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Luke Kawa8/14/25

Stocks dip after hottest July producer price growth since 2022

ETFs that track major US stock indexes, such as the SPDR S&P 500 ETF, Invesco QQQ Trust, and iShares Russell 2000 ETF, slumped ahead of market open after July’s reading of the producer price index came in much hotter than anticipated.

The PPI and core PPI (ex-energy and food) each jumped 0.9% month on month, while both had been expected to bump up just 0.2%.

Financial services inflation was a big driver of the rise, especially portfolio management. This typically tracks the direction of the stock market and serves as an input into PCE inflation, the Federal Reserve’s preferred gauge of price pressures.

“The broader tone in the data seems hot enough it’s hard to shrug off,” Peter Williams, an economist at 22V Research, wrote. “PPI services ex-trade was hotter than all but four months after covid hit; overall core final demand PPI was the hottest since early 2022.”

That being said, this negative surprise on producer price growth isn’t upending expectations for what the Federal Reserve will do in September — that is, cut rates by 25 basis points. About 24 basis points of easing is priced in, little changed from the knee-jerk reaction to Tuesday’s CPI inflation data.

It’s not often you see producer price index data prompt a noteworthy reaction from the stock market. But it’s also not often that we’re wrestling over how an economy will digest a significant increase in tariff rates.

(Tariffs themselves are excluded from PPI data, but the pricing changes that these domestic producers make in response to tariffs do make their way into the data.)

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Plug Power soars as HC Wainwright boosts price target to $7, highest on Wall Street, spurring furious call buying

Call volumes appear poised to set another record, exceeding last week’s high-water mark.

Plug Power

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Max Knoblauch1h

Roblox falls as options market turns against the company following a report about slowing growth

Roblox fell more than 5% on Friday morning as bearish options market bets against the company outweighed bullish ones by about three to one in early trading.

This would mark the most bearish tilt for its put/call ratio since 2022, and is fueling the largest intraday drop for the stock since August, when the company was rocked by child safety lawsuits.

Put options with a strike price of $130 that expire today have the most open interest and highest daily volume. They’ve swung from being out of the money to well in the money based on the price action so far on Friday.

Investors appear to be less optimistic about the gaming platform following an M Science report from analyst Corey Barrett that asserts that US bookings growth has “decelerated sharply” recently, slowing to the low 30% range down from the mid- to high 50% range in July.

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GameStop falls after securities filing that allows for potential shareholder dilution

GameStop is lower in early trading after filing paperwork that lays the foundation for the video game and collectibles retailer to raise money “from time to time” through the sale of stock, debt, and related securities.

Importantly, this filing does not include a specific intention to issue stock and dilute shareholders imminently, but merely provides management with the ability to do so at their discretion. The potential for future dilution may be front of mind for investors this morning, however, given the shares' dip.

The filing says that unless stated differently in a specific fundraising endeavor, management plans to use any proceeds that may be received in the future “for general corporate purposes, including making investments in a manner consistent with our investment policy and potential acquisitions. If we decide to use the net proceeds from a particular offering of securities for a specific purpose, we will describe that in the related prospectus supplement.”

Given GameStop’s history, which has been punctuated by a some huge spikes during which the company has been able to successfully raise money, it would be irresponsible to not have a standing shelf registration that lets management raise capital during periods of unbridled enthusiasm.

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An internal Army memo reportedly says Anduril and Palantir’s battlefield communication system has deep flaws

The new NGC2 platform, the Army’s next-gen battlefield communications network built by Anduril Industries, Palantir, and others, is full of “fundamental security” problems and should be considered “very high risk,” per an Army memo cited by Reuters.

Anduril and Palantir have both secured Pentagon contracts in recent months, with the former having promised faster, cheaper, and more advanced solutions than traditional defense suppliers. In July, Anduril won a $100 million contract to build a prototype of NGC2 alongside Palantir and several smaller contractors.

However, in an internal memo, the Army’s CTO warned the prototype version could allow adversaries to gain “persistent undetectable access,” with the memo explaining, “We cannot control who sees what, we cannot see what users are doing, and we cannot verify that the software itself is secure.”

Still, the Army’s chief information officer, Leonel Garciga, told Reuters that the memo was part of a process to “triage” vulnerabilities and address them.

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Claire Yubin Oh7h

Applied Materials slumps after forecasting $600 million fiscal 2026 revenue hit from export curbs

Applied Materials is down 3% in early trading after the semiconductor machinery maker said revenues could take a $600 million hit in the next fiscal year, on the back of widening chip export restrictions.

Per the company’s regulatory filling, net revenue for the fourth quarter of 2025 will take a $110 million dent, while annual sales next year would be reduced by “approximately $600 million.” Applied Material’s fiscal 2026 runs through next October.

In a move to restrict the development of China’s domestic chip industry, the Commerce Department started to prevent sanctioned companies from using affiliates to access restricted US goods. On Monday, the blacklist was widened to include majority-owned subsidiaries of listed companies.

“We doubt AMAT will be the only US semicap player impacted here,” Bernstein analyst Stacy Rasgon cautioned, while noting that other players in the industry have not offered any commentary on this subject.

China is the top market for Applied Materials and others in the wafer fab equipment industry.

In its most recent quarter, 35% of AMAT’s net revenues were generated by sales to China. For peers Lam Research and KLA Corp, those shares stood at 34% and 33%, respectively, for the year ending in June.

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