Luke Kawa6/5/25

Stocks sink as the president fights with the world’s richest man

US stocks erased early losses to climb to session highs after President Donald Trump said he had “a very good phone call with President Xi of China” before giving up all those gains in the afternoon to finish in the red as the president had a very public spat with Tesla CEO and world’s richest man Elon Musk — who’s ending the day many billions less wealthy than he started it.

The S&P 500 closed down 0.5%, the Nasdaq 100 fell 0.8%, and the Russell 2000 finished marginally in the red.

Consumer discretionary was far, far and away the worst-performing S&P 500 sector ETF, though all but communications services finished in the red.

Musk has taken exception with the “big, beautiful bill” making its way through Congress (which, among other things, would see electric vehicle tax credits eliminated), prompting Trump to declare that he was “very disappointed” in Musk. The Tesla CEO then claimed Trump would have lost the election without his help, and shares of the EV maker cratered as the barbs continued to fly between the two sides.

It was the 11th-worst day on record for Tesla, which tumbled 14.3%. The public spat also weighed on other “Trump trades” like Palantir.

Other big losers included Winnebago, which announced it’s laying off even more workers after posting preliminary third-quarter results that disappointed. And while a stiff drink may be in order after the chaos of the day, not enough folks have been indulging for Brown-Forman’s taste. The seller of Jack Daniel’s tumbled after whiffing on the top and bottom lines while calling for net income to fall for the full year.

On the other hand, Five Below was a standout performer, spiking after delivering strong earnings and announcing a partnership with Uber Eats.

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Tasha Matsumoto

Stocks eke out gains on hopes for a path forward for reopening the Strait of Hormuz

Stocks rebounded on news that Iran is drafting a protocol with Oman to “monitor transit” through the crucial Strait of Hormuz.

Bull cow in a field

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Matt Phillips2h

AI server cluster maker Penguin Solutions takes flight

Small cap AI server-cluster maker Penguin Solutions surged Thursday, after posting better-than-expected Q2 revenue and profit numbers Wednesday after the close, along with an increase in full-year sales and profit guidance.

The company — which was known as Smart Global Holdings until July 2024 — has positioned itself as a provider of “end-to-end AI infrastructure solutions.”

Its Advanced Computing division designs and sells computers, cabling, and coolings systems, the server racks and clusters of racks AI data centers need. Its other main division sells flash and DRAM memory products.

It’s a pretty small company, with a fully diluted market cap of just over $1 billion and roughly 2,900 employees, according to FactSet.

The stock is volatile. Penguin dove during last year’s tariff tantrum that followed Liberation Day in April. Then it turned tail and doubled through early October, amid a surge of call options activity that tends to reflect retail interest. From the October peak, it then plunged by about 50%, before Thursday’s renaissance.

For what it’s worth, call options activity in Penguin is pretty busy today too — relatively speaking — with roughly 2,625 traded as of about 1:15 pm ET. That’s the most since early January, when the company last reported quarterly numbers. The average volume over the previous 25 trading sessions is about 325 calls a day, according to FactSet data.

Penguin Solutions Stock Takes Off On AI Bolstered Outlook

Penguin Solutions Stock Takes Off On AI Bolstered Outlook

The company — which was known as Smart Global Holdings until July 2024 — has positioned itself as a provider of “end-to-end AI infrastructure solutions.”

Its Advanced Computing division designs and sells computers, cabling, and coolings systems, the server racks and clusters of racks AI data centers need. Its other main division sells flash and DRAM memory products.

It’s a pretty small company, with a fully diluted market cap of just over $1 billion and roughly 2,900 employees, according to FactSet.

The stock is volatile. Penguin dove during last year’s tariff tantrum that followed Liberation Day in April. Then it turned tail and doubled through early October, amid a surge of call options activity that tends to reflect retail interest. From the October peak, it then plunged by about 50%, before Thursday’s renaissance.

For what it’s worth, call options activity in Penguin is pretty busy today too — relatively speaking — with roughly 2,625 traded as of about 1:15 pm ET. That’s the most since early January, when the company last reported quarterly numbers. The average volume over the previous 25 trading sessions is about 325 calls a day, according to FactSet data.

markets

Momentum returns to optics stocks as the release valve for AI optimism

Potentially imminent end to the war? Buy optics stocks.

Maybe not? Buy optics stocks anyway.

Effectively all the juice left in the AI trade is coming from optics (and memory) stocks. And the latter group is taking a bit of a breather today while the former continues to surge.

Shares of Ciena Corp., Lumentum, and Coherent are building on recent big gains and among the biggest gainers in the S&P 500 near midday, while Applied Optoelectronics is also surging on Thursday.

These companies all provide solutions that help information move around in data centers, and thus are key beneficiaries of the aggressive capex plans of hyperscalers. Nvidia has invested $2 billion apiece in Coherent and Lumentum in deals that also include purchase commitments.

markets

Matt Phillips5h

Space stocks rip during a topsy-turvy day for the equity market

Satellite-services-from-space stocks surged Thursday after reports that Amazon is in talks to buy Globalstar, which provides voice and connectivity services from its satellite network. It also can’t hurt that the general mood around space is ebullient, following the successful launch of Artemis II on Thursday.

Planet Labs and ViaSat also soared on the news.

The gains for EchoStar — seen as a backdoor play at pre-IPO SpaceX exposure — and Rocket Lab were more muted, perhaps because a deep-pocketed competitor like Jeff Bezos getting serious about space services could complicate the plans of the two largest commercial space launch companies.

Rocket Lab and SpaceX see launch services as key to their aspirations of being major providers of voice and data services from low-Earth orbit satellites.

Tesla CEO Elon Musk’s SpaceX is the dominant provider of such services, and the early rumors on the company’s planned IPO — expected to be the largest ever — suggest the market is very excited about the prospects for the industry.

Elsewhere in the space stock world, Intuitive Machines — a maker of space infrastructure that provides services to NASA for lunar missions — also rose.

Globalstar surges after FT reports that Amazon is in talks to buy the satellite group

Globalstar surges after FT reports that Amazon is in talks to buy the satellite group

The gains for EchoStar — seen as a backdoor play at pre-IPO SpaceX exposure — and Rocket Lab were more muted, perhaps because a deep-pocketed competitor like Jeff Bezos getting serious about space services could complicate the plans of the two largest commercial space launch companies.

Rocket Lab and SpaceX see launch services as key to their aspirations of being major providers of voice and data services from low-Earth orbit satellites.

Tesla CEO Elon Musk’s SpaceX is the dominant provider of such services, and the early rumors on the company’s planned IPO — expected to be the largest ever — suggest the market is very excited about the prospects for the industry.

Elsewhere in the space stock world, Intuitive Machines — a maker of space infrastructure that provides services to NASA for lunar missions — also rose.

Hyunsoo Rim, David Crowther

Can Sandisk do the double?

The S&P 500 just had its worst quarter in years. Here are the biggest winners and losers.

Sandisk and energy stocks soared while software names sank amid a broad sell-off in tech stocks.

Balancing balls of different sizes on pink seesaws creating equilibrium

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