Daily US Equity Opening News: OpenAI plans to end SPCX Cursor model contract; PCG, EIX, SRE downgraded

DAY AHEAD:

• US INDEX FUTURES: ES -0.4%, NQ -0.3%, YM -0.4%, RUT -0.2%
• EVENTS: The G20 finance talks start on today, ahead of the leaders’ summit scheduled for 14-15th December. President Trump will make an announcement on healthcare at 15:00EDT/20:00BST. UK markets are closed for the Summer Bank Holiday.
• DATA:  In North America, the Dallas Fed manufacturing index is due (prev. 1.3).
• WEEK AHEAD: This week’s highlights include: policy announcements from the RBNZ and BoC; US jobs data, US ISM Manufacturing and Services surveys; Eurozone prelim CPI. Notable earnings releases due this week include: AVGO, DELL, PANW.

TECH:

• Apple (AAPL) - John Ternus is set to officially becomes Apple CEO on 1st September, succeeding Tim Cook, who will remain executive Chairman. Ternus is seen prioritising AI, new hardware and design, while relying on senior executives for operations. Ternus will lead as Apple prepares a foldable iPhone and expanded Siri AI, while facing talent losses to OpenAI and pressure in its services and supply chains.
• OpenAI, SpaceX (SPCX) - OpenAI notified SpaceX that it intends to wind down its contract providing OpenAI models to Cursor, proposing a shutoff on 12th November. OpenAI said it was giving the maximum contractual notice, citing concerns that SpaceX may not use its technology within its terms of service, based on prior experience with Elon Musk’s companies.
• SoftBank (SFTBY), OpenAI - OpenAI was issued warrants valued at about USD 5.5bln in SoftBank-backed SB Energy as an incentive to become a data centre tenant ahead of SB Energy’s IPO, WSJ reports. OpenAI had previously invested in SB Energy.
• Intel (INTC) SK Hynix (SKHY) - SK Hynix is reportedly considering Intel Foundry to supply base dies for its next-generation HBM4E memory, according to Herald Economy. A deal could diversify SK Hynix’s supply chain away from reliance on TSMC and provide Intel with a major foundry customer. SK Hynix had previously denied reports linking it to Intel’s delayed Ohio fab.
• SK Hynix (SKHY) - SK Hynix is considering a JV to build a memory chip plant in Japan; options include co-investment, a JV or a small Japanese acquisition. SK Hynix is also expanding in South Korea and Indiana, and exploring deeper cooperation with Kioxia Holdings (KXIAY) and other Japanese customers and suppliers.
• CXMT (688825 CH) - China’s CXMT has begun mass production of LPDDR6 memory and will supply the first batch to Xiaomi’s upcoming 18 Fold flagship, Digitimes reports. CXMT said it marks the first commercial deployment of LPDDR6 worldwide.
• SAIC (SAIC) - Q2 adj. EPS USD 3.01 (exp. USD 2.31), revenue USD 1.88bln (exp. USD 1.76bln); sees FY27 revenue USD 7.2-7.3bln (exp. USD 7.19bln) and adj. EPS USD 10.65-10.75 (exp. USD 10.18).

ENERGY:

• Venezuela Oil - President Trump announced US majority control of more than 65bln barrels of Venezuela’s proven oil reserves via a private sector partnership. The deal aims to expand US access to Venezuelan crude and attract nearly USD 100bln in investment. Venezuela’s Delcy Rodriguez said development of 17 fields could generate USD 209bln in tax revenue. Trump said the Venezuelan crude under US control will be used to refill the Strategic Petroleum Reserve, which currently holds 289.7mln barrels (about 40% of capacity).
• Russian Diesel - Russia extended its diesel-export ban for producers through 30th September to support domestic fuel supplies amid intensified Ukrainian refinery attacks. The move adds pressure to already-tight global diesel supplies. Goldman Sachs has more than doubled its 2027 diesel refining margin forecasts, citing refinery disruptions from wars in the Middle East and the Russia-Ukraine conflict. GS now expects margins over Brent of USD 63/bbl in the US, and USD 49/bbl in the EU (prev. saw USD 27 and USD 19, respectively).
• Oil Refiners - President Trump is set to meet representatives of at least ten oil refining and fuel distribution companies on 1st September to discuss high gasoline prices, domestic refining capacity and potential policy changes. Invited companies include Marathon Petroleum (MPC), Chevron (CVX), Valero (VLO), PBF Energy (PBF) and Delek US Holdings (DK).
• ONEOK (OKE), Apollo (APO) - ONEOK agreed to acquire Brazos Midstream’s Permian Midland Basin natural gas gathering and processing assets for USD 4.425bln. The acquisition will be funded through a USD 9bln non-voting minority equity investment from Apollo-managed funds and affiliates, with ONEOK planning to use USD 5bln of the proceeds to reduce existing debt.
• SLB (SLB) - To acquire Kelvion for USD 3.4 bln in cash plus USD 0.7 bln debt, valuing the deal at ~11x 2026 EBITDA (~8.5x incl. synergies); expects USD 120 mln annual EBITDA synergies within 3 years and deal accretive to EPS and FCF/share within 12 months. Combined data center business expected to generate >USD 2 bln revenue in 2026, with SLB targeting USD 4.5-5 bln revenue and USD 700-800 mln adjusted EBITDA by 2028.

