🚨 Intel's New CEO

Good afternoon! Davis Lu just learned the hard way that coding yourself a kill switch is a bad career move. The 55-year-old software developer planted malicious code in the event he was fired at Eaton Corporation that wiped files and locked out thousands of employees in September 2019. The malware, creatively named "Hakai" (Japanese for destruction), caused hundreds of thousands in damages and left the company scrambling. Turns out, revenge isn’t so sweet when it comes with felony charges.

Lu admitted to planting the code but still pleaded not guilty—bold strategy, but it didn’t pay off. A federal jury found him guilty of intentionally damaging a protected computer, and now Lu faces up to 10 years in prison

MARKETS

• Stocks climbed Wednesday after a cooler-than-expected inflation report gave tech shares a boost. The S&P 500 rose 0.7% and the Nasdaq gained 1.2%, with beaten-down tech stocks leading the way as investors took comfort in signs that inflation may be easing.

• Despite the gains, the Nasdaq is still down over 12% from its all-time high, and the S&P 500 remains stuck below its key 200-day moving average. Markets remain under pressure from trade tensions with Canada and broader concerns about slowing U.S. growth.

STOCKS
Winners & Losers

What’s up 📈

• Groupon skyrocketed 43.09% after the online marketplace company’s full-year revenue forecast came in above Wall Street expectations. Groupon now expects revenue between $493 million and $500 million, compared to the $491.5 million expected by analysts. ($GRPN)

• Tesla climbed 7.59% after President Trump said he plans to buy a Tesla and Morgan Stanley analysts told investors to buy the dip. Tesla had dropped over 40% year to date before Wednesday's bounce. ($TSLA)

• Nvidia jumped 6.43% as the chipmaker rebounded after a rough month. The stock has slumped about 8% in March and is down roughly 14% for the year. ($NVDA)

• Intel rose 4.55% following reports that TSMC is proposing a joint venture with Nvidia, AMD, and Broadcom to run Intel’s foundry business. Nvidia, AMD, and Broadcom also gained on the news. ($INTC)

• Crocs gained 3.62% after Loop Capital upgraded the stock to buy, saying its low valuation provides an attractive entry point for investors. ($CROX)

• HubSpot added 3.45% after Barclays upgraded the marketing and customer service platform to overweight, citing AI as a new monetization opportunity. ($HUBS)

What’s down 📉

• iRobot plummeted 35.66% after the company said it has "substantial doubt" about its ability to continue operations. The maker of Roomba vacuums is facing financial strain following a failed acquisition by Amazon. ($IRBT)

• Puma plunged 17.24% after the sneaker brand's management warned of slower sales ahead due to tariff pressures. ($PUMSY)

• Sunrun slid 5.19% after Jefferies downgraded the solar company to hold from buy, citing weakness in the solar sector and uncertainty around the Inflation Reduction Act. ($RUN)

• Novo Nordisk dropped 4.25% after Roche announced a $5.3 billion deal to develop Zealand Pharma’s new weight-loss drug, creating more competition for Novo's blockbuster products. ($NVO)

• Target slipped 4.86% as the broader field of consumer defensive stocks declined. Peer Walmart also dropped 2.56% after reportedly asking Chinese suppliers to lower prices, drawing backlash from Chinese authorities. ($TGT), ($WMT)

• PepsiCo fell 2.73% after Jefferies downgraded the stock to hold, citing limited growth ahead in its U.S. beverage and snack businesses. ($PEP)

CHIPS
Intel Names Lip-Bu Tan as CEO to Lead Its Turnaround

Intel’s handing the keys to Lip-Bu Tan, a chip industry heavyweight, hoping he can pull off the kind of comeback that Wall Street loves. Tan, the former CEO of Cadence Design Systems, will officially take over on March 18—Intel’s stock jumped 10.4% after hours on the news.

The Situation

Intel has been floundering for years, losing ground to rivals like Nvidia and AMD in the AI chip race while struggling with product delays and manufacturing issues. Its stock is down over 50% in the last 12 months, and the company just laid off 15,000 employees in a desperate bid to cut costs. Outgoing CEO Pat Gelsinger’s plan to turn Intel into a contract chipmaker (like Taiwan’s TSMC) hasn’t gone anywhere, and Intel’s core business of making PC and server chips is shrinking fast.

Why Tan?

