-term yields elevated. Nvidia earnings remain a major test for the AI trade, but attention is also turning toward Fed Chair Kevin Warsh’s upcoming Jackson Hole speech for clues on monetary policy. Meanwhile, the AI arms race continues: Anthropic hired a former Google chip executive as it explores developing its own semiconductors, Nvidia reportedly agreed to a $6 billion Poolside licensing deal, Nscale is reportedly seeking to raise up to $3 billion in a US IPO, and Apple is cutting jobs across Siri and Vision Pro teams as it shifts resources toward new devices and AI.

Peel Take: The US economy is sending Wall Street a mixed gift: growth remains strong enough to support earnings, but perhaps too strong to make lower rates an easy bet. That makes bond yields the market’s pressure point. With Nvidia earnings and Jackson Hole approaching, investors face two major tests at once whether the AI boom can still justify its massive spending and whether the Fed can keep rates steady without long-term yields doing the tightening for it.

What's Ripe

Robinhood Markets Inc. (HOOD) 13.70% 

• Surged 14%, making it the best-performing stock in the S&P 500, as the crypto rally continued to lift digital-asset-linked stocks. Coinbase gained 8.2% and Bitcoin-heavy Strategy rose 6.1%, with the sector benefiting from President Donald Trump’s push for Congress to pass the Clarity Act and establish clearer rules for the US crypto industry.

• Peel Take: Crypto stocks are getting a double boost from rising token prices and improving regulatory sentiment. Clearer rules could encourage more institutional and retail participation, directly benefiting platforms like Robinhood and Coinbase while Strategy remains a leveraged play on Bitcoin itself.

Moderna Inc. (MRNA) 8.86% 

• Rebounded 8.9%, making it the second-best performer in the S&P 500, while partner Merck gained 2.4%. The bounce followed Moderna’s 23.6% plunge on Thursday, when investors took profits after the stock’s extraordinary nearly 177% one-day surge triggered by positive trial results for its personalized cancer vaccine co-developed with Merck.

• Peel Take: Moderna is experiencing extreme price swings as investors try to value what could be a major new chapter beyond its COVID franchise. The cancer-vaccine results have revived excitement around its mRNA platform, but after such a massive rally, expect volatility to remain high as attention shifts from promising clinical data toward regulatory approval and commercialization.

What's Rotten

Alibaba (BABA) 8.57%

• Fell 8.6%, reversing the previous session’s modest gain after its quarterly earnings missed Wall Street expectations. The weakness came despite surging AI-related revenue, highlighting that rapid AI growth wasn’t enough to offset concerns around the company’s broader profitability and earnings performance.

• Peel Take: Alibaba’s AI engine is accelerating, but investors want to see that growth translate into group-level earnings. The selloff shows that AI revenue alone isn’t enough anymore with expectations around China’s AI leaders rising rapidly, Alibaba needs to prove that heavy AI investment can generate sustainable profit growth.

Marvell Technology Inc (MRVL) 5.57%

• Fell 5.6%, making it the worst-performing stock in the S&P 500, although shares still finished the week up 6.8%. Earlier in the week, Marvell issued Google a warrant to purchase up to 58.97 million shares, potentially giving the Alphabet-owned company a stake worth around $12.19 billion.

• Peel Take: The daily pullback looks more like cooling after a strong week than a rejection of the Google news. A potential multibillion-dollar Google stake strengthens Marvell’s position in the custom AI-chip ecosystem, but after the initial excitement, investors are refocusing on how much actual revenue and earnings the relationship can generate.

🧠 Technical Trip

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🦈 Deal Dispatch

M&A, IPOs, And Other Notable Transactions

• CoVolt Power files for a U.S. IPO, seeking an NYSE listing as power demand surges.

• AI cloud firm Nscale seeks up to $3 billion through a potential U.S. public offering.

• YMTC parent CCSH targets $4.9 billion Shanghai IPO to fund production upgrades and advanced research.

• Monte Paschi launches twin bids totaling €34 billion for rivals Banco BPM and Banca Generali.

Student Success Corner

Banana Brain Teaser

Previous

An investor puts $40,000 into an asset that rises 15%, then withdraws $10,000. How much money remains invested?

Answer: $36,000

Today

A company has $500 million in revenue and a 20% EBITDA margin. Revenue grows by 10%, while the EBITDA margin increases to 22%. By what percentage does EBITDA increase?

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

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