Wall Street Faces Mixed Open as Inflation Data and AI Developments Drive Focus
U.S. stock futures pointed to a mixed start Tuesday, with S&P 500 futures edging lower while Nasdaq futures climbed. Treasury yields pulled back from morning highs, offering equities some breathing room. Meanwhile, Brent crude surpassed $99 a barrel amid renewed Middle East conflict over the long holiday weekend, lifting oil prices.
August Inflation Report and Fed Rate Expectations
This week’s August inflation data carries significant implications for the Federal Reserve’s next policy move. Following Friday’s robust jobs report, traders now see a 60% probability of a rate hike at next week’s FOMC meeting, according to the CME Group’s FedWatch tool. Apple’s iPhone launch event is scheduled for tomorrow, and the CNBC Investing Club will hold its September Monthly Meeting for subscribers at noon ET Thursday.
OpenAI’s Astra Model Sparks AI Hardware Optimism
OpenAI’s new Astra model is generating significant buzz. Ben Reitzes of Melius Research said it shows “OpenAI is so back,” a development expected to support the AI chip and hardware trade. Nvidia CEO Jensen Huang posted on X that Astra was trained on 100,000 Grace Blackwell GPUs, adding: “400K GPUS coming online next,” he wrote.
Intel Plans CPU Price Hike as Turnaround Gains Traction
Intel, a Charitable Trust holding, is expected to raise CPU prices by another 10% this fall, according to Taiwan’s DigiTimes, aiming to improve gross margins rather than gain market share. Shares rose nearly 5% in premarket trading. Northland Securities upgraded Intel to buy from hold, citing material progress in its turnaround and the national security importance of Intel Foundry.
Refiners See Massive Price Target Increases on Record Margins
UBS significantly raised price targets for major refiners: Marathon Petroleum to $405 from $321, Phillips 66 to $300 from $235, and Valero to $450 from $355, while reiterating buy ratings on all three. The sector remains among the market’s hottest, driven by elevated refining margins. Diesel crack spreads, a key profitability gauge, hit an all-time high last week.
Citi Upgrades Old Dominion and C.H. Robinson on Freight Cycle Inflection
Citi upgraded trucker Old Dominion Freight Line and freight broker C.H. Robinson to buy from hold after a summer decline created what analysts called “quality at a reasonable price.” They argued the freight cycle inflection remains on track, which bodes well for Charitable Trust holding FedEx Freight.
JPMorgan Initiates FedEx Freight Coverage with Buy Rating
JPMorgan initiated coverage of FedEx Freight with a buy rating and $160 price target. The thesis aligns with the Club’s view following the spin-off from FedEx Corp: as a standalone entity, FDXF can improve profitability and service quality through self-help initiatives. While the stock has been sluggish post-spin, these are not overnight fixes.
Pivotal Research Starts SpaceX Coverage, Highlights Starship Importance
Pivotal Research initiated coverage of SpaceX with a buy rating and $220 price target. Analysts argued that for SpaceX to be a successful investment, the company must nail development of the reusable Starship rocket. Positive research flow mitigates concerns about additional shares entering the market from expiring IPO lockups.
Stifel Raises Hinge Health Target After Management Meeting
Stifel increased its price target on Hinge Health to $115 from $96, maintaining a buy rating after meeting with management. The digital physical therapy platform, with broader healthcare ambitions, has surged 47% in three months and nearly doubled year-to-date. CEO Daniel Perez presented a compelling story on “Mad Money” in May.
UBS Upgrades Eaton on AI-Driven Electrical Demand and Data Center Expansion
UBS upgraded Eaton, a Charitable Trust name, to buy from hold. Analysts cited improving margins ahead due to proactive pricing and better execution. Strong demand for Eaton’s electrical equipment continues, fueled by the AI infrastructure buildout. The recent acquisition of liquid cooling provider Boyd Thermal makes Eaton a more well-rounded data center supplier, as detailed for Club members last week.
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