(GERMANY OUT) White cows in a field, Connemara County Galway, Ireland

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Stocks edge higher as investors shrug off an uptick in oil prices

Stocks built on yesterday’s gains in spite of the ongoing conflict in Iran. A rise in oil propelled energy stocks higher.

Tasha Matsumoto

23h

The S&P 500, Nasdaq 100, and Russell 2000 built on yesterday’s gains despite an advance in crude oil. Energy was the best-performing sector, followed by consumer discretionary.

Healthcare fared the worst as the sector was dragged down by Eli Lilly, whose shares fell after it received its only sell rating as HSBC downgraded the stock, citing a smaller market for weight-loss drugs.

Bitcoin continued to remain stable after logging eight consecutive days of gains, its longest winning streak in four years.

The Federal Reserve began its two-day policy meeting, where prediction markets indicate that it’s seen as a near lock to keep its policy rate unchanged.

(Event contracts are offered through Robinhood Derivatives, LLC — probabilities referenced or sourced from KalshiEx LLC or ForecastEx LLC.)

Stocks that moved higher:

Uber and Lyft rose on their expanded robotaxi partnerships with Nvidia.
Lemonade soared after Morgan Stanley upgraded the stock to “overweight,” with a new price target of $85 (from $80).
Delta Air Lines and American Airlines rose after boosting their Q1 sales guidance, sending United Airlines and Southwest Airlines higher as well.
Frontier Airlines gained after saying revenue per mile would increase by a percentage in the mid-teens, compared to its earlier guidance of more than 10%.
Space, drone, and satellite stocks Rocket Lab, Planet Labs, AST SpaceMobile, Redwire, and Intuitive Machines continued their Iran war-driven rally.
Oklo ticked higher after announcing regulatory advances on its Aurora reactor. Additionally, its Idaho facility has been approved to begin commercial isotope sales.

Stocks that moved lower:

Nebius sank after announcing that it aims to raise $3.75 billion in a convertible loan offering.
Beyond Meat slipped after delaying its annual report.
Boeing dipped after pushing back its goal of positive margins for its commercial jet division to next year.
Cango, a former automotive service turned bitcoin miner, sank after selling 4,451 bitcoin to pay down long-term debt and “reduce the overall finance leverage and strengthen the balance sheet.”

Matt Phillips

Hard
hats
and
hyperscalers

If you build it, gains will come

Luke Kawa

Federal Reserve leaves rates unchanged; dot plot still signals lower rates in the cards for 2026

A relatively dovish reaction function from the US central bank.

Fed Chair Jerome Powell Holds An News Conference On Interest Rates

Matt Phillips2h

Constellation, Talen, and NRG surge as BNP analysts see “golden (AI)ge” ahead for them

Power producers Talen Energy, Constellation Energy, and NRG jumped Wednesday, benefiting in part from a rosy write-up by analysts at BNP Paribas, who launched coverage of all three at “outperform” and argued that the AI energy trade — a big AI-related winner in recent years that has lagged a bit recently — is due for a second wind.

That view was in a broad note on the independent power producer segment of utilities industry that the analysts published Wednesday, titled “The Golden (AI)ge of IPPs.”

Here’s the gist of it:

US independent power producers (IPPs) have lagged the AI basket for 6+ months, after garnering much attention in 2023-1H25. Investors are caught up in the minutia of perceived headwinds: underwhelming pace of power purchase agreement deals, distributed behind-the-meter solutions stealing the ‘time-to-power’ edge, pressure for data centers to bring generation and not tighten the grid, etc.

And yet, as we demonstrate, despite all this noise, the wave of rising load is at the cusp of an acceleration that will nonetheless overwhelm new supply—well into the 2030s, in our view. Hop on or risk missing the resurgent AI trade this decade.

BNP’s price targets for the stocks — Constellation ($407), NRG ($232) and Talen ($549) — implied gains of 32%, 50%, and 68% respectively. (Though today’s gains would reduce those potential upside targets somewhat for new buyers.)

US independent power producers (IPPs) have lagged the AI basket for 6+ months, after garnering much attention in 2023-1H25. Investors are caught up in the minutia of perceived headwinds: underwhelming pace of power purchase agreement deals, distributed behind-the-meter solutions stealing the ‘time-to-power’ edge, pressure for data centers to bring generation and not tighten the grid, etc.

And yet, as we demonstrate, despite all this noise, the wave of rising load is at the cusp of an acceleration that will nonetheless overwhelm new supply—well into the 2030s, in our view. Hop on or risk missing the resurgent AI trade this decade.

Luke Kawa5h

Chinese tech giants rally after hiking AI prices

ADRs of Alibaba and Baidu are gaining in early trading after the Chinese tech giants announced AI price hikes.

Alibaba said that it’s hiking the price of its AI chips by up to 34% and raising the cost of cloud storage by 30%, with Baidu planning on increasing AI cloud product prices by up to 30%.

Tech companies in China and the US are aiming to show that AI is not just a technological breakthrough but also a core tool for moneymaking. And, well, raising the price of what you sell is one of the most basic ways to make more money!

“Baidu’s decision to raise AI cloud product prices by as much as 30%, according to Bloomberg News, is a positive development that signals a shift toward monetization rather than price competition,” wrote Bloomberg Intelligence analysts Robert Lea and Jasmine Lyu. “Baidu’s move mirrors similar steps by Tencent, Alibaba, and Zhipu, catalyzed by surging demand for agentic AI following the launch of OpenClaw.”

J. Edward Moreno

Optics stocks rise as executives signal more AI-related demand

Optics companies have rallied this year on expectations of higher demand for the components they make.