L3Harris Technologies (LHX): Missile Spinout, $1 Billion DOD Injection and Defense Upside
L3Harris Technologies (LHX) stands out on the upside. The stock rallies about 13% after announcing a plan to spin off its Missile Solutions business via an IPO in the second half of 2026, seeded with $1 billion from the U.S. Defense Department, which will also take an equity stake.
This structure does two things at once. First, it crystallizes value in a focused missile business that investors can value using pure-play defense growth and margin assumptions. Second, it strengthens the parent’s capital position with both cash and a stake in an asset whose revenue is anchored by long-term, high-visibility demand from the U.S. government.
Against the backdrop of rising geopolitical tension, missile systems sit at the center of modern deterrence and conflict. The combination of government capital, a designated spinout and a deepening strategic role supports a higher valuation multiple. Based on the current data, LHX is a clear “Buy”, with structural tailwinds and funding commitments that go beyond the typical defense cycle.
AI Semiconductors: Intel (INTC) and Advanced Micro Devices (AMD) Ride Hyperscaler Demand
The semiconductor and AI infrastructure trade remains intact and powerful. KeyBanc upgraded both Intel (INTC) and Advanced Micro Devices (AMD) to “overweight,” citing robust hyperscaler demand and exceptionally tight supply in server CPUs.
Intel (INTC) trades around $47.21, up about 7.2% on the day. The new $60 price target implies around 27%–28% upside from current levels and roughly 36% upside from Monday’s close. Intel shares have already climbed well over 100% in the past year, supported by a pivot to data center and foundry strategy. The bank notes that Intel is largely sold out of server CPUs for 2026 and is considering 10%–15% price increases on average selling prices due to demand strength.
AMD shares also benefit from the upgrade and the broader narrative that AI workloads continue to ramp. Hyperscalers are not just maintaining, but growing their compute budgets, and high-performance CPUs and accelerators remain central to that buildout.
With Nasdaq 100 futures only modestly lower and the Nasdaq Composite flat to slightly positive, it is clear that AI and semis remain the core drivers of index-level resilience. On today’s numbers and demand signals, both INTC and AMD merit a “Buy” stance, accepting volatility but backed by visible, high-margin demand in data-center compute.
High-Growth Internet: Reddit (RDDT) and AI-Driven Monetization
In social and high-growth internet, Reddit (RDDT) garners attention after an initiation at “outperform” with a $320 price target, about 31% above Monday’s close. Reddit shares already gained roughly 40% in the last twelve months, but the thesis rests on two incremental levers.
First, user growth and engagement remain strong, giving Reddit a broad base for monetization. Second, the platform’s data is increasingly valuable for AI training, and products like R-Max point to higher average revenue per user (ARPU) over time. Compared with peers, Reddit still sits below its potential ARPU ceiling, leaving room for catch-up as new ad formats and data-licensing deals mature.
Given the current valuation and upside potential, RDDT screens as a “speculative Buy”: attractive for investors comfortable with platform, content-moderation and regulatory risk, but not a core holding for conservative, income-focused portfolios.
Commodities: Gold Above $4,600, Silver at Record, and Oil Rallies on Iran Risk
Gold futures are trading above $4,600 an ounce, recently around $4,633–$4,636, after posting a record high near $4,640 on Monday. Silver futures hit a fresh record around $88.55 an ounce earlier, confirming strong appetite for precious metals as hedges against political and policy risk.
The S&P GSCI spot index near 569.8, up about 1.1%, signals broad commodity strength. Gold is benefiting simultaneously from concerns over Fed independence, lingering inflation anxiety, and rising geopolitical tension tied to Iran and the new 25% tariff threat on countries doing business with Tehran.
In energy, WTI crude trades around $60.9–$61.0 per barrel, with the U.S. crude continuous contract near $60.99, up about $1.49 or 2.5% on the session. Traders are beginning to price a higher probability of supply disruptions, shipping reroutes, and sanction-related tightening of flows as Iran’s trading network comes under additional pressure.
At these levels, gold is a “Hold with a bullish bias”—trend, policy and geopolitical drivers support higher prices, but the market is extended and vulnerable to sharp pullbacks if tensions ease. Oil earns a “Hold to mildly Bullish” view: fundamentals point to gradual tightening, and new geopolitical risk supports the price, but policy-driven surges can reverse quickly.
