Wall Street Major Indices Rise Amid Fed Chair Swearing In
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 56 minutes ago
0mins
Source: seekingalpha
- Analyst Rating Changes: Morgan Stanley upgraded Lam Research (LRCX) from Equal-weight to Overweight, raising the price target from $293 to $331, anticipating an 8 percentage point outperformance in 2024, highlighting the company's long-term growth potential in the semiconductor sector.
- Cybersecurity Upgrade: B. Riley upgraded Zscaler (ZS) from Neutral to Buy, despite lowering the price target to $225, as analysts believe the adoption of AI technology will provide a positive tailwind for Zscaler, even amid market concerns about its future.
- Texas Instruments AI Boost: Seaport Research Partners upgraded Texas Instruments (TXN) from Neutral to Buy with a price target of $400, expecting that the growing demand for power will significantly enhance the growth and margin profile of the analog semiconductor market driven by AI.
- Aluminum Industry Outlook: UBS upgraded aluminum producer Alcoa (AA) from Neutral to Buy, raising the price target to $80, as expected smelter outages due to the ongoing Middle East conflict are likely to support aluminum prices and premiums, despite near-term demand risks.
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Analyst Views on AA
Wall Street analysts forecast AA stock price to fall
8 Analyst Rating
2 Buy
4 Hold
2 Sell
Hold
Current: 66.270
Low
38.00
Averages
57.63
High
78.00
Current: 66.270
Low
38.00
Averages
57.63
High
78.00
About AA
Alcoa Corporation is a vertically integrated aluminum company comprised of bauxite mining, alumina refining, aluminum production (smelting and casting), and energy generation. The Company's operations are comprised of two business segments: Alumina and Aluminum. The Alumina segment primarily consists of its bauxite mines and alumina refineries, and its operations include the mining of bauxite and other aluminous ores, as well as the refining, production, and sale of smelter grade and non-metallurgical alumina. The alumina produced by this segment is sold primarily to internal and external aluminum smelter customers; a portion of the alumina is sold to external customers who process it into industrial chemical products. The Aluminum segment consists of the Company's aluminum smelting and casting operations along with the Company's energy production assets in Brazil, Canada, and the United States. It has direct and indirect ownership of over 25 operating locations across eight countries.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
Wall Street Major Indices Rise Amid Fed Chair Swearing In
- Analyst Rating Changes: Morgan Stanley upgraded Lam Research (LRCX) from Equal-weight to Overweight, raising the price target from $293 to $331, anticipating an 8 percentage point outperformance in 2024, highlighting the company's long-term growth potential in the semiconductor sector.
- Cybersecurity Upgrade: B. Riley upgraded Zscaler (ZS) from Neutral to Buy, despite lowering the price target to $225, as analysts believe the adoption of AI technology will provide a positive tailwind for Zscaler, even amid market concerns about its future.
- Texas Instruments AI Boost: Seaport Research Partners upgraded Texas Instruments (TXN) from Neutral to Buy with a price target of $400, expecting that the growing demand for power will significantly enhance the growth and margin profile of the analog semiconductor market driven by AI.
- Aluminum Industry Outlook: UBS upgraded aluminum producer Alcoa (AA) from Neutral to Buy, raising the price target to $80, as expected smelter outages due to the ongoing Middle East conflict are likely to support aluminum prices and premiums, despite near-term demand risks.
See More
US Stocks Close Higher as Market Sentiment Improves
- Market Recovery: The S&P 500 rose by 0.37% and the Nasdaq 100 by 0.42%, with the Dow Jones Industrial Average hitting an all-time high, reflecting optimism about a potential US-Iran peace deal that could boost investor confidence.
- Consumer Sentiment Decline: The University of Michigan's consumer sentiment index was revised down to a record low of 44.8, below the expected 48.2, indicating growing concerns among consumers about the economic outlook, which may impact future spending.
- Rising Inflation Expectations: The 1-year inflation expectations for May were revised upward to 4.8%, exceeding the expected 4.6%, potentially prompting the Federal Reserve to consider interest rate hikes in upcoming meetings, which could pressure the stock market.
- Tech Stocks Lead Gains: Workday's stock surged over 5% after reporting Q1 adjusted EPS of $2.66, surpassing expectations, highlighting strong performance in the software sector and potentially attracting more investor interest in tech stocks.
See More
Walmart and Alcoa Options Trading Volume Surges
- Walmart Options Surge: Walmart's options trading volume reached 195,209 contracts today, representing approximately 19.5 million shares, which is 105.7% of its average daily trading volume over the past month, indicating strong market interest in its future performance.
- High Strike Price Interest: Among Walmart's options, the $121 strike call option expiring on May 22, 2026, saw 11,670 contracts traded, representing about 1.2 million shares, reflecting investor expectations for a price increase.
- Alcoa Options Activity: Alcoa's options trading volume today was 39,167 contracts, equivalent to approximately 3.9 million shares, which is 100.6% of its average daily trading volume over the past month, showing market interest in the aluminum sector's outlook.
