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3M Beats, but the Drama Is Elsewhere
3:04 pm — MMM -2.15%
By Seth Jayson
Team Rule Breakers
Earnings day for the Post-it people, and 3M’s (MMM 2.50%) quarter was pretty much what you’d expect from a 120-year-old company in the middle of a self-improvement project — profits better than expected, revenue a hair short. They beat on the bottom line by a decent margin, reiterated their full-year numbers, and the stock didn’t do much. Meanwhile, the interesting stuff is happening in the background: a fire-and-rescue joint venture, an optical connectivity bet on AI data centers, and PFAS litigation that just keeps on keeping on.
UPS Bets Big on Your Buyer’s Remorse
2:43 pm
UPS (UPS 0.80%) is deliberately shrinking its Amazon delivery business — cutting volumes by more than 50% in 2026 — while doubling down on returns. Its Happy Returns subsidiary is adding 1,700 locations, bringing its network to 10,000 drop-off points covering 79% of Americans within 5 miles.
- The margin math: Returns are more profitable than cheap e-commerce deliveries because aggregation lets UPS consolidate many items into single shipments — fewer stops, better economics.
- The competition: FedEx (FDX +0.91%) launched its own rival returns service in March 2025 with 3,000+ locations. Amazon’s returns network already tops 10,000 points. The race is on.
Alaska Air Faces Turbulence, But Remains on Course
1:10 pm — ALK -3.1%
By Lou Whiteman
Team Hidden Gems
Alaska Air Group (ALK 4.92%) is currently flying through some rough air. But turbulence is to be expected in aviation, and the good news for investors is that Alaska remains on course to reach its destination.
Alaska lost $1.68 per share in its most recent quarter, in line with expectations, on revenue of $3.3 billion. But the stock appears headed for a down day post-earnings due to higher-than-expected costs and the company's decision to suspend guidance amid uncertainty about fuel prices. Alaska had other issues outside its control that impacted earnings, namely flooding in Hawaii and civil unrest in Mexico.
NYSE: ALK
Key Data Points
Today's Lunchtime News
1:15 pm -- TSCO -10.5%
Tractor Supply (TSCO 12.68%) shares fell 10% today after Q1 2026 companion animal sales dropped 11%. Consumers are pulling back on discretionary pet spending as inflation worries persist. Overall comparable sales grew just 0.5%, trailing the 1.6% Wall Street expected.
- Mixed segment results: Four of five product categories posted positive performance, with double-digit growth in livestock and seasonal & recreation. The pet unit, which spans treats, collars, chew toys, and services was the lone drag.
- Guidance held: CEO Hal Lawton said the company is taking decisive action to fix the companion animal segment. Tractor Supply reiterated its fiscal 2026 net income forecast of $1.11 billion to $1.17 billion.
Carriers File for Massive Tariff Refunds
12:25 pm -- UPS -1.1%, FDX flat
United Parcel Service (UPS 0.80%) and FedEx (FDX +0.91%) have begun filing for potentially billions in tariff refunds following a February Supreme Court ruling that struck down duties imposed under the International Emergency Economic Powers Act. U.S. Customs and Border Protection (CBP) opened its "CAPE" portal Monday to process claims for roughly $166 billion in invalidated levies. Both carriers, along with DHL, are automatically filing on behalf of customers where they acted as the importer of record. While the process provides a significant administrative win for the logistics giants, actual cash may take up to three months to reach the shippers who originally bore the costs.
- High-Stakes Compliance: President Trump recently noted he would "remember" companies that fail to seek these refunds, adding a layer of political pressure to the technical filing process.
- Limited Scope: The current refund window applies only to IEEPA-specific tariffs, leaving Section 232 and Section 301 duties — affecting steel and many Chinese goods — firmly in place for now.
UPS performance
FDX performance
Microsoft Cuts Xbox Game Pass Prices
12:10 pm — MSFT +1.9%
Microsoft (MSFT +1.45%) is slashing Xbox Game Pass Ultimate prices from $29.99 to $22.99 per month, reversing a steep October hike. Under new Gaming CEO Asha Sharma, the tech giant is pivoting toward user acquisition as hardware competitors like Sony (SONY 2.61%) and Nintendo (NTDOY 2.02%) raise prices amid tariff pressures and memory shortages. However, the discount comes with a major trade-off: "Call of Duty" titles will no longer debut on the service on launch day, arriving instead about a year later. This shift signals a tactical retreat from the "day-one" subscription model for Microsoft’s most expensive acquisitions in favor of protecting high-margin retail sales.
