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    3. Wall Street Morning Briefing: CPI and PPI Both Cool Down, S&P Hits New High, SanDisk and Workday Propel Storage and Software, Optical Communication Faces Profit-Taking

    Wall Street Morning Briefing: CPI and PPI Both Cool Down, S&P Hits New High, SanDisk and Workday Propel Storage and Software, Optical Communication Faces Profit-Taking

    By: rootdata|2026/08/14 04:31:00
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    Every Monday to Friday morning, we focus on macroeconomics, US stocks, AI, precious metals, and crude oil, reviewing the market with data and seizing opportunities with trends, produced by PANews.

    Inflation Eases but Long-Term Warnings Persist, Drone Tariffs Take Effect

    Last night, all three major US stock indices rose, with the S&P 500 up 0.65%, setting a new record for closing; the Nasdaq rose 0.81%, and the Dow Jones increased by 0.13%. The gains were heavily concentrated in technology and semiconductors, with limited market breadth, as traders clearly increased their positions in growth stocks amid the narrative of "cooling inflation + falling oil prices."

    July PPI fell from 5.5% in June to 4.7% year-on-year, remaining flat month-on-month, both better than expected. Following the earlier mild CPI, the money market quickly raised the probability of maintaining interest rates in September to around 65%, and the pricing for a full rate hike this year has significantly decreased. The yield on the 10-year US Treasury bond fell about 5 basis points to 4.65%, indicating a clear rebound in risk appetite.

    • Cleveland Fed President Harker stated on Thursday that "we must raise rates now," noting that the recent slowdown in CPI and PPI is insufficient to confirm a trend change, and risks of economic overheating, private credit, and financial bubbles in the AI sector are rising.

    • Former Dallas Fed President and Goldman Sachs Vice Chairman Kaplan called for an open stance, pointing out that inflation and deflation are "intertwined," and unless oil prices are pushed higher by conflicts, "there won't even be a discussion about rate hikes."

    • Bank of America remains the most hawkish, reiterating that there will be three rate hikes this year, the first in September, diverging completely from the market and the "super hawks."

    However, traders need to be wary of a trap: the short end is trading PPI, while the long end is trading fiscal policy. The auction yield for 30-year US Treasury bonds reached 5.216%, the highest since 2001; the issuance yield for 10-year bonds the previous day also hit 4.683%, the highest since 2007.

    Demand for long bonds has not collapsed, but the structure has clearly deteriorated. The indirect bidding ratio for 30-year bonds fell from 77.7% in July to 66.8%, with primary dealers being forced to take on a larger share. This indicates a decline in the willingness of overseas and ultimate investors to absorb, and fiscal supply is demanding a higher term premium.

    Allspring's global fixed income portfolio manager Stanczyk warned that if investors continue to demand higher compensation for inflation and fiscal risks, long-term yields could break above 5% again; Barclays noted that the market's reliance on price-sensitive buyers is increasing, requiring higher yields to absorb supply. Additionally, Fitch maintained the US AA+ rating but warned that the fiscal deficit will widen by 2026 due to tax cuts and tariff refunds, with interest expenses for this fiscal year already reaching $1.17 trillion, a 15% year-on-year increase. The 30-year fixed mortgage rate has risen to 6.69%, the highest since July 2025.

    Crude oil has entered a downward mode, with WTI falling about 2.5%, briefly dipping below $80. The IEA and OPEC have both lowered demand forecasts, and while the situation in Iran remains tense, it has not escalated further; the Houthi drone attack on Saudi Arabia's Jizan refinery only caused a brief spike. CIBC energy trader Rebecca Babin believes that it currently resembles buyers temporarily halting their chase for higher prices rather than a genuine shift to bearish; Bank of America also cautioned that unless geopolitical conditions improve, a rapid decline in oil prices is unlikely, and if inventories run out, volatility will sharply increase. The diesel crack spread is approaching $100 per barrel, and the refined oil market remains extremely tight.

    Trump signed a proclamation imposing tariffs of 10% to 100% on imported drones and components, citing national security: 100% on those weighing over 25 kg or with highly sensitive specifications such as thermal imaging, 25% on smaller specifications, 15% for the EU, Japan, and South Korea, and 10% for the UK, with the main tax rate taking effect 21 days later.

    Internal Redistribution in AI, Storage and Software Surge, Optical Communication Faces Sell-Off

    Last night, storage and AI application software became the strongest sectors, while optical communication and some hardware faced profit-taking.

    The biggest narrative driver in US stocks came from storage giant SanDisk, which during its 2026 Investor Day projected that the total addressable market (TAM) for enterprise data center flash memory would reach 1.2ZB by 2030, with mid-to-high double-digit revenue growth from fiscal years 2028-2030, a non-GAAP gross margin of about 80%, and an adjusted free cash flow profit margin of about 50%. The company also promised to return 100% of remaining cash after business investments to shareholders, with long-term contracts covering about two-thirds of shipments for fiscal year 2028, leading the market to reprice NAND from a cyclical commodity to AI inference infrastructure.

    SanDisk surged over 18% at one point, closing up 13.67%, boosting Western Digital by 7.31%, SK Hynix by 7.29%, Seagate by 4.91%, and Micron by 4.23%, with the Roundhill Storage ETF rising 3.89%. Meta announced its membership in the High Bandwidth Flash Memory Open Standard Alliance, further confirming that the industry ecosystem is forming.

    The AI software sector also saw event-driven gains, with Workday soaring 30% at one point due to news of negotiations for acquisition by private equity giant Silver Lake, closing up 17.78%. Workday had previously been a typical victim under the narrative of "AI disrupting SaaS," having fallen 18% this year, with co-founder Aneel Bhusri firmly countering that "no amount of Vibe Coding can produce an HR system."

