Happy Wednesday afternoon to everyone on The Street. Here's a snapshot of where markets ended the trading session, plus tomorrow's trade idea delivered to you today.

• 🟩 | US stocks rose Wednesday. The S&P 500 and Nasdaq Composite indexes marked their ninth positive session in the past 10, with the S&P 500 finishing the day just under 1% away from its record closing high.

• 📈 | One Notable Gainer: Shares of Target soared 11% on news that sales increased as more shoppers visited Target’s stores and website, purchasing more discretionary items like clothing.

• 📉 | One Notable Decliner: But, but, but… Fellow retailer Macy’s stock plummeted 13% after it fell short of second-quarter revenue and sales estimates due to a challenging consumer environment. Why? Per the WSJ, “U.S. shoppers are eager for discounts…” (Subscription required).

• 🧑‍💻 | Tomorrow's Trade: Is This the Last Cheap Chip Stock?

Plus, pump up your financial fitness with Advisor.

MARKET MOVERS

Peloton, TJX, JD.Com

PTON (+5%) Peloton and Planet Fitness are expanding their investments in strength over cardio equipment as more women and young people opt for weights at the gym. (CNBC)

TJX (+6%) TJX Companies raises full-year guidance, posts 5.6% sales gain for the most recent quarter (CNBC)

JD (-4%) Walmart unwinds JD.com investment, to focus on own China ops (Reuters)

TOL (+6%) Toll Brothers Earnings: Luxury Homebuilder Jumps In Buy Zone On Higher Outlook (IBD)

CEIX (+1%) Coal companies Consol Energy and Arch Resources see shares rally on $5 billion all-stock merger deal (MarketWatch)

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OVERHEARD ON THE STREET

Fortune: Nearly 22 million people in the U.S.—roughly one in 15 Americans—had wealth upwards of $1 million last year, according to UBS' 2024 global wealth report.

CNBC: The U.S. dollar is likely to continue to drift lower against the Japanese yen over the coming months, according to one market strategist, particularly as the yen-funded “carry trade” could have plenty of room to run.

MarketWatch: “There’s a 64% probability that Kamala Harris will win this November’s presidential election, given the stock market’s strong year-to-date performance.”

Yahoo Finance: A measure of US mortgage applications for home purchases slid last week to the lowest level since February, indicating elevated housing prices are impeding a nascent upswing in demand from falling mortgage rates.

CNBC: The U.S. economy created 818,000 fewer jobs than originally reported in the 12-month period through March 2024, the Labor Department reported Wednesday.

TOMORROW’S TRADE IDEA, TODAY

Is This the Last Cheap Chip Stock?

Second Run Ready

For investors who weren’t in a position to capitalize on the first chip rally, you may be in luck. ON Semiconductor (ON) might just be one of the last remaining chip stock bargains. 

The PHLX Semiconductor Index has popped 26% year-to-date, thanks largely to the key role these chipmakers play in powering AI tools. ON’s shares, however, are down 7% in the same period.

At present, ON Semiconductor is trading around a 17.5 multiple of forward earnings, significantly lower than the index’s 32 multiple.

Slow Ride

One reason why ON may have missed out on the first rally is that automakers, which make up around half of ON’s business, over-ordered chips during the pandemic. 

Since then, automakers have been using up existing inventory instead of purchasing new chips, resulting in a lag for companies like ON.

Some of ON’s competitors were also affected by this slowdown in orders — but their stock prices were not as negatively impacted. As a result, ON is now a cheaper investment than many other chip stocks.

Then & Now

Thanks to its low multiple, ON could be in a unique position to see gains once orders start flowing in again. 

CEO Hassane El-Khoury has also taken steps to cut less profitable businesses and reduce ON’s manufacturing footprint. The company argues that this has cost some short-term revenue, but resulted in a more cost-effective company in the long run. 

On top of that, ON is building a new $2 billion facility in Czechia, and just inked deals to provide silicon-carbide chips to Volkswagen (VWAPY). 

This year’s chip rally feels like it has gone on forever. But for ON Semiconductor, it may have yet to start.

TOGETHER WITH ADVISOR.COM

Pump Up Your Financial Fitness

Whether it comes to fitness or your finances, accountability is key. Hold yourself to your financial goals by training with a top financial advisor. Take our online quiz to find your perfect coach. We evaluate advisors' credentials, client reviews, and experience. Whether you're planning for retirement, investing, or saving for your dream vacation, our trusted recommendations guarantee you'll never make another financial decision alone. Start your journey to financial fitness today!

Find Your Financial Trainer

ON OUR RADAR

Axios: Starbucks is launching its pumpkin spice lineup earlier than ever to boost sales amid recent slowdowns.

Reuters: A federal judge in Texas blocked a new FTC rule that would prohibit non-compete agreements commonly used by employers.

USA Today: Chick-fil-A is opening its first elevated drive-thru restaurant in the chain, the company announced Wednesday.

WSJ: Elon Musk is beginning foreclosure on a Bel-Air home bought by filmmaker Jordan Walker-Pearlman and screenwriter Elizabeth Hunter.

Yahoo Finance: A Federal Reserve Bank of New York survey shows rising job-seeking and the highest unemployment concerns in a decade.

YESTERDAY’S POLL RESULTS

Are you bullish or bearish on Sarepta Therapeutics (SRPT) over the next 12 months?

🟩🟩🟩🟩🟩🟩 🐂 Bullish

🟩🟩🟩🟩🟩🟩 🐻 Bearish