- Divergent Hardware Strategies: While Microsoft lowers service barriers, Sony recently hiked the five-year-old PlayStation 5 by $100, creating a massive valuation gap between the two ecosystems.
- Margin Preservation Play: By delaying "Call of Duty" on Game Pass, Microsoft aims to capture premium $70–$80 individual sales from its largest franchise before shifting players into its recurring revenue funnel.
NASDAQ: MSFT
Key Data Points
Tesla Fires Back at Chinese EV Rivals
11:15 am — TSLA -0.3%
Tesla (TSLA 1.58%) officially registered its generative AI-powered voice assistant with Shanghai authorities Tuesday, a critical regulatory step to enhance its competitiveness in the world’s largest auto market. The filing covers one of 158 AI applications approved by Chinese regulators to ensure local data compliance. To better appeal to tech-centric consumers, Tesla is reportedly integrating ByteDance’s Doubao and DeepSeek’s conversational models — hosted on the Volcano Engine cloud — rather than its U.S.-based Grok AI. This localization push is vital as Tesla’s Full Self-Driving software still awaits full delivery approval in China, leaving the automaker reliant on infotainment and "intelligent assistant" features to fend off aggressive local rivals like BYD (BYDDF 1.77%).
- Strategic Local Partnerships: By leveraging ByteDance and DeepSeek, Tesla bypasses strict cross-border data transfer rules that have historically delayed the rollout of its most advanced software features in China.
- FSD Regulatory Update: Although full regulatory approval remains pending, Tesla recently concluded an "Intelligent Assisted Driving" trial in China, signaling a phased approach to monetizing its software stack abroad.
Can New Codex Labs Beat Anthropic?
11:10 am
OpenAI is enlisting global consulting powerhouses like Accenture (ACN 0.41%) and Cognizant (CTSH +0.68%) to accelerate the corporate rollout of Codex, its AI software development tool. This strategic pivot includes the launch of Codex Labs, an initiative embedding specialists directly within client organizations to integrate AI into legacy workflows. By focusing resources on core products and scaling back experimental projects like Sora, OpenAI aims to defend its enterprise territory against rising competition from Anthropic and big tech rivals. Weekly active developers using Codex recently surged to 4 million, up 33% in just one month, signaling massive momentum in AI-automated coding.
- Strategic Resource Realignment: OpenAI is reportedly shuttering smaller initiatives to prioritize high-margin enterprise tools, a move that mirror's Microsoft's (MSFT +1.45%) focus on commercial utility over novelty.
- Global Integration Network: Additional partners including Infosys (INFY 0.42%) and CGI (GIB +0.50%) provide the boots-on-the-ground support necessary to displace manual coding in massive, complex software ecosystems.
Amazon Plugs In 75 New EV Rigs
10:15 am — AMZN +1.9%
Amazon (AMZN +0.49%) is accelerating its freight decarbonization by adding 75 heavy-duty electric trucks from Swedish startup Einride to its Amazon Relay middle-mile network. These rigs are projected to cover 3 million miles annually, hauling loads between fulfillment centers and sort hubs. While Amazon already partners with Rivian (RIVN +1.92%) and Volvo (VLVLY 1.33%) for delivery vans and port trucks, this expansion targets the difficult "middle-mile" segment of the supply chain. The move reinforces Amazon’s goal to build an end-to-end green logistics powerhouse that rivals traditional carriers.
- IPO On The Horizon: Einride plans to go public via a merger with Legato Merger Corp. III (LEGT 0.04%) by mid-2026, a deal expected to raise $300 million following this major Amazon validation.
- Autonomous Ambitions: Beyond manual EVs, Einride is securing U.S. regulatory approvals for driverless operations, signaling a future where Amazon’s proprietary AI software manages fully autonomous freight corridors.
NASDAQ: AMZN
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Opening Bell
9:35 am
The Dow climbed 270 points Tuesday following President Trump’s optimistic CNBC interview regarding a potential "great deal" with Iran. While the S&P 500 edged up 0.2%, energy markets remained volatile as West Texas Intermediate crude dipped below $90 per barrel. Despite the geopolitical tension, UnitedHealth (UNH +7.41%) provided a significant boost to the blue-chip index, surging 7% after delivering a beat-and-raise quarterly report.
