From Monday to Friday mornings, focusing on macro trends, U.S. stocks, AI, precious metals, and crude oil, using data to review the market and trends to seize opportunities, produced by PANews.
U.S. Stocks Close Higher, CPI Data Fails to Spark Inflation Concerns
The three major indexes closed mixed. The Dow Jones Industrial Average fell 0.04%, declining for the third consecutive session, dragged down by Home Depot and Microsoft. The S&P 500 rose 0.26%, approaching a record high. The Nasdaq Composite gained 0.54%, with AI hardware, storage, optical communications, and new cloud computing re-emerging as the main themes driving the market.
U.S. July CPI rose 0.1% month-over-month and 3.4% year-over-year; core CPI rose 0.2% month-over-month and 2.5% year-over-year, all in line with expectations, with the core year-over-year growth being the slowest since March 2021. The data, combined with last week's weak non-farm payrolls, formed a one-two punch. Money market odds for a September rate hike have dropped to 40%, with the probability of holding rates steady rising to about 60%.
- Goldman Sachs expects the Fed to most likely hold steady this year;
- Morgan Stanley's Ellen Zentner also noted that unless subsequent data changes significantly, holding steady in September remains the base case;
- CICC pointed out that U.S. inflation may have entered a new phase, with the driving force shifting from supply shocks like tariffs and oil prices to demand expansion driven by AI investment, potentially prolonging the inflation duration.
Gold continued its strong momentum, holding above $4,400, up over 9% in August. Silver showed even greater elasticity, rising about 14% in August, marking its eighth gain in eleven trading sessions, with spot prices hovering around $66. Citi reiterated its strong bullish view on silver, expecting prices to potentially rise to $90/ounce in the next 6-12 months, provided the Strait crisis de-escalates and the Fed turns more dovish, with investment demand picking up the slack from weak industrial consumption.
The oil market finally saw a breather, with WTI briefly falling below $81 and Brent below $87; WTI had risen about 11% over five consecutive sessions prior. The market is waiting for actual progress on the reopening of the Strait of Hormuz. The International Energy Agency warned that amid ongoing U.S.-Iran conflict, the global oil supply deficit this quarter could reach 1.8 million barrels per day, more than double previous forecasts, with 2026 potentially seeing the largest deficit in five years.
Trump claimed the U.S. has "complete control" over the Strait of Hormuz, but shipping data shows daily traffic is only a dozen vessels, far below the pre-war 130. Iran, through sporadic attacks, is creating a "fear factor," effectively controlling the passage routes. War risk insurance premiums have skyrocketed to 10% of the ship's value, costing millions per large oil tanker transit. eToro's Bret Kenwell warned that if oil surpasses $100, it could force the Fed to reassess its policy path.
The U.S. fiscal situation is also concerning. Treasury data showed the federal budget deficit for July reached $432.3 billion, widening about 48% year-over-year, the largest monthly deficit since March 2021 and a record high for that month. The cumulative deficit for the first 10 months of the fiscal year is nearly $1.8 trillion. The CBO projects the deficit will increase to $2.1 trillion for FY2026. Debt interest payments are becoming an underlying pressure keeping long-term rates elevated. So far this fiscal year, the U.S. has paid $1.17 trillion in interest on its $39.9 trillion debt, with net interest expense reaching $931 billion. CRFB President Maya MacGuineas stated bluntly that a deficit exceeding $2 trillion when the economy isn't in recession "is not normal."
AI Lacks Not Demand but Compute! Cloud and Optical Communications Surge, Storage Follows, Giants Diverge
Last night, funds clearly rotated out of traditional software and some Mag 7 giants into cloud compute, semiconductors, storage, and optical communications. Goldman Sachs data shows hedge funds continued net selling software stocks, while long-term money bought the dip, but the market price action ultimately sided with the former.
Conversely, the AI supply chain "selling shovels" heated up comprehensively. The Philadelphia Semiconductor Index rose 2.49%; SK Hynix up 9.01%, Seagate up 7.03%, SanDisk up 5.76%, Micron up 4.92%, Western Digital up 3.69%; in optical communications, Lumentum surged 13.63%, Coherent up 8.24%, Credo up 8.26%, Corning up 5.18%.
Cloud compute became the wildest sector of the day, with NEBIUS skyrocketing 34.14%, CoreWeave up 19.28%, IREN up 9.86%, Roundhill Neocloud ETF up 17.26%. CoreWeave's order backlog reached $104 billion, Nebius AI cloud sales soared 514% year-over-year. The market is once again believing that AI infrastructure demand not only exists but is already translating into contracts and revenue.
Morgan Stanley's Michelle Weaver offered a more critical industry insight: Enterprises are starting to see quantifiable returns from AI applications, but the real bottlenecks are shifting to compute power, electricity, labor, and policy. About 25% of S&P 500 companies can now quantify AI investment returns, up from just 14% a year ago, signaling AI demand is moving from narrative to realization.
DeepSeek V4 Pro official version quietly launched on the evening of August 12, with the model version switched to DeepSeek-V4-Pro-0813; simultaneously, SpaceX AI released Grok 4.6. Their competition is no longer just about "who chats smarter," but shifting toward Agent execution capabilities, complex programming, knowledge work, vision tasks, and token cost. Grok 4.6 API pricing starts at just $2 per million input tokens and $6 per million output tokens, with SpaceX AI claiming the price is about half that of other frontier models.