- Alcoa High Strike Price: For Alcoa, the $100 strike call option expiring on September 18, 2026, had a trading volume of 10,157 contracts, representing about 1.0 million shares, indicating investor confidence in a rebound in aluminum prices.
See More
Alcoa Upgraded to Buy by UBS Amid Supply Disruptions
- Rating Upgrade: UBS upgraded Alcoa's rating from Neutral to Buy and raised the price target from $75 to $80, anticipating that smelter outages due to the Middle East conflict will offset near-term demand risks, thereby supporting strong aluminum prices and premiums.
- Supply Disruption Impact: Analyst Daniel Major expects over 3 million tons of supply disruption in the Middle East to significantly counteract lower alumina prices, leading to sustained increases in aluminum prices and premiums over the next year or two, regardless of when flows through the Strait of Hormuz resume.
- Optimistic Financial Outlook: Major forecasts sequential growth in Alcoa's EBITDA and free cash flow in Q2, with potential to exceed 2027 consensus estimates, while also projecting net debt reduction below the $1 billion to $1.5 billion target range through potential divestments, paving the way for buybacks in H2 2026.
- Attractive Valuation: Major views Alcoa's valuation as appealing at approximately 4.5x estimated 2027 EV/EBITDA, asserting that sustainable LME prices and premiums, along with increased cash returns, will drive a re-rating of the company's shares.
See More
Aluminum Prices Set to Soar to 50-Year Highs Amid Supply Shock
- Supply Shock Impact: The U.S.-Iran conflict is causing aluminum inventories to plummet to all-time lows, with analyst Wenyu Yao labeling this as the most bullish setup for aluminum in over 50 years, forecasting an average price of $4,000 per metric tonne in H2 2026, which is nearly 12% higher than Monday's closing price on the London Metal Exchange.
- Market Imbalance: The closure of the Strait of Hormuz by Iran has disrupted global oil supplies and trapped Middle Eastern aluminum shipments, leading Yao to assert that the aluminum market no longer requires high demand to sustain elevated prices due to the scale of supply issues, with an expected deficit of 2.7 million tonnes this year even under sluggish demand conditions.
- Trading Recommendations: Citi advises investors to go long on the December 2026 London Metal Exchange aluminum contract and to engage in long calls at a $3,300 strike and short calls at a $3,600 strike on the same contract, despite the inherent risks of futures trading, Yao believes the current price trajectory of aluminum is unlikely to change, which could favor these trades.
- Market Performance Analysis: As of 2026, the State Street SPDR S&P Metals & Mining ETF (XME) has only risen nearly 7%, while aluminum producer Alcoa has gained nearly 21% during the same period, indicating strong performance in the aluminum market, with Yao suggesting that while short-term volatility may pressure prices, the downside appears increasingly limited outside of a severe recession.
See More
Alcoa Capitalizes on Rising Aluminum Prices with Strategic Options Trading
- Aluminum Price Surge: Driven by geopolitical tensions in the Middle East and tightening global supply, LME aluminum prices have reached four-year highs, creating a favorable market environment for Alcoa that is expected to boost company performance.
- Investment Strategy: By executing a June $70 buy-write strategy, investors can purchase Alcoa shares at $62.50 and sell call options at $1.80, optimizing returns while managing volatility, with a maximum gain potential of $930.
- Financial Strength: Alcoa aims to reduce its debt from $2.5 billion to between $1 billion and $1.5 billion while investing $65 million in its low-carbon smelter in Norway, demonstrating a commitment to improving financial health and sustainability.
- Market Challenges: Despite strong performance in the aluminum segment, Alcoa's alumina segment reported a negative EBITDA of $40 million due to global price pressures and rising energy costs, highlighting challenges faced in diversifying its business.
See More
Wall Street Major Indices Rise Amid Fed Chair Swearing In
- Analyst Rating Changes: Morgan Stanley upgraded Lam Research (LRCX) from Equal-weight to Overweight, raising the price target from $293 to $331, anticipating an 8 percentage point outperformance in 2024, highlighting the company's long-term growth potential in the semiconductor sector.
- Cybersecurity Upgrade: B. Riley upgraded Zscaler (ZS) from Neutral to Buy, despite lowering the price target to $225, as analysts believe the adoption of AI technology will provide a positive tailwind for Zscaler, even amid market concerns about its future.
- Texas Instruments AI Boost: Seaport Research Partners upgraded Texas Instruments (TXN) from Neutral to Buy with a price target of $400, expecting that the growing demand for power will significantly enhance the growth and margin profile of the analog semiconductor market driven by AI.
- Aluminum Industry Outlook: UBS upgraded aluminum producer Alcoa (AA) from Neutral to Buy, raising the price target to $80, as expected smelter outages due to the ongoing Middle East conflict are likely to support aluminum prices and premiums, despite near-term demand risks.
See More
US Stocks Close Higher as Market Sentiment Improves
- Market Recovery: The S&P 500 rose by 0.37% and the Nasdaq 100 by 0.42%, with the Dow Jones Industrial Average hitting an all-time high, reflecting optimism about a potential US-Iran peace deal that could boost investor confidence.
