Markets
Luke Kawa

US stocks sink on momentum unwind, mounting growth fears

It was a risk-off day, with stocks slumping while bonds rallied briskly amid data pointing to an unexpected cooling in the US services sector in February and deteriorating consumer confidence.

The S&P 500 tumbled all the way down to its 50-day moving average, closing 1.7% lower.

The Nasdaq 100 declined 2.1% while the Russell 2000 gave back 2.9%.

There was a decidedly defensive tenor to the S&P 500 sector ETF price action: consumer staples were the best-performing sector, up more than 1%, utilities were flat, and all other sectors declined. Tech, consumer discretionary, industrials, and energy were all off more than 2%.

The brisk retreat in the benchmark index over the past two sessions has the hallmarks of a momentum unwind catalyzed by Walmart’s lackluster outlook: the iShares MSCI USA Momentum Factor ETF fell nearly twice as much as the S&P 500 in the final couple trading days of the week. Walmart, for its part, extended yesterday’s losses to close below its 50-day moving average for the first time since August.

Flows related to this month’s options expiry may have played a role in the magnitude of the downdraft.

Nvidia, for instance, had a significant amount of open interest in calls expiring on Friday with a strike price of $140. While the stock opened around that level, the value of those contracts plummeted as shares dipped lower, likely exacerbating the selling pressure on the stock.

A few bright spots on the tape: Celsius spiked after announcing a deal to buy Alani Nu, which is popular among Gen Z. It’s a day ending in y, so Alibaba rallied strongly, this time on reports that GameStop CEO Ryan Cohen upped his stake in the Chinese e-commerce and cloud giant to about $1 billion.

Hims & Hers cratered after the FDA said weight-loss drugs Ozempic and Wegovy are no longer in a shortage, which curbs its ability to sell copycat editions. The news was a boon for Novo Nordisk, however.

Luxury reseller The RealReal also plummeted after issuing full-year forecasts for revenues and adjusted EBITDA that came in light relative to analysts’ expectations.

Probes also weighed on certain companies’ shares to end the week. UnitedHealth sold off on a report that the DOJ is investigating its Medicare billing practices. Meanwhile, CrowdStrike is reportedly under scrutiny by both the DOJ and SEC.

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markets
Helena Cheng

Oil tumbles below $80 to 3-month low on US-Iran deal

Oil prices slid to their lowest levels in more than three months today after a preliminary ceasefire agreement between the US and Iran raised expectations that more crude could return to global markets and key shipping routes through the Strait of Hormuz could reopen.

Brent crude fell below $78 a barrel while West Texas Intermediate dropped to $73.31, extending losses as traders priced in lower geopolitical risk premiums tied to Middle East supply disruptions.

The preliminary pact announced by President Donald Trump and Iranian leaders establishes a 60-day ceasefire to end the active hostilities that have choked the Middle East since late February. A formal memorandum of understanding is scheduled to be officially signed in Switzerland this Friday according to Bloomberg report.

President Donald Trump said on Sunday that the Strait of Hormuz would be opened when the agreement is signed in Switzerland on Friday, writing on Truth Social, “Ships of the World, start your engines. Let the oil flow!”

US Energy Department data, meanwhile, showed that America's strategic oil stockpiles sank last week to their lowest level since 1983, indicating sustained demand to rebuild them even if the Mideast conflict ends.

Stocks that moved lower:

markets
Helena Cheng

Eos Energy surges on commercial launch of second battery production line

Eos Energy Enterprises is surging in early trading after announcing the official start of commercial production at its second automated battery manufacturing line.

In a statement, the company said this milestone positions it to scale production of its proprietary zinc-based long-duration energy storage systems to meet rising commercial demand.

Management touted the enhanced efficiency of this facility, with design upgrades slashing raw material travel by 86% and shortening the physical production line length by 40% compared to Line 1.

“Battery Line 2 demonstrates our ability to continuously improve as we scale,” said John Mahaz, Chief Operating Officer of Eos. “It validates that our manufacturing system can be replicated and scaled with discipline.”

The battery energy storage company confirmed that while subassemblies will continue coming online through the early third quarter, full production capacity is targeted for the fourth quarter of 2026. The ultimate goal is to hit an aggregate 4 gigawatt-hours of annual manufacturing capacity by the end of 2026. Management also highlighted that Battery Line 1 already surpassed its full-year 2025 output within the first 164 days of 2026.

Today’s announcement builds on recent operational momentum for Eos, which posted better-than-expected Q1 sales and announced a joint venture with Cerberus Capital Management in May. However, shares are still down 37% year to date.

For the full year, Eos still expects to achieve revenues between $300 million and $400 million, in line with its previously provided guidance.

markets
Luke Kawa

Qualcomm reportedly in talks to acquire AI chip design company Tenstorrent

Qualcomm is in talks to acquire AI chip design firm Tenstorrent for $8 billion to $10 billion, according to The Information.

This transaction, if completed, would be another concrete signal of the San Diego-based chip company’s attempt to carve out a niche in the upstream AI space (data centers), rather than focusing on end-user devices.

Qualcomm’s key business of handset chips has fallen on hard times, particularly in China, due to the memory chip shortage.

Less than eight weeks ago, the chip company was the lowlight in the Philadelphia Semiconductor Index, down about 20% year to date.

Shares proceeded to surge over 60%, buoyed by optimism that the rising AI tide will lift all boats. With the release of Q2 earnings, CEO Cristiano Amon said that initial shipments of AI chips to a “leading hyperscaler” were on track for later this year, and to expect more on the company’s AI growth plans at its investor day on June 24 (next week). Last month, Bloomberg reported that Qualcomm is poised to sell “millions” of AI chips to TikTok parent ByteDance.

Established AI chip giants and hyperscalers alike have reached agreements with or gobbled up burgeoning AI chip companies as the boom rolls on. In December, Nvidia announced a major licensing deal with AI inference specialist Groq, while Meta bought AI chip startup Rivos in September.

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