Martin Gamble on US markets: government debt tops $40 trillion, Moderna doubles

It was a difficult week for Wall Street as rising yields on US government bonds revealed mounting concern about the country’s spiralling debts.

These fears were compounded by the continued stalemate between the US-Iran with a lasting resolution to the Middle East crisis feeling as distant as ever. The impact from surprise intervention from the US Treasury to tackle rising yields proved short-lived.

Moderna took the headlines thanks to big news on cancer vaccines (of which more later) while Coinbase Global was also in demand amid a wider crypto rally as the Trump Administration pushed the CLARITY Act which is intended to provide a fresh regulatory framework for cryptocurrencies.

Delta Air Lines lost altitude as it attracted fire on social media from Elon Musk for choosing to utilise Amazon’s satellite network instead of SpaceX's Starlink. Dell Technologies and Intel were caught up in a broader tech hardware sell-off.

Moderna soars on cancer vaccine breakthrough

Shares in biotech stock Moderna more than doubled as the company announced a big breakthrough on cancer vaccines.

Developed in partnership with Merck, the company’s skin cancer vaccine enjoyed successful trial results which have led to a big reappraisal of its prospects.

Moderna is a leader in messenger RNA technology which teaches the body’s immune system to identify and treat illnessess. The idea with this jab is it would be tailor-made to target each patient’s tumour. The group has 15 cancer treatments in various stages of testing.

Even after a big uplift, the shares are still a long way below their pandemic highs. Not helped by diminished demand for Covid shots and a tricky political backdrop in the US.

A move into cancer treatment has always been part of the long-term strategy for the business but after this week the market is taking these aspirations much more seriously.

Walmart like-for-like sales growth slips to six-year low

Walmart may have beaten earnings expectations in the second quarter, but its weakest like-for-like sales growth in six years raised fears about the consumer backdrop in the US and led to a big slump in the shares.

The company plans to use the refund it gets on the Trump administration tariffs struck down by the US Supreme Court in February to lower prices through the remainder of the year as it looks to defend its market position.

Walmart’s e-commerce arm delivered all the growth with in-store sales declining in the period. Revenue rose 5.9% in the quarter to $187.9 billion, ahead of consensus estimates of $186.8 billion. Operating profit jumped by 28.8% to $9.4 billion, north of the forecast $8.6 billion. Though this did include tariff refunds.

The company upped its guidance for the current financial year, forecasting net sales to increase between 4-5% ahead of the previously guided 3.5-4.5%.

Broadcom looks to raise more than $60 billion in debt

As Broadcom looks to equip itself for a battle for market share in the AI chip space with Nvidia it is reportedly in talks to raise more than $60 billion in debt.

The total raised could ultimately push through $100 billion – with Blackstone and Apollo Global Management supporting the financing having struck a partnership with Broadcom in June.

The intention is to channel this fresh funding towards chips for Anthropic, the owner of the Claude chatbot, which is currently readying an IPO for later this year.

Broadcom is slated to report its third-quarter results on 2 September, when it has guided for revenue of $29.4 lion with AI-related work expected to triple to $16 billion year-on-year.

The company’s specialism in custom-designed kit aimed to support a single customer’s specific workload are seeing it work with several of the big participants in the AI arms race.