INDUSTRIALS:

• SpaceX (SPCX) - NASA and SpaceX postponed the Crew-13 mission to the International Space Station after detecting an oxidiser leak in the Dragon spacecraft’s propulsion system. Additional testing is underway, and no new launch date has been announced.
• Babcock & Wilxcox (BW) - Needham initiated coverage of BW with a Buy rating and USD 20 PT. The company has repaired its balance sheet and secured a USD 2.4bln FastPower award with Base Electron that lifted its backlog to USD 2.6bln. Needham cites the potential for FastPower to become a repeatable data centre generation platform as gas-turbine lead times extend for the Buy rating on Babcock. The stock at current levels reflects the core business and net present value of the Base Electron project, with limited credit for expansion of the FastPower into the quoted USD 14bln pipeline, the firm argued.
• Airbus (EADSY) - Airbus is exploring a sale of its US space business as it shifts satellite production towards Europe, FT reports. The unit includes a Florida factory and Arrow small satellites. GE Aerospace (GE)* - General Electric was awarded a maximum USD 319.55mln Defence Logistics Agency contract modification for J85 engine supplies.
• BAE Systems (BAESY) - Awarded a USD 167.5mln US Navy contract modification for MK 41 Vertical Launching System Mechanical Design Agent support. Options could raise the action’s cumulative value to USD 343.3mln.

HEALTHCARE:

• Eli Lilly (LLY) - To acquire Merida Biosciences for up to USD 2.875 bln in cash, including upfront and contingent milestone payments; Merida’s lead program targets selective elimination of autoantibodies driving Graves’ disease and thyroid eye disease while preserving normal immune function, with initial Phase 1 data showing potential for improved efficacy and safety. Meanwhile, Lilly reported 52-week results from TOGETHER-PsO and TOGETHER-PsA Phase 3b trials, showing Taltz + Zepbound maintained or further improved disease activity and metabolic outcomes vs. Taltz alone in adults with psoriasis/PsA and obesity. Improvements in inflammation and metabolic measures, including BMI, blood pressure, glucose, HbA1c, triglycerides, and cholesterol, were sustained or further improved, with no new safety concerns.
• McKesson (MCK) - McKesson disclosed unauthorised access to third-party applications and data theft was discovered on 25th August. ShinyHunters claims vishing compromised employees’ Okta accounts, enabling access to Salesforce (CRM) and Snowflake (SNOW) and theft of about 1TB, including 284mln patient-related records. The group demanded USD 55.24mln. McKesson says its investigation remains ongoing.
• Bristol Myers Squibb (BMY) - Bristol Myers Squibb presented EXPLORER-LTE cohort results from the MAVA-LTE study showing Camzyos effects were sustained for up to five years with continuous treatment. Additional ESC Congress 2026 presentations from the COLLIGO-HCM retrospective real-world study provided further evidence supporting Camzyos and treatment decisions for people living with the condition.
• Bayer (BAYRY) - Bayer presented first detailed Phase III REVEAL results evaluating investigational PET radiotracer iodine 124 evuzamitide for diagnosing cardiac amyloidosis. The Brigham and Women’s Hospital-led study met primary endpoints for sensitivity and specificity based on visual scan interpretation. Safety and secondary endpoint data in AL and ATTR amyloidosis were also presented; the compound remains unapproved.

