📈 Gap's Quiet Turnaround

OpenAI Lands $200M Defense Deal, AMD Surges 9% on Snapback, Nvidia Jumps 10% AI Optimism, Amazon-Roku Reach 80% TV Households, Mitsubishi Eyes $8B Shale Buy

Author

Evelio Silvera
June 17, 2025

Good morning.

⚡ The Fast Five → OpenAI Lands $200M Defense Deal, AMD Surges 9% on Snapback, Nvidia Jumps 10% AI Optimism, Amazon-Roku Reach 80% TV Households, Mitsubishi Eyes $8B Shale Buy

🔎 Market Trends → Equities end higher as oil prices pull back on truce hopes; US stock futures rise with focus on Mideast tensions, Fed meeting

And now…

⏱️ Your 5-minute briefing for Tuesday, June 17, 2025:

MARKET BRIEF
Before the Open

As of market close 06/16/2025.

Pre-Market

  • Advanced Micro Devices (AMD) with a +8.81% gain, the best performer on the S&P 500.

  • Lockheed Martin (LMT), which fell 4%, making it among the worst-performing stocks in the index for the day.

Fear & Greed

 

Markets in Review

Stocks Bounce Back as Middle East Fears Ease, Focus Turns to Fed

S&P 500 gained 0.9% to close at 6,033.1. The Nasdaq rose 1.5%, and the Dow added 0.8%, brushing off geopolitical jitters from the prior session.

The Big Picture:

Wall Street found its pulse again Monday, shaking off Middle East concerns as Iran signaled restraint and diplomatic backchannels opened. Investors rotated back into growth, particularly tech, ahead of this week’s Fed meeting.

Tensions remain, but Tehran’s willingness to negotiate over its nuclear program—and reluctance to escalate—tempered fears of broader conflict. Oil pulled back sharply as traders priced in reduced war risk.

Now, all eyes turn to the Federal Open Market Committee, which begins its two-day meeting Tuesday. With inflation cooling and risks shifting, the Fed is widely expected to hold rates steady, but Chair Jerome Powell’s tone will set the stage for Q3.

Market Movers:

  • Advanced Micro Devices (AMD) soared 8.8% after Piper Sandler boosted its price target, citing AI tailwinds and continued momentum in server chips.

  • Eaton (ETN) climbed 4.4% on news it’s acquiring UK-based Ultra PCS for $1.55B, expanding its footprint in aerospace.

  • Victoria’s Secret (VSCO) rose 2.4% after activist investor Barington Capital called for board shakeup. The company defended its current leadership and direction.

What They’re Saying:

“The committee is in no rush to cut rates… but stands ready to act if labor weakens,”
— Macquarie, on Powell’s likely Fed message

WHAT WE’RE WATCHING
Events

  • Today: Census Bureau - Retail Sales Ex Autos; Advance Retail Sales - 8:30am

    Why You Should Care: It's the primary gauge of consumer spending, which accounts for the majority of overall economic activity

Earnings Reports

  • Today: Lennar Corporation, Digital Turbine, Inc.

  • Tomorrow: Korn Ferry, Smith & Wesson Brands, Aurora Cannabis Inc.

MARKET BRIEF
Leading News

Gap's Quiet Turnaround Shows How Retail Revival Really Works

Photo Credit: Ian Deng

Why it matters:

After two decades of decline, Gap (GPS) is proving that methodical brand rehabilitation beats flashy pivots—a lesson worth $3.5 billion in lost sales.

Zoom Out:

Gap's comeback story reads like a behavioral finance case study in patience versus panic. While most retailers chase quarterly earnings beats, CEO Richard Dickson spent his first year shrinking to grow—closing unprofitable stores and slashing SKUs before hiring Zac Posen to dress celebrities.

The numbers tell the real story: six consecutive quarters of same-store sales growth, with fiscal Q1 2025 delivering 5% growth on the company's highest gross margins in 20 years. This isn't growth for growth's sake—it's profitable expansion after brutal restructuring.

Key Insights:

  • Old Navy drives the bus: The brand generates over half of Gap's revenue, making Posen's creative leadership there more valuable than his red-carpet celebrity styling

  • Margin expansion matters more than top-line growth: That modest 1% sales increase in fiscal 2024 came with dramatically improved profitability—the kind of quality growth value investors actually reward

  • Tariff headwinds create opportunity: The $100-150 million tariff impact that spooked shares 15% lower may be precisely when patient investors should pay attention

Market Pulse:

"When you finally do grow sales, you want to grow it in an extraordinarily high profit generating and healthy manner," notes Barclays analyst Adrienne Yih—capturing exactly what separates sustainable turnarounds from temporary fixes.

Bull’s Take:

Gap proves that boring operational discipline beats trendy pivots every time. Smart money should watch whether Banana Republic and Athleta can replicate Old Navy's consistency before the next fashion cycle turns.

Headlines

  • Stock futures fall as Trump departs G7 summit prematurely to deal with Israel-Iran conflict (link)

  • OpenAI wins US$200-million defense contract to provide U.S. Defense Department with AI tools (link)

  • AMD shares rise 9% after analysts say they expect a ‘snapback’ for chipmaker (link)

  • Nvidia Shares Jump 10% on Bullish AI Chip Outlook (link)

  • Amazon Ads & Roku Set Landmark Pact Giving Brands Access To 80% Of Connected-TV Households (link)

  • Mitsubishi Corp in talks for $8 billion US shale acquisition (link)

  • Trump Organization announces mobile plan, $499 smartphone (link)

CRYPTO
Fear & Greed

 

Headlines

  • Bitcoin edges over $106,000 amid 'optimistic but measured' trader sentiment (link)

  • JPMorgan files trademark application for JPMD, citing multiple blockchain use cases (link)

  • Coinbase unveils Amex card, Shopify integration (link)

DAILY SHARE
On the Socials

*Hat-tip to wallstmemes

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