Tan knows his way around the semiconductor world. At Cadence, he doubled revenue and boosted margins by focusing on customer needs and design innovation. Cadence’s software powers the design of chips used by Intel’s biggest competitors, so Tan knows exactly what he’s up against. He also sat on Intel’s board until last August, so he’s not coming in cold.

The Game Plan: In a memo to employees, Tan laid it out clearly: Intel needs to get better at making chips and become a serious player in the contract manufacturing game. That means fixing Intel’s production problems, rebuilding customer relationships, and figuring out how to make money from AI chips before Nvidia and AMD leave it completely in the dust.

Investors are already backing Tan to pull off a turnaround—Bernstein analyst Stacy Rasgon said he’s “the best possible choice.” But if Tan can’t get Intel’s AI and foundry business off the ground, pressure to split the company could grow. Qualcomm and Broadcom have reportedly sniffed around Intel’s manufacturing business, and the idea of a breakup isn’t off the table.

Win or Break: Tan has the experience, but the stakes are massive. If he delivers, Intel could climb back into the AI race and reclaim its status as a semiconductor giant. If not, Intel’s future could be measured in pieces.

NEWS
Market Movements

• 💸 U.S. deficit passes $1 trillion for fiscal 2025: The U.S. budget deficit surpassed $1 trillion through the first five months of the fiscal year, up 38% from the same period in 2024. President Trump’s Department of Government Efficiency, led by Elon Musk, has cut over 62,000 government jobs but has yet to show a financial impact ($DOGE).

• 🚫 FTC reverses course on Amazon case delay: The FTC said it will meet the deadlines for its Amazon Prime deceptive practices case, reversing an earlier request for a delay due to resource constraints. The reversal follows pressure from the Trump administration’s cost-cutting measures, which have trimmed the FTC's workforce ($AMZN).

• 📉 iRobot faces survival concerns: Shares of iRobot dropped over 30% after the Roomba maker said there is "substantial doubt" about its ability to continue operating. The company has struggled since Amazon abandoned its $1.7 billion acquisition last year, and mounting debt and weak sales have added pressure ($IRBT).

• 📱🍔 McDonald's taps new exec to boost growth: McDonald's appointed Jill McDonald as its first chief restaurant experience officer as part of a restructuring aimed at accelerating menu innovation and improving efficiency. The company plans to expand to 50,000 locations by 2027 while trying to regain momentum amid slowing sales ($MCD).

• 💾 TSMC explores Intel joint venture: Taiwan Semiconductor has proposed a joint venture with Nvidia, AMD, Broadcom, and Qualcomm to operate Intel’s foundry division, with TSMC taking a stake of no more than 50%. The talks, driven by U.S. government pressure, aim to revive Intel’s struggling business ($TSM, $NVDA, $AMD, $AVGO, $QCOM, $INTC).

• 🤖 Google unveils new AI model: Google launched Gemma 3, its latest AI model optimized for single-GPU performance, outperforming Meta's Llama and OpenAI. The model supports over 35 languages and can analyze text, images, and short videos ($GOOGL, $META).

• 🌏 Salesforce invests in Singapore: Salesforce will invest $1B in Singapore over the next five years to boost AI innovation for Agentforce, its AI platform, and expand its digital transformation efforts ($CRM).

CPI
Inflation Eases… For Now

Inflation finally gave Americans a breather in February, with the consumer price index (CPI) rising just 0.2%—a marked slowdown from January’s 0.5% jump. Core CPI (which strips out food and energy) also came in at 0.2%, undercutting expectations and sparking cautious optimism on Wall Street. But before you start celebrating, remember: this is a short-term win. President Trump’s recent tariffs on Chinese, Canadian, and Mexican imports are looming large, and economists are already warning that rising trade costs could push prices higher in the months ahead.

Calm Before the Tariff Storm

Trump’s economic team insists that any tariff-driven price increases will be “manageable,” but Wall Street isn’t buying it. JPMorgan’s Elyse Ausenbaugh summed it up bluntly: “Policy uncertainty is in the driver’s seat right now.” Markets are jittery for a reason—if tariffs send inflation higher while the economy slows, the Fed could be forced into an awkward position. Goldman Sachs already raised its core inflation forecast for Q4 to 2.9%, signaling that price pressures aren’t disappearing anytime soon.

