Market Snapshot

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📉 Banana Bits

• U.S. jobless claims fell to 203,000, reinforcing signs that the labor market remains relatively resilient.

• Nvidia confirmed its first H200 shipments to China under new U.S. licensing rules after a months-long sales freeze.

• U.S. banking regulators finalized new standards clarifying which practices may be considered unsafe or unsound across the industry

• Tokyo inflation picked up in August, strengthening expectations that the Bank of Japan could raise rates again.

• China’s factory sector is expected to remain in contraction territory for another month as growth stays soft.

Market News

AI Rips, Then Wall Street Waits on Warsh

Wall Street finished Thursday firmly higher as Nvidia’s blowout outlook put the AI trade back in charge. The S&P 500 rose 0.72%, the Nasdaq Composite jumped 1.57%, and the Dow gained 0.20%. Nvidia surged 8.7% after its earnings and long-term outlook reinforced expectations that the AI infrastructure boom still has years to run. Salesforce soared 22.6% after raising its annual revenue and profit forecasts, while CrowdStrike jumped 20.5% after beating expectations and lifting its full-year revenue outlook.

But Thursday’s rally was much narrower than the headline indexes suggest. The S&P 500 technology sector climbed 3.4% and was the only sector to finish higher, while the other ten sectors fell. The semiconductor index gained 2.3%, but weakness elsewhere showed investors were not indiscriminately piling into risk. Initial jobless claims also fell to 203,000, below the 208,000 economists expected, reinforcing the picture of a labor market that remains stable enough for the Fed to keep its attention on inflation.

That inflation fight is now the market’s main event. Several Fed officials sounded hawkish at Jackson Hole on Thursday: Kansas City Fed President Jeffrey Schmid said inflation remains “stubborn” and questioned whether current policy is restrictive enough, while Cleveland Fed President Beth Hammack said she believes “now is the time to act.” Futures on Friday morning were pricing roughly a 35% chance of a September rate hike and fully pricing a move by December. Fed Chair Kevin Warsh delivers his first Jackson Hole keynote as chair at 10:00 a.m. ET today, with investors looking for clarity on how the Fed plans to deal with persistent inflation and recent bond-market volatility.

Markets were already shifting into wait-and-see mode Friday morning. U.S. stock futures were mixed to slightly lower after Thursday’s tech surge, while European shares opened stronger, with the STOXX 600 up about 0.6%. The 10-year Treasury yield was around 4.68% and the 30-year near 5.20%. Asian markets were mixed, with Nvidia’s rally lifting Taiwan and Japan while South Korea lagged.

Oil added another wrinkle. Brent jumped 2.1% Thursday to $89.70 after reports that the Trump administration was not interested in reviving the terms of June’s agreement with Iran, but crude eased again Friday morning as oil flows through the Strait of Hormuz increased and Gulf exports continued to recover. Brent remained on track for a weekly decline of more than 5%.

Peel Take: Thursday proved the AI trade still has plenty of horsepower, but it was hardly an everything rally. Nvidia, Salesforce, and CrowdStrike dragged the major indexes higher while ten of eleven S&P sectors finished in the red. Now the earnings hurdle is cleared and the microphone belongs to the Fed. With inflation still sticky, labor data holding up, and markets already pricing another hike by year-end, Warsh’s Jackson Hole debut could determine whether Thursday’s tech party spills into the weekend or gets an early visit from the bond-market police.

What's Ripe

Salesforce Inc. (CRM) 22.58% 

• Surged 22.6%, making it the best-performing stock in the S&P 500, after Salesforce reported stronger-than-expected second-quarter results, raised its full-year revenue and profit forecasts, and expanded its Anthropic partnership with the launch of Claudeforce. The combination helped ease concerns about slowing growth and strengthened the case that Salesforce can monetize generative AI across its enterprise software platform.

• Peel Take: Salesforce is starting to convince Wall Street that AI can translate into actual growth, not just another product announcement. The deeper Anthropic partnership strengthens its AI offering, while the raised outlook suggests the core business still has momentum. That is exactly the combination investors wanted to see.

NVIDIA Corp. (NVDA) 8.74% 

• Surged 8.7% after the AI chip giant delivered stronger-than-expected second-quarter results and issued a bullish long-term growth outlook. Management projected roughly 70% revenue growth next fiscal year, well above Wall Street expectations, reinforcing confidence that demand for AI computing infrastructure remains strong.

• Peel Take: Nvidia gave investors what they really wanted: evidence that the AI spending boom has staying power beyond the next few quarters. With hyperscalers and AI labs still pouring billions into computing capacity, Nvidia’s longer-term guidance helps counter fears that AI infrastructure spending is approaching a peak.

What's Rotten

Hormel Foods Corp. (HRL) 10.25%

• Fell 10.25%, making it the worst-performing stock in the S&P 500, after third-quarter sales declined and Hormel cut its full-year sales outlook. Management cited declines in commodity turkey and private-label snack nuts, lower commodity-based pricing in parts of the business, and continued pressure on consumers.

• Peel Take: Hormel is dealing with a rough mix of weaker consumer demand and lower commodity-based pricing. Cheaper inputs can help costs, but they do not mean much when volumes are falling and the company is cutting its sales outlook. Investors looked past the earnings beat and focused on a top line that is still moving in the wrong direction.

Marvell Technology Inc. (MRVL) 1.49%

• Fell 1.49% during Thursday’s regular session, then dropped sharply after hours despite reporting strong second-quarter results and raising its fiscal-2027 and fiscal-2028 revenue forecasts. Investors focused instead on the limited near-term contribution from Marvell’s massive Google custom-chip agreement, with the biggest revenue impact not expected until fiscal 2029.

• Peel Take: Marvell delivered growth, but Wall Street wanted it faster. Its custom-AI-chip opportunity with Google could be enormous, yet investors were hoping that deal would move the revenue needle sooner. In an AI market priced for acceleration, even strong long-term numbers can disappoint when the payoff sits a few years away.

🧠 Technical Trip

Interview Q&A from Barclays

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🦈 Deal Dispatch

• Nvidia reportedly agreed to acquire Hugging Face for $12.9 billion, extending its push across the AI software ecosystem

• Shein priced its $1.7 billion Hong Kong IPO, valuing the fast-fashion company at roughly $26.5 billion.

• Socure raised $156 million at a $5.2 billion valuation and simultaneously acquired identity-verification startup Fravity.

• Flashlight Capital offered $655 million for Samsung affiliates’ 20.6% stake in S-1 at a roughly 45% premium.

Student Success Corner

Banana Brain Teaser

Previous

A company trades at 10× EBITDA and has $100 million of net debt. If EBITDA is $50 million, what is the company’s implied equity value?

Answer: $400 million

Today

A company buys $120,000 of equipment with a 4-year useful life and no salvage value. After one year, what is the equipment’s book value under straight-line depreciation?

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

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