- Consumer Sentiment Decline: The University of Michigan's consumer sentiment index was revised down to a record low of 44.8, below the expected 48.2, indicating growing concerns among consumers about the economic outlook, which may impact future spending.
- Rising Inflation Expectations: The 1-year inflation expectations for May were revised upward to 4.8%, exceeding the expected 4.6%, potentially prompting the Federal Reserve to consider interest rate hikes in upcoming meetings, which could pressure the stock market.
- Tech Stocks Lead Gains: Workday's stock surged over 5% after reporting Q1 adjusted EPS of $2.66, surpassing expectations, highlighting strong performance in the software sector and potentially attracting more investor interest in tech stocks.
See More
Walmart and Alcoa Options Trading Volume Surges
- Walmart Options Surge: Walmart's options trading volume reached 195,209 contracts today, representing approximately 19.5 million shares, which is 105.7% of its average daily trading volume over the past month, indicating strong market interest in its future performance.
- High Strike Price Interest: Among Walmart's options, the $121 strike call option expiring on May 22, 2026, saw 11,670 contracts traded, representing about 1.2 million shares, reflecting investor expectations for a price increase.
- Alcoa Options Activity: Alcoa's options trading volume today was 39,167 contracts, equivalent to approximately 3.9 million shares, which is 100.6% of its average daily trading volume over the past month, showing market interest in the aluminum sector's outlook.
- Alcoa High Strike Price: For Alcoa, the $100 strike call option expiring on September 18, 2026, had a trading volume of 10,157 contracts, representing about 1.0 million shares, indicating investor confidence in a rebound in aluminum prices.
See More
Alcoa Upgraded to Buy by UBS Amid Supply Disruptions
- Rating Upgrade: UBS upgraded Alcoa's rating from Neutral to Buy and raised the price target from $75 to $80, anticipating that smelter outages due to the Middle East conflict will offset near-term demand risks, thereby supporting strong aluminum prices and premiums.
- Supply Disruption Impact: Analyst Daniel Major expects over 3 million tons of supply disruption in the Middle East to significantly counteract lower alumina prices, leading to sustained increases in aluminum prices and premiums over the next year or two, regardless of when flows through the Strait of Hormuz resume.
- Optimistic Financial Outlook: Major forecasts sequential growth in Alcoa's EBITDA and free cash flow in Q2, with potential to exceed 2027 consensus estimates, while also projecting net debt reduction below the $1 billion to $1.5 billion target range through potential divestments, paving the way for buybacks in H2 2026.
- Attractive Valuation: Major views Alcoa's valuation as appealing at approximately 4.5x estimated 2027 EV/EBITDA, asserting that sustainable LME prices and premiums, along with increased cash returns, will drive a re-rating of the company's shares.
See More
Aluminum Prices Set to Soar to 50-Year Highs Amid Supply Shock
- Supply Shock Impact: The U.S.-Iran conflict is causing aluminum inventories to plummet to all-time lows, with analyst Wenyu Yao labeling this as the most bullish setup for aluminum in over 50 years, forecasting an average price of $4,000 per metric tonne in H2 2026, which is nearly 12% higher than Monday's closing price on the London Metal Exchange.
- Market Imbalance: The closure of the Strait of Hormuz by Iran has disrupted global oil supplies and trapped Middle Eastern aluminum shipments, leading Yao to assert that the aluminum market no longer requires high demand to sustain elevated prices due to the scale of supply issues, with an expected deficit of 2.7 million tonnes this year even under sluggish demand conditions.
- Trading Recommendations: Citi advises investors to go long on the December 2026 London Metal Exchange aluminum contract and to engage in long calls at a $3,300 strike and short calls at a $3,600 strike on the same contract, despite the inherent risks of futures trading, Yao believes the current price trajectory of aluminum is unlikely to change, which could favor these trades.
- Market Performance Analysis: As of 2026, the State Street SPDR S&P Metals & Mining ETF (XME) has only risen nearly 7%, while aluminum producer Alcoa has gained nearly 21% during the same period, indicating strong performance in the aluminum market, with Yao suggesting that while short-term volatility may pressure prices, the downside appears increasingly limited outside of a severe recession.
See More
Alcoa Capitalizes on Rising Aluminum Prices with Strategic Options Trading
- Aluminum Price Surge: Driven by geopolitical tensions in the Middle East and tightening global supply, LME aluminum prices have reached four-year highs, creating a favorable market environment for Alcoa that is expected to boost company performance.
- Investment Strategy: By executing a June $70 buy-write strategy, investors can purchase Alcoa shares at $62.50 and sell call options at $1.80, optimizing returns while managing volatility, with a maximum gain potential of $930.
- Financial Strength: Alcoa aims to reduce its debt from $2.5 billion to between $1 billion and $1.5 billion while investing $65 million in its low-carbon smelter in Norway, demonstrating a commitment to improving financial health and sustainability.
- Market Challenges: Despite strong performance in the aluminum segment, Alcoa's alumina segment reported a negative EBITDA of $40 million due to global price pressures and rising energy costs, highlighting challenges faced in diversifying its business.
See More