Consumers Are Starting to Crack

Even with inflation slowing, household finances are looking shaky. The New York Fed reported that 27% of Americans expect their financial situation to worsen this year—the highest level since late 2023. Credit card debt hit a record $5 trillion in January, and retailers are feeling the squeeze. Kohl’s stock tanked 20% this week after slashing its revenue outlook, while Dick’s Sporting Goods echoed similar concerns about fading consumer demand. Slower spending might help curb inflation, but it’s not exactly a recipe for growth.

What’s Next? The Fed isn’t likely to cut rates at next week’s meeting—core inflation is still running at 3.1%, well above the 2% target. But if tariffs drive prices higher while consumer spending softens, the central bank could be in for a headache. For now, Wall Street is taking the inflation dip as a win. The S&P 500 opened higher on the news—but with tariffs poised to hit consumers where it hurts, this victory lap might be short-lived.

Calendar
On The Horizon

Tomorrow

With CPI in the rearview mirror, it’s time for the Producer Price Index (PPI) to take the spotlight. While PPI isn’t as market-moving as CPI, it still gives the Fed a pulse check on inflation at the wholesale level. Also on deck is the weekly jobless claims report, which has become a key focus for Wall Street as jitters about the labor market grow louder.

Earnings season is perking up, too. Tomorrow brings updates from some big names like Dollar General ($DG), DocuSign ($DOCU), Ulta Beauty ($ULTA), and Semtech ($SMTC). After a sluggish start to the week, it’s about time for some action.

NEWS
The Daily Rundown

• 🏛️ US Department of Education plans 50% workforce cut: The Trump administration plans to reduce the Department of Education's workforce by half as part of efforts to streamline the department and improve efficiency. Critics warn the cuts could disrupt student services and civil rights enforcement, while supporters argue it will reduce bureaucracy and improve accountability.

• ✈️ Major US airlines cut revenue forecasts: Delta and American Airlines lowered their Q1 2025 revenue outlooks, blaming sluggish domestic leisure demand and fallout from a January incident. Delta now expects 3%–4% growth, down from an earlier 7%–9% projection, while American expects flat revenue. Both airlines are adjusting strategies to handle the weaker demand.

• 🏗️ Trump threatens double tariffs on Canadian metals: President Trump announced plans to impose an extra 25% tariff on Canadian steel and aluminum, on top of the 25% duty set to begin today. The move came after Ontario imposed a 25% surcharge on electricity exports to US states, but Ontario’s premier paused the surcharge following a call with the US Commerce Secretary. The White House confirmed the additional tariff is no longer imminent, but the original 25% duty will proceed as trade talks resume.

• 🪖 US resumes Ukraine aid after ceasefire progress: The Trump administration lifted its pause on military aid and intelligence sharing with Ukraine after Ukraine agreed to a 30-day ceasefire—if Russia also agrees. The deal was negotiated during talks in Saudi Arabia, and US envoy Steve Witkoff will present the plan to Russia this week. The US aims to secure long-term stability in the region.

• 🎿 Foreign skiers flock to Japan’s snowy mountains: Japan’s ski resorts are experiencing record snowfall and a surge in foreign visitors. Some areas have over 12 feet of snowpack, attracting US tourists taking advantage of a weak yen and lower ski costs compared to US resorts. Tour operators report a 600% increase in bookings for Japan’s 2024–2025 ski season.

• 💼 US job openings rise despite hiring slowdown: US job openings increased in January, signaling continued strength in the labor market despite signs of slowing hiring. Economists see the increase as a positive sign of resilience, though other employment metrics remain mixed. The trend suggests that demand for workers remains stable despite economic uncertainty.

• 🧑‍⚖️ Rodrigo Duterte arrested and transferred to the ICC: Former Philippine President Rodrigo Duterte has been arrested and transferred to the International Criminal Court (ICC) in The Hague to face charges of crimes against humanity related to his deadly anti-drug campaign. The case marks a pivotal moment in international justice, drawing mixed reactions from global leaders.

• 🇵🇹 Portugal’s government collapses after no-confidence vote: Portugal’s minority government, led by Prime Minister Luis Montenegro, collapsed after a no-confidence vote. The president has called for new elections, likely in May, as political instability raises concerns about the country’s economic and political future.

• ✈️ Southwest to start charging for checked bags: Southwest Airlines will end its long-standing “Bags Fly Free” policy in May, introducing fees for checked bags for the first time. The move comes after activist Elliott Investment Management pushed the airline to improve profitability, citing $1.5 billion in potential annual revenue from bag fees. The airline will also abandon its open seating policy next year.

RESOURCES
The Federal Reserve Resource

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