    However, there was significant internal differentiation in AI hardware, with the optical communication sector that had surged the previous day collectively selling off, Coherent down 7.99%, AAOI down 5.79%, Lumentum down 5.58%, and Corning down 5.32%; Cisco, despite reporting record Q4 revenue of $17.3 billion and EPS of $1.22, both exceeding expectations, saw its stock price drop 8.40%, as market concerns over profit margins overshadowed the results; Cerebras fell 18% at one point due to quarterly revenue missing expectations.

    At the AI model level, Google released a stronger and cheaper Gemini 3.7 Flash model, targeting programming and complex tasks, but the market remains concerned about the delayed release of its flagship model, Gemini 3.5 Pro. OpenAI continues to be at the center of the IPO narrative, with its annual revenue surpassing $40 billion, roughly doubling by the end of 2025, but the chief revenue officer left less than a year after joining, becoming the second core executive to depart this week, casting a shadow of governance and execution risk over the potential IPO. Competitor Anthropic reportedly has annual revenue exceeding $47 billion and may rush to IPO this fall. While the financing window for the AI industry has opened, investors will also scrutinize revenue quality, loss scale, computing costs, and management stability more rigorously.

    Specific Project Actions and Stock Price Fluctuations:

    • SanDisk closed up 13.67%: The long-term guidance from Investor Day ignited the AI inference storage logic, surging nearly 18% at one point. Related storage sectors surged: Western Digital up 7.31%, SK Hynix up 7.29%, Seagate up 4.91%, Micron up 4.23%, and Roundhill Storage ETF (DRAM) up 3.89%.

    • Workday closed up 17.78%, soaring 30% at one point: Reuters reported that private equity giant Silver Lake has been in negotiations for months to acquire this enterprise software company. The AI application software sector collectively surged: Cloudflare up 6.22%, Palantir up 4.66%, Adobe up 4.54%, ServiceNow up 4.16%, and iShares Technology Software ETF up over 3%.

    • Cisco closed down 8.40%: Q4 revenue of $17.3 billion, up 18% year-on-year, and EPS of $1.22, up 23% year-on-year, both exceeded expectations, with AI infrastructure orders reaching $4 billion in a single quarter, but the market expressed concerns about profit margin prospects, and optimistic revenue expectations failed to meet investors' high hopes.

    • Optical communication fell, with the previously surging Coherent down 7.99%, AAOI down 5.79%, Lumentum down 5.58%, and Corning down 5.32%.

    • SpaceX retraced, down 3.33%: Documents show that as of June 30, Musk held approximately 48.4% of passive equity in SpaceX; the Canada Pension Plan Investment Board disclosed holding 100,000 shares of SpaceX, and the Ontario Teachers' Pension Plan held about 50.7 million shares, valued at approximately $8.7 billion.

    • Applied Materials fell 2.48%, continuing to drop over 5% after hours: Q3 revenue of $9.12 billion, up 25% year-on-year, and adjusted EPS of $3.50 exceeded expectations, with Q4 guidance also better than expected, and the CFO emphasized strong demand for DRAM, advanced foundry, and advanced packaging.

    • Reddit closed up 3.04%, surging over 12% after hours; S&P Dow Jones Indices announced that Reddit will officially be included in the S&P 500 index before the market opens on August 18. Since its listing in March 2024, Reddit has seen revenue growth exceeding 60% for eight consecutive quarters and has reached multi-million dollar AI data licensing agreements with OpenAI and Google. However, due to investor expectations for more AI data transactions, its stock price had previously accumulated a decline of about 31% this year.

    • JD.com fell 7.31% after earnings, with Chinese concept stocks overall under pressure, the Nasdaq Golden Dragon China Index down 1.84%, Pinduoduo down 5.46%, and Alibaba down 2.44%; however, Global Data rose 6.20%, and Tencent Music rose 2.36%.

    • Tesla rose 3.8%, leading the tech giants: Meta up 2.78%, Apple up 1.00%, Microsoft up 0.90%, Nvidia up 0.54%, Google up about 0.46%, and Amazon down 0.80%.

    What to Watch Next:

    • August 14, 20:30 US July Retail Sales: If retail sales exceed expectations, the market will re-trade the narrative of "consumption not collapsing, inflation resilient," which may lead to a rebound in US Treasury yields, putting pressure on growth stock valuations; if the data shows significant weakness, it may strengthen expectations for the Fed to pause, but could also raise concerns about "the economy is deteriorating," benefiting bonds and defensive stocks while suppressing cyclical and consumer stocks.

    • August 14, 22:00 US Michigan University Consumer Sentiment Index preliminary value and inflation expectations: Traders will closely monitor one-year and long-term inflation expectations. If inflation expectations continue to decline, it will support the "Fed pausing in September" trade; if expectations rebound, especially in the context of oil prices and tariffs, hawkish officials like Harker will regain market pricing for rate hikes.

    • August 18 Reddit officially included in the S&P 500 index: Reddit will enter the S&P 500 index before the market opens on August 18, and passive buying from index funds may provide short-term technical support. The market will then test whether its AI data licensing revenue can continue to expand; otherwise, the gains after being included in the index may turn into a profit-taking window.

    -- Price

    --

    This content is provided for general informational purposes only and doesn't constitute financial, investment, legal, or tax advice. Any events, rewards, online promotions, or related information mentioned herein should not be considered a recommendation, solicitation, or invitation to purchase, sell, trade, or otherwise deal in any crypto assets. Crypto assets are highly volatile and may result in loss. The availability of WEEX services, products, and related events may vary by region. You are responsible for ensuring that your participation is in accordance with applicable local laws and regulations.

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