Crypto and FX: Bitcoin Strength and a Stabilizing U.S. Dollar
Bitcoin (BTC-USD) trades near $92,162, up around 0.8%, after bouncing from an intraday low near $90,900. With core CPI at 2.6%, headline at 2.7%, and rate cuts still expected from mid-2026 onward, alternative monetary assets continue to find demand. The Powell probe and questions about Fed independence add another narrative layer that keeps interest alive in non-sovereign stores of value.
In foreign exchange, the U.S. Dollar Index (DXY) sits just under 99.0, up about 0.1%–0.15%, partially unwinding Monday’s drop as fears around Powell’s investigation cool. The Japanese yen is notably weak, while the Nikkei 225 surged to a new record, supported by the prospect of a snap election and ongoing demand for Japanese equities even as local government bonds sell off.
At current prices, BTC-USD looks like a “High-risk Hold”: momentum and macro themes remain favorable, but any shift in Fed expectations, regulatory posture or risk appetite could trigger heavy, rapid drawdowns.
Housing and Rates: Mortgage Costs Hit a 15-Month Low
The easing in yields is now visible in the real economy. The national average 30-year fixed mortgage rate for new home purchases has drifted down to around 6.23%, the lowest level since early October 2024, after spending much of the past year near or above 7%, with multiple spikes over that threshold.
This move does not restore the ultra-cheap borrowing conditions of the 3% era, but it is enough to unlock some pent-up demand from buyers who have been sidelined, and it supports homebuilders, building-products companies and housing-adjacent consumer names. For the broader equity market, it is a slow-moving positive rather than a sharp, tradeable catalyst for today’s session.
Macro Hazards and Valuation: Dimon’s Risk List Versus Record Highs
JPMorgan CEO Jamie Dimon described the U.S. economy as “resilient,” pointing to continued consumer spending, broadly healthy corporate balance sheets and the support from fiscal stimulus, deregulation and the Fed’s existing policy stance. The latest CPI reading and a still-stable labor market support that characterization.
Dimon also highlighted hazards that markets may not be fully pricing. Complex geopolitical conditions, including the Iran situation and broader regional tension, remain an open threat. Sticky inflation is still a possibility even with core at 2.6%, particularly if wage dynamics or shelter costs re-accelerate. And elevated asset prices are an undeniable fact with the S&P 500, Dow and Russell 2000 all recently at or near record highs.
The current setup leaves investors with less margin for error. A negative shock from Fed politics, a deeper Iran-related escalation, or a surprise in future inflation data would hit an equity market that has limited valuation cushion.
Verdict: Index-Level Hold, Targeted Buys in Defense and AI
On the full set of data:
The S&P 500 (SPX) around 6,963, with headline CPI at 2.7%, core at 2.6%, and roughly two cuts priced for 2026, deserves a “Hold with a mildly Bullish tilt”. Earnings growth near 15% this season and a benign inflation path support current levels, but upside from here is more incremental than explosive.
The Dow Jones Industrial Average (DJIA) near 49,300, heavily influenced by JPM, GS and V, is a “Hold / Neutral” until regulatory risk around credit card economics and the Powell investigation clarifies.
The Nasdaq Composite (COMP) around 23,714, powered by AI and data-center names, remains a “Hold to Buy on weakness” story. Intel (INTC) and Advanced Micro Devices (AMD) both justify a “Buy” stance with visible demand, tight supply and potential 10%–15% price increases on server CPUs through 2026.
L3Harris Technologies (LHX), with a $1 billion Defense Department-backed missile spinout, earns a firm “Buy” rating based on direct government capital, long-cycle demand and unlocked sum-of-the-parts value.
Delta Air Lines (DAL) sits at “Hold”, balancing solid demand and card-sourced profits against weaker guidance and structurally thin flying margins.
Across assets, gold above $4,600 and silver at record levels are “Hold with bullish bias” hedges, WTI crude near $61 is a “Hold to mildly Bullish” energy play on Iran risk and tightening fundamentals, and Bitcoin (BTC-USD) at around $92,000 remains a “High-risk Hold” in a macro regime that still rewards alternatives but offers no downside protection.
Overall, the stance that fits the data is index-level caution with targeted aggression: stay neutral to slightly constructive on the major benchmarks, and channel risk capital into high-conviction winners in defense (LHX) and AI semiconductors (INTC, AMD), while treating financials, richly priced cyclicals and politically exposed card networks as names to hold, not chase.
