These are the early headlines and other items poised to influence the market at the start of the trading day. As we share this collection of market drivers, U.S. equity futures point to mixed market open later this morning.
1. The U.S. military has quietly established a shipping corridor in and out of the Strait of Hormuz to transport millions of barrels of oil each day — a notable success even as the broader war remains at a stalemate, two U.S. officials told Axios… About 10 million barrels of oil a day — roughly half the pre-war volume — are being transported out of the strait and injected into the global energy market, the officials said. (Axios)
The above helps explain why oil prices have, so far, not returned to their July high and remain, again so far, well below their April and May highs. While this is helping reduce the pressure, it’s not removing all it as evidenced by oil prices hitting their highest level in the last few weeks.
Coming off the revelations in the FOMC meeting minutes released on Wednesday, including “many” thinking a rate hike would be necessary if inflation did not decline, oil prices are up more than 25% from their early July low. While next week’s July PCE data is likely be favorable on the inflation front, our view continues to be that Friday’s Flash August PMI data will be more insightful.
If that signals inflation tailwinds accelerated, the market may need to revisit its expectations for the Fed’s September policy meeting. If oil pressures rise further in the coming weeks, the need to revisit will strengthen further.
2. America’s gross national debt topped $40 trillion for the first time on Wednesday, an ominous milestone for an economy that sits on a shaky fiscal foundation after decades of borrowing to pay for the rising costs of the military, social safety net programs and President Trump’s tax cuts. This year alone, the United States is on track to borrow more than $2 trillion to help pay for its obligations, including spending on the war in Iran and the sweeping tax cuts that Republicans enacted in 2025. Soaring interest payments to investors who have purchased America’s debt now make up about half of that red ink, pushing the United States into a deeper financial hole. (NY Times)
On the one hand, that helps explain President Trump’s continued call for lower interest rates, something he reiterated during a press conference on Wednesday afternoon. Even though rating agency Fitch gave the U.S. a rating of “AA+,” piercing that $40 trillion level will more than likely lead investors to demand higher interest rates for U.S. bonds. As we approach the mid-term elections, questions over cutting spending and ways to increase revenue could come to the forefront of the conversation.
3. OpenAI “will be a public company in 2027,” if not sooner, Chief Financial Officer Sarah Friar told employees Wednesday (Aug. 19) during an all-hands meeting… Friar said OpenAI could make its public debut this year if “our business continues to inflect…” Friar said that OpenAI’s revenue run rate is up 35% so far this quarter, its enterprise revenue run rate is up 50%, and its AI coding and work product has reached 20 million weekly active users… (PYMNTS)
We’ll cheekily say the above continues the tit-for-tat, back-and-forth headlines between Anthropic and OpenAI. But the figures cited by Friar point to continued AI adoption and expanding usage, which as you know, if something we continue to track closely for several holdings in the Portfolio.
Should OpenAI accelerate its IPO timeframe, odds are that offering would land in the final quarter of the year alongside the one for Anthropic. That would not only suggest a very strong period for investment banking fees, it would also lay the groundwork for Neostellar Capital (NSLR) to monetize its OpenAI position in 2027.
4. The U.S. Securities and Exchange Commission has proposed several new reforms designed to make it easier for companies to enter the public markets and meet the ongoing demands of listed life. The overhaul of filer categories is the most consequential regulatory shift in this space, and for finance leaders and boards weighing an IPO, it materially alters the equation. After years of subdued listings and well-documented frustration with the compliance costs of going public, the proposal offers something concrete: more time, greater certainty and a clearer path to market. (CFO)
Sticking with investment banks, a streamlined process for private companies to go public, provided it does not cut corners. For now we are in the proposal stage, and that means we will monitor the twists and turns it may take in Washington and focus on what a final proposal resembles. If it can cut the red tape and maintain management and board oversight and responsibility, that would be a positive for investment banking prospects.
5. Walmart Inc.’s quarterly sales fell short of expectations, a rare miss that’s likely to stoke concern about the leading big-box retailer decelerating alongside a slow-growing US economy. Sales at US stores open at least a year, excluding fuel, rose 2.6% in the second quarter, shy of the lowest analyst estimate compiled by Bloomberg. That rate of growth — hindered in part by pricing pressure in its pharmacy business — is the slowest in more than six years. (Bloomberg)
How much of this is Walmart (WMT) missing lofty Wall Street expectations predicated on the company benefitting from consumer wallet share gains versus what the results say about the shape of the consumer may be determined on Thursday morning’s earnings conference call. What we can say is that the 2.6% U.S. comp sales figure signals shoppers are going elsewhere, and one of those places is Costco (COST). More to come once we digest management’s earnings call comments.
6. Crypto companies, artificial intelligence firms and online betting have emerged as the biggest industries shaping the 2026 midterm races, driving a record amount of business spending on congressional contests, according to campaign finance watchdogs and interviews with more than a dozen political strategists from both parties. (Reuters)
“Follow the money” is a phrase often cited by law enforcement and, in this case, where it is coming from tells us what we are likely to see on the policy front in the coming months. As lawmakers across the country press for more scrutiny and regulation of these industries, we’ll want to see if those views soften.
Here’s the thing, U.S. companies have spent $517 million on the 2026 U.S. House and Senate races in the 15 months through Q1 2026. That’s more than the record $461 million in corporate spending over two years for the 2024 elections, per data compiled by Public Citizen. Given how contentious the mid-term elections are going to be and how the outcome will influence the administration’s ability to govern, odds are that the final push will see significant spending.
Leaving politics to the side, this bodes well for advertising spend marching up to the mid-terms, making it a robust tailwind for Alphabet (GOOGL), Meta (META) and others as candidates aim to get their message out.
7. Economic data today per TipRanks: Initial & Continuing Jobless Claims (Weekly), Philly Fed Manufacturing Index (August), CB Leading Index (July), EIA Natural Gas Inventories (Weekly)
8. Companies reporting today per TipRanks: AM – Advance Auto (AAP), Alibaba (BABA), Autohome (ATHM), NetEase (NTES), Walmart (WMT). PM – Flowers Foods (FLO), Ross Stores (ROST).
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At the time of publication, TheStreet Pro Portfolio was long COST, GOOGL, META and NSLR.
