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U.S. airstrikes on Iran accelerating, AI agents going rogue, Japan’s yen reaching a new four decade low, and 30-year bond yields testing the highest levels since the global financial crisis.
Seems like less than the perfect backdrop for two Magnificent Seven cohorts to kick off the heart of the second quarter earnings season. Google parent Alphabet and electric-vehicle maker Tesla both report – after the close of trading.
But such is the nature of markets this summer with the Iran war in the Gulf taking global crude prices to their highest levels since early June. They are 30% higher this month alone and the conflict is rattling sentiment in global markets.
The inflation threat alone is lifting bets on a Federal Reserve rate hike, and taking 2-year Treasury note yields to 4.25%, near the highest in eighteen months, while growth, debt and political risks are driving real 30-year bond yields to their highest levels since 2009.
A reportedly hawkish message from the Bank of Japan, meanwhile, did little to stem the yen’s historic slide, with the currency reaching a fresh 40-year low of 163.24 in overnight trading, prompting renewed risks of intervention.
Added to the mix was a blog from OpenAI saying that its advanced AI models, which received U.S. government clearance just a few weeks ago, hacked into upstart HuggingFace while conducting a cybersecurity test. Barron’s contacted Open AI for further comment.
Stocks look set for another round of declines as a result of that bearish mix. But investors will be hoping Google’s looming update and AI spending plans can steady the ship after the close.
The tech giant has problems of its own, however, with reported delays of a key AI model, an expensive stock multiple, and free cash flow generation that’s fallen by nearly 50%.
It may be summertime, but the market livin’ is by no means easy.
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SpaceX Shares Recover After Elon Musk Warns Short Sellers
SpaceX shares snapped a painful, seven-day losing streak on Tuesday, a day after billionaire CEO Elon Musk warned short sellers that the survival probability of firms that borrow SpaceX stock and bet against it is “very low.”
About 17% of SpaceX shares available for trading have been sold short, a very high percentage compared with Apple’s 1%. Macquarie analyst Paul Golding, who rates SpaceX shares Buy, calls SpaceX’s recent price moves a “compelling entry point.”Some of the high degree of short interest in SpaceX is because so few shares are available to trade. Most SpaceX stock is still held by early investors who are restricted from trading. More stock will become available after SpaceX reports second-quarter financials and operational results on Aug. 4.One reason SpaceX stock has been weak recently is the fear that those early investors would take profits when they are allowed to sell. Before Tuesday, SpaceX stock had declined for seven straight sessions, losing 21%, and down about 47% from their all-time high of $226 a share.SpaceX on Monday scrubbed its 13th Starship test, a Falcon 9 launch carrying two dozen Starlink satellites, after encountering an engine issue before launch. The test flight was rescheduled for Thursday.
What’s Next: A successful Starship test might help the stock. So could earnings. High short interest raises the chance of a short squeeze, when bearish investors rush to buy stock, raising prices, creating the need to buy even more stock to limit losses.
—Al Root and Janet H. Cho
Why Micron’s Stock Was Soaring Before Google’s Earnings
Google parent Alphabet is on tap to report earnings later today, and Wall Street expects capital spending to double as it builds the infrastructure needed to power artificial intelligence. The earnings, which kick off reports from Big Tech, are already lifting shares of memory chip maker Micron Technology.
Memory chip stocks are engaged in something of an artificial-intelligence tug of war. They stand to get a boost from any increased AI investment by tech companies, but they also face the risk that the very same companies are working on innovations that could reduce the need for their memory chips.Micron shares jumped 12% on Tuesday, for a market value back above $1 trillion after a recent slump. Still, the stock is up nearly 800% over the past 12 months. Korea-based SK Hynix’s American depositary receipts were up even more, by 13.8%.While that’s a big jump for a single day, it’s just $1 above SK Hynix’s $170 opening price on July 10 when the ADRs first started trading. Investors look to be confident tech companies will raise their AI investment, increasing the demand for high-bandwidth memory and other components.Wall Street is also watching for any improvements that could reduce the need for memory as tech companies navigate the soaring costs of those components. Google is eyeing a new chip that would hardwire elements of its models directly into the silicon, reducing the need for high-bandwidth memory, The Information reported.
What’s Next: This new chip is reportedly targeted for 2028 for deployment and it isn’t clear to what extent Alphabet would use it versus other AI chips. The use of it for external customers could be limited. A Google Cloud spokesperson said teams are constantly researching and “experimenting with new innovations.”
—Adam Clark and Anita Hamilton
Super Micro Computer’s Gross Margins Are Surging
Super Micro Computer, the artificial intelligence server maker, unexpectedly said its gross margins for the quarter ending in June will be in the range of 15% to 17%, double its previous guidance, because of what it called “favorable customer and product mix.” Its new orders are surging.