The real pressure this places on OpenAI, Anthropic, and Google is that as model capabilities rapidly commoditize, AI companies' moats may shift from the models themselves to compute power, ecosystem, and commercialization capabilities.
Specific Company Actions and Stock Moves:
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NEBIUS closed up 34.14%: Q2 revenue exploded 454% year-over-year, AI cloud sales surged 514%, and it signed four contracts averaging over $10 billion each. Approximately 24% short interest further amplified the post-earnings short squeeze, driving the stock from around $193 to $247 rapidly.
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CoreWeave surged 19.28%: Q2 revenue more than doubled year-over-year, order backlog reached $104 billion, and it raised full-year capital expenditure guidance. Strong orders and compute demand became core reasons for renewed bets on AI infrastructure.
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Cerebras Systems jumped 11.63%, but after-hours it once plunged over 17% due to earnings structure issues. Core Q2 revenue grew 103% year-over-year, cloud service revenue soared 287%, but core hardware revenue fell 23% year-over-year, revealing hardware sales volatility. The company announced a "disaggregated inference" solution with AMD and AWS to boost throughput 5x and raised full-year guidance;
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Cloud computing sector rallied violently: IREN surged 9.86%, Applied Digital up 4.92%, HUT 8 up 2.24%, Neocloud ETF up 17.26%.
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AI infrastructure player Super Micro Computer soared 19.02%: Q4 revenue nearly doubled to $11.12 billion, net profit skyrocketed 503% year-over-year, gross margin improved sharply to 17.5% from 9.5% a year ago, and guidance for the next fiscal year far exceeded market consensus expectations;
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Lumentum skyrocketed 13.63%: Q4 revenue grew 109% year-over-year, non-GAAP EPS surged 267%, with revenue and profit guidance for the next quarter comprehensively surpassing Wall Street expectations by 8% and 16% respectively.
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Coherent rose 8.24%, but after-hours it fell about 3% due to excessive short-term gains and high expectations. Q4 revenue increased 34% year-over-year to $2.05 billion, gross margin improved to 40.2%, and next quarter guidance was also stronger than expected, but high valuation triggered profit-taking on the news.
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Optical communications concept stocks broadly higher, Credo Technology up 8.26%, Corning up 5.18%, AAOI up 2.79%, Marvell Technology up 2.25%.
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Storage sector broadly higher: Roundhill Storage ETF (DRAM) surged 7.68%, SK Hynix jumped 9.01%, Seagate Technology up 7.03%, Western Digital up 3.69%, SanDisk up 5.76% (the company is about to hold its first post-spinoff Investor Day for 2026), Micron Technology closed up 4.92% (facing a new patent infringement lawsuit from Netlist).
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SpaceX surged 9.65%, market cap reaching $1.93 trillion. Musk's SpaceX AI officially released Grok 4.6, focusing on complex programming and long-duration Agent tasks, with API pricing at half that of comparable frontier models.
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Other giant moves: NVIDIA closed up 3.03%, hitting its highest closing price since June, with a total market cap of $5.42 trillion; Cisco Q4 revenue and EPS both beat expectations, with hyperscale cloud AI orders reaching $4 billion, but the stock initially rose 8% after-hours before reversing to a 6% loss; Apple closed down 0.87%, institutional reports indicate iPhone 18 Pro Max component costs may increase substantially by $300 due to parts inflation. Additionally, reports suggest Apple plans to pay publishers hundreds of millions for news content to improve the AI-powered Siri launching later this year; Google closed down 0.18%, announcing a reorganization of DeepMind, moving some teams into the enterprise structure to accelerate Gemini commercialization. Meanwhile, affected by memory shortages, the newly launched Pixel 11 series saw price hikes of $100 across the board. Meta plunged 3.38%, Microsoft fell 2.26%, Amazon dropped 1.83%, Tesla declined 1.59%.
Upcoming Focus:
August 13 (Thursday)
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20:30 U.S. July PPI: PPI will reveal whether business costs continue to pass through to end consumers. If PPI is hot, even with mild CPI, market fears of inflation resurgence may arise; if PPI cools in tandem, the "disinflation + easing policy pressure" trade will strengthen further.
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21:00 SanDisk Investor Day: Market focus is on NAND supply/demand, enterprise SSD, capital expenditure, high-bandwidth memory roadmap, and long-term margin targets. As storage stocks have been under pressure recently, SanDisk's messaging will directly impact sentiment for Micron, Western Digital, SK Hynix, and China's storage chain.
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JD.com Q2 earnings call, SMIC, Hua Hong Semiconductor results.
August 14 (Friday)
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U.S. SEC 13F Quarterly Holdings Filing Deadline: Filings will disclose U.S. hedge fund and institutional long stock holdings as of June 30. Market focus is on whether large institutions increased allocations to AI, optical communications, power, energy, gold, and financial stocks; however, 13F data has about a six-week lag and only covers long positions, not fully reflecting hedge funds' true risk exposure.
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Applied Materials earnings after U.S. market close: Market focus is on DRAM, advanced packaging, wafer fab equipment demand, and changes in China orders.
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Bill Gates visits South Korea, discusses SMR collaboration with SK Group and HD Hyundai: Market focus is on nuclear energy, small modular reactors combined with AI data center power demand. If cooperation details advance, it will reinforce the "AI power infrastructure" investment thesis.