- Profit Engine Ignites: UnitedHealth’s earnings beat and improved guidance suggest the insurance titan is navigating rising costs more effectively than analysts anticipated.
- Bullish Horizon Ahead: Some sstrategists maintain a 7,300 price target for the S&P 500 by July, betting on continued economic resilience through the summer.
Market indexes
Top of the Morning
9:45 am -- GE -2.0%
By Morning Show host Bill Barker
GE Aerospace (GE 5.54%) released its first-quarter 2026 earnings report this morning, posting results that exceeded Wall Street estimates and offered a few signals about the broader industrial sector. The company reported adjusted earnings per share of $1.86, clearing consensus analyst estimates of $1.60, representing a 25% year-over-year increase. GAAP revenue reached $12.4 billion, a 25% increase compared to the prior year.
Particularly notable from the report was the volume of incoming demand. Total orders grew 87% year-over-year to $23.0 billion, bringing the company's total Remaining Performance Obligation to $211.3 billion and providing comforting revenue visibility for years ahead.
SpaceX Eyes $1.75T IPO as Space Boom Accelerates
8:05 am
The space economy is reaching escape velocity as global investment surged to a record $7.95 billion in Q1 2026. This "risk-on" appetite is largely fueled by Alphabet (GOOG 1.46%)-backed SpaceX, which begins a three-day analyst tour today at its Texas Starbase to pitch a staggering $1.75 trillion IPO valuation. While SpaceX seeks to set a public benchmark, Amazon (AMZN +0.49%) is aggressively scaling its own "Amazon Leo" constellation, recently announcing an $11.6 billion acquisition of Globalstar (GSAT 0.44%) to bridge the connectivity gap. With 70% of funding concentrated in North America, the sector is rapidly evolving beyond simple communications into high-margin in-space infrastructure and autonomous maritime defense.
- The $90 Payout: Amazon's deal offers Globalstar stockholders $90 per share in cash or stock, a massive win for Apple (AAPL 2.29%) which previously held a 20% stake in the satellite operator.
- Autonomous Alpha: Maritime tech leader Saronic closed a $1.75 billion Series D this quarter, highlighting how defense spending is shifting toward AI-driven autonomous ships and "physical AI" factories.
Netflix: The Streaming Story Is Far From Over
8:00 am -- NFLX +0.20% in pre-market trading
By David Meier
Team Rule Breakers
Netflix (NFLX 2.31%) talked about the long-term opportunity for growth that's still ahead for the company. And it's still huge. That's why the stock remains an excellent long-term investment opportunity for shareholders.
One thing I always appreciate from Netflix's management is how they frame the long-term opportunity. It's about engagement and time spent on their platform. And here's what management said this quarter in their most recent Letter to Shareholders:
"In such a fast-changing industry, and with so many consumer options, we strive to be a "must have service" -- the first place people go for entertainment and the last they cancel. We've come a long way since we started streaming in 2007 (we're now entertaining an audience approaching 1 billion people), but we're also still incredibly small; we account for an estimated ~5% of TV view share globally, and as of the end of 2025 we penetrated less than 45% of our Total Addressable Market (TAM) of broadband households. We're optimistic about the future of entertainment and our long runway for growth, and are focused on three areas to achieve our ambition."
NASDAQ: NFLX
Key Data Points
This Morning's Breakfast News
7:30 am -- UNH +5.89% in pre-market trading
UnitedHealth Group (UNH +7.41%) popped over 5% higher ahead of the opening bell thanks to results showing profits higher than analysts expected, along with revenue ticking higher from $109.58 billion in the prior year to $111.72 billion.
- Higher operating cost ratio noted: The ratio jumped from 12.4% in 2025 to 13.8%, although investors seemed unconcerned as this "reflected incremental investments in people, processes and technology, including artificial intelligence."
- Full-year 2026 profit outlook increased: Thanks to increased government payments for its insurance business and better management of medical costs, the previous guidance of $17.75 per share was increased to more than $18.25.