The news sent the shares up as much as 21% late Tuesday. While revenue is on track to be near the lower end of prior guidance of $11 billion to $12.5 billion, Super Micro’s backlog rose to record levels, with $60 billion of new orders to be delivered in future quarters.The tech firm’s shares have fallen nearly 50% over the past year because of a number of problems. In March, the Justice Department charged co-founder Yih-Shyan “Wally” Liaw in an alleged plan to smuggle U.S.-assembled servers to China. Liaw, who resigned in 2018, pleaded not guilty.Then in June, two of its employees were detained in Taiwan as part of an investigation into alleged smuggling of Nvidia chips to China. Super Micro has said it isn’t a target of the investigation and is working with authorities.In early 2025, the company nearly got delisted from Nasdaq after failing to file regulatory reports on time. Shares rebounded from both scandals as Super Micro reported profits from the AI boom, but sold off sharply in June after the company announced that it was raising $7 billion in equity financing.
What’s Next: That financing is intended to support it amid the surge in AI server orders but the news sparked a sell off in the stock because investors were worried about dilution. Super Micro next reports earnings on Aug. 11 after the market closes.
—Anita Hamilton
Kraft Heinz Hopes Mickey Mouse Can Help Its Turnaround
Mickey Mouse can sell plenty of macaroni and cheese, but will that be enough to help revive Kraft Heinz? Disney and the ketchup maker have announced a multiyear partnership, and both stocks could do with a boost.
The deal will place brands including Heinz, Philadelphia, and Kraft Mac & Cheese across Disney’s North American theme parks, resorts, and cruise ships. It also covers Disney’s studios and streaming platforms.The partnership sounds promising, but neither stock moved much. Disney and Kraft Heinz shares have dropped 20% and 6% over the past 12 months, respectively.Wall Street won’t raise its earnings estimates until it sees more evidence that the deal can boost earnings. The companies didn’t disclose contract value, revenue contribution, or profit expectations on Tuesday.For Kraft Heinz, the deal is less about selling ketchup inside Cinderella Castle than making its aging supermarket brands feel culturally relevant again. The packaged-food maker is investing $600 million in marketing, sales, research, and product improvements as new CEO Steve Cahillane attempts to revive demand.
What’s Next: Like many packaged-food companies, Kraft Heinz has been struggling with persistent volume declines. Management expects organic sales to fall by between 1.5% and 3.5% this year.
—Evie Liu and George Glover
Utz’s Take-Private Deal Opens Germany’s Intersnack Group to U.S.
The Pennsylvania-based snack maker Utz Brands has agreed to a $2.9 billion take-private transaction that opens the door to the U.S. for German chips and pretzel giant Intersnack Group, which first brought Utz the idea. The transaction is expected to close in the fourth quarter of 2026.
Both Intersnack Group and Utz began as family-owned potato chip makers, a background that Utz mentioned as a compelling part of the deal. Intersnack is buying all of Utz’s class A common stock for $14.25 a share in cash, a 91% premium for an enterprise value of about $2.9 billion.Utz’s Rice and Lissette families will retain a 50% ownership stake in the combined company, and Intersnack Group will own the other half. Utz CEO Howard Friedman said he was impressed by Intersnack’s “deep understanding of the snacking landscape,” experience growing brands, and strength in innovation.TD Cowen analysts led by Robert Moskow wrote that considering the unexpected business challenges to the snack industry posed by weight-loss drugs, and the progressive decline in small- to mid-cap valuation premiums, they view the outcome of the merger as “favorable.”Utz will release second-quarter financial results on Aug. 5, but won’t host an earnings conference call or issue an earnings presentation or prepared remarks. Dylan Lissette, chairperson of Utz’s board of directors, will become executive chair of Utz after the deal closes.
What’s Next: Intersnack is one of the leading snack makers in Europe, Australia, and New Zealand, with 35 production sites worldwide, TD Cowen wrote. Post-merger, the company could have $6.6 billion in 2026 annual sales, including $1.5 billion from Utz and $5.1 billion from Intersnack.
—Janet H. Cho
Dear Quentin,
My husband and I have been married for more than 10 years. It is a second marriage for both of us, and we both have children from our previous marriages. We live in a house that I purchased entirely with money I had before we were married.
When we married, we agreed that if I passed away while we were still married, he would inherit 100% of the house. However, if we divorced after being married for more than 10 years, he would be entitled to 18% of the home’s value.
Do you think this prenuptial agreement is still fair given our circumstances?
—The Wife
Read the Moneyist’s response here.
—Newsletter edited by Liz Moyer, Callum Keown, Rupert Steiner