FINANCIALS:

• Aon (AON), KKR & Co. (KKR) - Aon agreed to acquire USI from KKR and other shareholders for USD 17B, strengthening its US middle-market insurance platform and expanding its exposure to the fast-growing E&S segment. The deal is expected to generate USD 395M in annual run-rate net adjusted EBITDA synergies and be accretive to adjusted EPS in 2028; USI CEO Mike Sicard will become Aon president and global CEO of Middle Market following closing.
• Allianz (ALIZY) - Allianz is considering a roughly GBP 5bln takeover of UK roadside-assistance group AA, Sky News reports. The AA’s private-equity owners TowerBrook Capital Partners, Warburg Pincus and Stonepeak are pursuing a sale or possible 2027 London listing. UBS Group (UBS) - UBS could face softer Swiss capital requirements, with an Upper House committee leaning towards requiring 50% CET1 backing for foreign units rather than the government’s proposed 100%. The Swiss government is expected to decide on the rules today, and send a revised banking bill to the Upper House.
• German Regional Banks - More than half a dozen German cooperative banks have sought peer support in recent years after overextending into riskier loans and investments, with Volksbank Brawo the latest example following the removal of its CEO after a decade-long expansion, Bloomberg reports. At least EUR 1bln in support measures have been extended across the sector in recent years, with bad loan transfers to the sector’s BAG bad bank surpassing EUR 1.2bln last year, the highest in over two decades. DZ Bank estimates its contributions to the sector’s protection scheme will double to EUR 117mln this year.

CONSUMER CYCLICALS:

• GameStop (GME) Q2 2026 prelim. (USD): Sales 780-800mln (exp. 756mln), Net Income 290-310mln. Amended its convertible notes exchange agreement, with approximately USD 358.4mln to be settled in cash instead of stock.
• General Motors (GM) - Canadian workers approved new three-year deal, including CAD 144mln investment to add next-generation heavy-duty GMC Sierra production in Oshawa and a CAD 215mln transmission investment in St. Catharines; GM has committed more than CAD 1bln to Canadian plants amid US tariff pressure.
• Mercedes-Benz (MBG) - Mercedes has launched a EUR 1bln buyback.

COMMUNICATIONS

• Pinterest (PINS) - CFO Julia Brau Donnelly resigned to pursue another opportunity, effective October 30; Vikram Naidu appointed interim principal financial officer, while the company begins an external search for a permanent successor.
• ChatGPT, Reddit (RDDT), Roblox (RBLX) - The EU designated ChatGPT, Reddit (RDDT) and Roblox (RBLX) as very large online search engines under the DSA.

UTILITIES

• Utilities - California lawmakers blocked Governor Newsom’s proposed wildfire liability reforms that would have limited insurers’ ability to recoup losses from investor-owned utilities. The news broke on Friday, sending stocks lower. Today, PG&E (PCG) fell over 17% in premarket after Mizuho and BMO Capital downgraded the stock, while Wells Fargo also cut its rating; analysts cited Senate Bill 492’s failure to provide a durable wildfire-fund replenishment mechanism or liability backstop, leaving shareholders exposed to open-ended wildfire risk. Mizuho cut its PT to USD 16 from USD 21, BMO to USD 21 from USD 28 and Wells Fargo to USD 24 from USD 25. Equinix (EIX) was also downgraded at Mizuho to Neutral from Outperform with a USD 70 PT (prev. 86) and Sempra Energy (SRE) to Neutral from Outperform with a USD 84 PT (prev. 104).

MATERIALS:

• Glencore (GLNCY) - Glencore took a provision of about USD 480mln covering its net exposure to iron ore trader Radiant World, Bloomberg reports. Radiant World owes Glencore USD 951mln, while Glencore owes Radiant World USD 471mln. Glencore has now ended business with Radiant World amid concerns over allegedly falsified documents. Radiant World denies any wrongdoing.

CONSUMER STAPLES:

• Walmart (WMT) - The DoJ and DEA said Walmart will pay USD 50mln to settle allegations that its pharmacies illegally filled thousands of invalid opioid and controlled-substance prescriptions. Walmart also agreed to establish reporting hotlines, monitor pharmacy dispensing patterns and create a process to evaluate prescribers suspected of illegal prescribing.