JPMorgan Takes $1.5T Security Plan to Europe
7:25 am -- JPM +0.12% in pre-market trading
JPMorgan Chase (JPM 0.69%) is taking its massive "Security and Resilience" initiative global, expanding a 10-year, $1.5 trillion investment plan into Europe and the UK. Initially launched to bolster U.S. national security, the program targets critical sectors like defense, quantum computing, and AI to reduce Western reliance on "unpredictable resources." CEO Jamie Dimon's strategy involves matching private capital with urgent infrastructure needs as the transatlantic alliance faces heightened pressure from the ongoing Iran war and lingering energy vulnerabilities. To steer the expansion, the bank is tapping high-level talent, including an advisory council featuring Amazon (AMZN +0.49%) founder Jeff Bezos.
- Strategic Self-Reliance: The initiative aims to help Europe "stand on its own two feet" by facilitating defense spending and securing supply chains without total reliance on the U.S. taxpayer.
- The $10 Billion Anchor: While JPMorgan acts primarily as a facilitator for the $1.5 trillion in total funding, it has committed $10 billion of its own capital to anchor the project's most critical domestic and allied security efforts.
NYSE: JPM
Key Data Points
ICYMI: Monday's Scoreboard
6:30 am -- RSG unchanged in pre-market trading
Republic Services (RSG 1.43%) was the subject of the latest Scoreboard video.
Uber Boosts Lucid Bet to $500M for 35K Taxis
6:00 am -- UBER +0.48%, LCID +2.67% in pre-market trading
Uber (UBER 0.32%) has aggressively ramped up its position in Lucid (LCID +6.44%), nearly tripling its stake to 11.5% as it prepares for a commercial autonomous launch later this year. The ride-hailing giant increased its investment to $500 million to secure 35,000 custom robotaxis, a significant jump from its initial 20,000-vehicle commitment. This "opportunistic" expansion, supported by a fresh $550 million influx from Saudi Arabia's Public Investment Fund, utilizes Nuro's self-driving technology within the Lucid Gravity and upcoming "Midsize" platforms. The news sent Lucid shares up 1.2% in after-hours trading as investors weigh Uber's move against Tesla (TSLA 1.58%), which recently debuted unsupervised rides in Dallas and Houston.
- The Midsize Pivot: Lucid's future sub-$50,000 platform is designed specifically for Uber's network to optimize unit economics and compete with low-cost autonomous rivals.
- Tesla's Counter-Move: While Uber builds its hardware partnerships, Tesla is scaling its own internal software, launching fully driverless Model Y rides in two new Texas cities just days before its Q1 earnings report.
Semiconductor Index Hits All-Time Highs
5:15 am
The Philadelphia Semiconductor Sector Index (SOX) is enjoying its largest rally since 2002, jumping 30% in the past 13 days, as positive earnings momentum and sentiment around AI helps to elevate the sector.
- No cracks appearing in AI demand: Q1 revenue for Taiwan Semiconductor (TSM +0.09%) passed the trillion-dollar threshold in local currency for the first time ever, acting as a positive early barometer ahead of sector giants such as Nvidia (NVDA 1.04%) and Broadcom (AVGO +0.23%).
- Ominous history lesson worth noting: The only time the sector index saw a similar move to a new high was in March 2000, which marked the peak of the dot-com bubble.
Before the Opening Bell
5:00 am
Wall Street is processing a historic changing of the guard at Apple (AAPL 2.29%) after the company announced Tim Cook will transition to Executive Chairman this September, handing the CEO reins to hardware chief John Ternus. The leadership pivot comes at a volatile moment as investors also track a fragile ceasefire between the U.S. and Iran. President Trump signaled it is "highly unlikely" the two-week truce will be extended past Wednesday's deadline, a move that could keep the Strait of Hormuz blocked and maintain Brent crude prices near $120 per barrel. While Apple shares saw a measured response to the succession news, the broader market remains on edge ahead of critical March retail data.
- Continuity at Cupertino: John Ternus, a 25-year veteran and architect of the Mac's silicon transition, is expected to accelerate Apple's push into generative AI and foldable hardware to regain the "world's most valuable firm" title from Nvidia (NVDA 1.04%).
- Energy Supply Shock: The potential expiration of the truce threatens to prolong a jet fuel shortage that has already seen prices double, placing extreme margin pressure on non-hedged carriers like United Airlines (UAL 1.10%).
