Mid-Morning Look: August 26, 2026

Mid-Morning Look

Wednesday, August 26, 2026

U.S. stocks are down slightly, pulling back following a mostly in-line July inflation report, where the PCE core reading of 3.3% was in-line with consensus and the prior month (not rising, but still not heading down to the Fed’s 2% target). GDP data was also in line with growth at 1.5% for Q2 2^nd estimate (but down from the 2.1% last quarter). There were several noteworthy earnings results overnight/this morning with retailer ANF surging on results along with SMTC in semi space, while DY, INTU, JKS, ZM decline on results, but all eyes and attention on tonight where NVDA earnings are expected to impact the AI space, along with software earnings from CRM, CRWD, OKTA and hardware with HPQ, NTNX. Pressure returned to benchmark crude oil prices after steep losses on Tuesday, but have since pared losses. Iranian Foreign Minister Araghchi and Omani counterpart Albusaidi outlined an “interim framework” for a temporary maritime corridor and mine clearance, according to Oman’s news agency. However, Iranian state television clarified that the arrangement does not signal an immediate reopening of the Strait of Hormuz. Post in-line PCE and ahead of big earnings tonight, expect more market “chop” for a third day as summer trading is in full effect.

• U.S. Q2 GDP 2nd Estimate actual 1.5%, in-line with forecast 1.5% and prior 1.5% and +2.1% in the prior quarter, according to the Bureau of Economic Analysis. Personal consumption expenditures PCE) for Q2 +3.4%, annual rate, vs. +3.2% in initial estimate and +0.5% prior. Corporate profits rose at a rate of 8.2%, compared to the 0.5% growth seen in Q1 2026.

• Internet/Social media sector: META agrees to settle claims that platforms harmed children and agrees to pay a maximum of $18B to states as part of deal (about $12.7B to states, with another $5.3B contingent on TikTok and YouTube agreeing to similar terms), while the agreement requires nationwide changes for teen users of Instagram and Facebook. GDDY was downgraded to sell from hold at Wells Fargo saying with Ai overviews now appearing in nearly half of Internet searches, the co needs to lower its prices to stay competitive in this new Ai-first world.
• Defense sector: LHX was downgraded to Hold from Buy at Jefferies in resumption of coverage saying uncertainty is building at L3Harris with a leadership change and unclear path for the Missile Solutions initial public offering; thinks shares are stalled for now. HEI Q3 EPS above consensus while EBITDA of $415M came in well above $378M est. as strong demand across key end markets drove the sales beat, while absorption benefits, favorable mix, and cost control drove stronger margins.

• SEDG +5%; was upgraded to Buy at UBS and raised tgt to $42 saying the co is a key beneficiary of the U.S. FCC ban on new inverter model imports, and they anticipate the ban will create a supply-constrained U.S. market driving both share gains and potential pricing power.
• SMMT +6%; partner Akeso announced positive topline results from the randomized Phase III HARMONi-GI1 study (AK112-309) evaluating ivonescimab plus chemotherapy compared with durvalumab plus chemotherapy; HARMONi-GI1 beat the 1L Btc standard.
• SMTC +9%; after reported Q2 revenue/EPS above consensus  and upbeat guidance with commentary pointing towards a strong FY28E anchored by the company’s Data Center and LoRa subsegments. SMTC sees Q3 EPS $1.02-$1.08 above est. $0.73/revs $405M-$415M vs. est. $359.9M.
• TH +1%; after boosting its FY26 revenue forecast to $435M-$445M from prior $410M-$420M view and said secures new multi-year contract to provide facility and hospitality services for a top five hyperscalers data center development in West Texas.

• DY -8%; as Q2 adj EPS $5.29 vs. est. $4.72 and revs rose 45.6% Y/y to $2.01B vs. est. $1.98B; Q2 net Income rose 18.6% to $115.6M; but guides FY contract revs $7.48B-$7.66B (midpoint below the est. $7.62B); Total Q2 backlog jumped 53.2% to $12.24B.
• INTU -4%; after forecast slower sales growth in the year ahead as it navigates declines in its desktop business/downgraded by Bank America/JPM citing the expansion of the disruption risks confirmed to be extending beyond TurboTax to the Global Business Solutions I.E. QuickBooks business.
• JKS -14%; shares fell after reports Q2 EPS loss (-$0.49) on revs $1.82B, missing the consensus $2.08B and announced that Mr. Xiande Li has resigned as the Chief Executive Officer of the Company, effective August 26, 2026.
• SYRE -11%; after the company’s experimental drug fails to meet threshold for monotherapy development in rheumatoid arthritis.
• ZM -6%; shares fell on mixed results as delivered decent 2Q, with revenue, billings, and Non GAAP EPS above consensus, while Non-GAAP operating margin came in below. FY27 revenue and Non-GAAP operating income guidance came in-line with consensus.