As September begins, markets are already showing signs of the volatility that often defines the month. In the latest episode of DH Unplugged, hosts Andrew Horowitz and John C. Dvorak dissect a confluence of geopolitical and economic events that are reshaping the investment landscape. The episode, titled "Strikes, Spikes, Hikes," opens with renewed U.S. bombing of Iran, a sharp move higher in crude oil, and rising bond yields, all against a backdrop of eroding institutional trust.
Crude oil has surged roughly 13% in two weeks to about $91.80, with diesel crack spreads flashing inflation warnings. This spike is driven by escalating tensions in the Middle East after President Trump threatened that Iran will be "totally wiped out as a country" if it retaliates again. The hosts note that such geopolitical instability often leads to higher energy prices, which can ripple through the economy and affect consumer spending.
In corporate news, Dell delivered blowout guidance, projecting fiscal 2027 EPS near $25.50 versus $18.99 prior, on the back of 40% data center share. This suggests strong demand for AI infrastructure, a theme that has been driving tech stocks. Meanwhile, Nvidia's reported $12.9 billion pursuit of Hugging Face highlights the race to dominate AI, but the fallout between Jensen Huang and Sam Altman adds a layer of drama to the industry.
Retail is facing its own challenges. Dick's Sporting Goods plunged roughly 30% as Foot Locker comps fell 3.6%, signaling weakness in consumer discretionary spending. Target's Halloween clown costume backlash is another example of brand-management landmines, showing that companies must tread carefully in today's social media-driven environment.
The hosts also address the broader macroeconomic picture. Treasury Secretary Scott Bessent and Fed nominee Kevin Warsh come under fire, with Horowitz stating, "The administration is the boy who cried wolf right now," and adding that "Bessent has really gotten a little bit crazed trying to manipulate the markets." Dvorak connects these issues to bond yields and the dollar, arguing that currencies, equities, and even private valuations rest on trust. "It's a series of very large trust factors," he says, warning that tariff escalation echoing Smoot-Hawley would signal that America no longer believes it can compete.
The discussion also touches on government equity stakes in Intel, MP Materials, and Trilogy Metals. A lawsuit now challenges the Intel arrangement, with Horowitz, who discloses a personal short position in Intel, questioning why Washington gets discounted shares that retail investors never see. Dvorak contrasts the U.S. approach with China's state-owned enterprise model and highlights GLM 5.3 Flash from Chinese lab Z.ai, reportedly trained without a single Nvidia chip, underscoring the global competition in AI.
Other notable items include LEGO's 21% first-half revenue jump and the baseball-card casino economy drawing scrutiny from Japanese regulators. Friday's August payrolls, ADP, JOLTS, and ISM data are set to provide further clarity on the labor market, which the Federal Reserve is closely watching.
This episode underscores the interconnectedness of geopolitics, energy prices, corporate earnings, and monetary policy. For investors, the key takeaway is the fragility of trust in institutions and the potential for market volatility as these forces converge. The hosts' skeptical, unfiltered voice serves as a reminder that navigating today's markets requires vigilance and a willingness to question conventional wisdom.