GEOPOLITICS:

• US-Iran - The US and Iran exchanged strikes for the first time in about a month; US forces hit Iranian rocket launchers allegedly preparing to deploy mines into the Strait of Hormuz, while Iran responded with missiles toward Jordan. US Central Command said IRGC claims of US aggression in the Strait of Hormuz were false. It said US forces carried out limited, precise action against IRGC minelaying forces which posed an imminent threat, aiming to protect civilian mariners, commercial shipping and the free flow of global commerce. CENTCOM added that it remains prepared to protect commercial shipping through the waterway.
• US-Iran - Senior US military leaders warned Defence Secretary Hegseth that prolonged large-scale operations against Iran are unsustainable, and risk weakening readiness elsewhere, Washington Post reports. The US Navy said current support levels cannot be sustained indefinitely; European, Pacific and Southern Command leaders have also formally opposed some extensions, while Army and Air Force leaders cited significant risks.
• China - China will begin security checks of military supply chains as part of efforts to strengthen defence-industry self-reliance, Bloomberg reports. The Central Military Commission and State Council departments will survey military hardware, supplies and specialised production equipment under the revised National Defence Mobilization Law passed on Friday.
• EU-Russia - The EU plans to unveil one of its largest Russia sanctions packages in response to hybrid threats, according to Politico; a draft list targets about 1,600 individuals and entities, and is expected to be finalised by the October EU leaders’ meeting.

TRADE:

• G20, US-China - US Treasury Secretary Bessent plans to urge G20 members to reassess trade terms with China, Reuters reports. He said China’s USD 1.2tln trade surplus is unsustainable, and countries should press Beijing to strengthen domestic demand.
• G20 - German Finance Minister Klingbeil plans to urge G20 counterparts to reduce economic uncertainty caused by tariff disputes and the wars in Iran and Ukraine; he said these conflicts damage global growth and will seek closer cooperation with countries including India, Canada and the UK that support open, rules-based trade.
• Iceland-EU - Iceland will not resume EU accession talks after 52.8% of voters rejected reopening negotiations. Opponents cited concerns over sovereignty and control of fisheries and agriculture, while supporters highlighted trade and cost benefits. PM Frostadottir said the government would honour the referendum result.
• US-Canada - President Trump posted a series of statements urging Canadian companies doing business with the US to relocate immediately, promising no tariffs for those that move, and claiming the US loses more than USD 60bln annually in trade with Canada.
• US-Canada - Ontario Premier Ford ridiculed Trump’s order renaming Lake Ontario to Lake America but expressed optimism that the two countries would ultimately resolve their trade differences. Alphabet’s (GOOG) Google Maps relabelled Lake Ontario as “Lake America” for US users after an official US geographic naming change. Canadian users will still see “Lake Ontario,” while other countries will see both names. MapQuest will retain Lake Ontario, and Apple (AAPL) Maps currently continues using that name for US users.

MACRO:

• Japan - USDJPY’s move beyond 160 has increased expectations of possible Japanese intervention, Bloomberg reports; strategists cited 161 and 162-163 as key levels to watch. Follows Japan spending a record USD 96.4bln supporting the currency over the past month; markets price a 90% probability of a BoJ September rate hike. US Treasury Secretary Bessent said he expects the BoJ “to do the right thing” on monetary policy. Analysts also say that Japan’s GPIF pension fund may be justified in raising its domestic bond allocation above 25%, as domestic yields approach 3%; analysts cited by BBG said that an allocation of 30-35% could be seen. The fund manages about JPY 318tln total, and purchased around JPY 5.7tln of Japanese debt in Q2.
• China - China’s official manufacturing PMI rose to 49.8 in August (exp. 49.6; prev. 49.2), remaining in contraction, but with new orders and production returning to expansion. The non-manufacturing PMI was unchanged at 49.0 (prev. 49.0), at the weakest level since December 2022, reflecting continued sluggishness in domestic consumption. The Analysts said that the divergence underscores China’s ongoing reliance on exports and manufacturing to drive growth.

US MIDTERMS:

• Trump Campaigns - President Trump said he plans to campaign for Republican lawmakers in the midterms with the same intensity as in 2024. Trump acknowledged governing parties often lose ground in midterms, but said Republicans would perform well. He also dismissed concerns over inflation and his six-month Iran war.
• Broadcasters - President Trump said he would report NBC anchor Kristen Welker to the FCC for “rebuke or punishment” over her characterisation of his midterm endorsement record, Washington Post reports. NBC defended Welker. Trump has previously urged FCC action against broadcasters, while experts cited First Amendment limits on punishing stations over viewpoints.