I. Market Overview — PPI Surprise, AI Strength, “9/11 Effect” Backstop
Pre-open, August PPI surprised sharply to the downside: +2.6% y/y (prior 3.3%, cons. 3.3%), -0.1% m/m (cons. +0.3%, prior revised to +0.9%); core PPI -0.1% m/m (cons. +0.3%, prior +0.9%). U.S. yields fell, but equities reacted cautiously—signals of “slowing but not breaking” growth with disinflation reinforced expectations for three 25 bp Fed cuts by year-end (with another cut around September 2026; terminal rate a touch below 3%). The S&P 500 finished slightly higher while the Dow and Nasdaq eased on heavyweight drags. Notably, on the 9/11 calendar node, large institutions appeared intent on politically correct support, and with AI remaining active, sentiment did not cool materially despite the PPI jolt.
II. Sectors & Flows — AI Dominates, Non-AI Splinters
The AI leadership was unambiguous: compute, cloud, and semis led—TSMC (+3.9%), Broadcom (+10%), NVIDIA (+3.85%) were firm. Outside AI, consumer (Apple), select regionals, and ad-tech (TTD) lagged as flows concentrated into AI.
Key tension: economists cautioned a single PPI print is noisy and not a reliable CPI signal; CPI swaps imply 2.91% y/y for August (slightly above consensus). Caution remains into tomorrow’s CPI. Under a “9/11 backstop”, an in-line CPI likely extends a drift higher; a mild upside surprise could still be contained.
III. Single-Name Focus — AI Orders Ignite, While Misses & Sell-downs Emerge
AI chain (orders + prints as catalysts)
- Oracle (ORCL): +43% intraday on the headline $455bn RPO (≈3x q/q), including $300bn tied to OpenAI (from 2027). While revenue/EPS missed, the market fixated on AI cloud demand. Caveat: long-dated framework agreements face macro/budget risk; cash conversion is uncertain.
- TSMC (TSM): August revenue NT$335.7bn (+33.8% y/y, +3.9% m/m); Jan–Aug NT$2.43tn (+37.1% y/y). Reaffirms accelerated AI infra build-out and chip demand.
- Broadcom (AVGO): ~+10% after CEO Hock Tan tied comp to a FY2030 AI revenue up to $120bn target and argued hyperscalers will dominate custom silicon while enterprises rely on general-purpose GPUs. Read-through: AVGO aims to capture the “overflow” NVDA cannot fulfill; NVDA (mkt-cap ~4T) still anchors AI compute (NVDA +3.85%).
- Dell (DELL): Goldman raised 2029 AI server TAM to $580bn (from $386bn; 38% CAGR); DELL’s share in tier-2 cloud rose to 46%. Reality check: recent results flagged thin margins amid aggressive pricing; heat may outpace fundamentals near term.
Other movers
- “Covid” (ticker not specified; AI-compute theme): gapped +17% then faded to the 50-DMA. Tactical: keep powder dry given insider-sale/ATM risk; trimmed to 5%, bid around $90 for pullbacks.
- MBIS: Post-spike consolidation; launched $1bn common + $2bn converts (2030/2032). Financing seen as necessary; price action resilient—watch capital deployment.
- VRT: +9%, a miss for would-be dip-buyers—underscores AI small-cap rotation.
- Synopsys (SNPS): -36% on broad Q3 miss & cut; IP revenue -7.7% y/y, Q4 EPS guide $2.76–2.80 vs $4.50e. Pressured by export controls and foundry softness. Long-term scarcity merits 3–5y accumulation, but near-term sentiment must reset.
- KRA (implied nuclear/VR theme): +9% as AI-infra second-derivative trade.
Financials & Consumer: outflows
- UPST: weaker on hedging flows (noted $1.27m put buy) and risk-off rotation (gold bid; financials sold). Tested then reclaimed the 200-DMA; cyclical cuts still favor the AI-lending model medium term—use weakness judiciously.
- Amazon (AMZN): robotaxi launch in Las Vegas and consumer VR work surfaced, but stock fell—capital rotation dilutes “punch Tesla, kick Meta” narrative.
- The Trade Desk (TTD): sold hard as Amazon + Netflix ad tie-up lets buyers access Netflix via Amazon’s DSP, blunting TTD’s “independent DSP” moat; MS cut to Equal-weight, PT to $50. -61% YTD, now back to 2022 troughs—structurally sound balance sheet, but fundamental/flow repair takes time.
- Apple (AAPL): post-event supply met sellers (“no AI, no index put”).
IV. Outlook — AI Leads; Watch CPI and the 9/11 Calendar Effect
The core near-term dialectic is “rate-cut expectations” vs “AI growth”.
- Near term: 9/11 optics + AI order tapes support the market. If CPI lands in-line (or modestly above), indices likely grind higher; a hot print risks a sentiment snap-back, though today’s “safety net” may limit downside.
- Longer term: AI remains the highest-conviction theme (NVDA, AVGO, ORCL), but beware concept froth (e.g., high growth/low margin hardware, long-dated framework deals).
Tactics: Hold AI core (compute & cloud), monitor order-to-revenue conversion; treat SNPS/UPST as tactical trades with sizing discipline; be cautious chasing consumer/financial laggards; selectively add defensive utilities on dips.
Bottom line: Sept 10 epitomized data noise + AI euphoria + calendar backstops. Anchor to AI leaders, avoid earnings landmines, and manage near-term sentiment risk to navigate the chop.
