ASML Plans Capacity Additions: 8 Key Items Shaping the Stock Market Wednesday

These are the early headlines and other items poised to influence the market at start of trading Wednesday. As we share this collection of market drivers, U.S. equity futures point to a positive open. Following the reaction to yesterday’s softer-than-expected June CPI data, we will want to revisit equity futures once the market digests the June PPI report that will be published at 8:30 AM ET.

1. Iran said it had launched strikes at U.S. military assets in Bahrain, Kuwait and Jordan. Iran’s Islamic Revolutionary Guard Corps said earlier that they targeted weapons and storage facilities in Kuwait. (Reuters) The US launched more airstrikes on Iran on Wednesday, with President Donald Trump pledging to intensify his bombardment until Tehran stops attacking ships in the Strait of Hormuz and agrees to open the waterway… Trump pledged to bomb again on Wednesday night and continue until Iran relents… On Wednesday, the Islamic Revolutionary Guard Corps — whose navy is behind many of the threats against commercial vessels — said the strait will remain closed until the US ends its strikes and the blockade of Iranian ports. (Bloomberg)

This points to renewed fighting continuing, extending duration expectations, which are lifting oil prices this morning. While those prices are still well below levels we saw in April and May, should duration expectations expand from days to weeks, we are likely to see oil and gas prices rise further. That potential means we’ll be as focused on the July Flash PMI inflation comments next week as we are today’s June PPI data.

2. ASML Holding NV lifted its annual sales forecast for the second time this year and laid out plans to increase production as a surge in artificial intelligence spending drives demand for the Dutch company’s chip-making machines. Net sales will grow to between €43 billion ($49.2 billion) and €45 billion this year, the company said in a statement Wednesday. That is well above the €39.3 billion average estimate among analysts compiled by Bloomberg, as well as the upper end of the range of the company’s prior guidance. (Bloomberg)

What stood out to us even more than the raised outlook was the revelation that ASML (ASML) plans to increase manufacturing capacity for its EUV machines to meet a large number of orders queued up for 2028. That led ASML CEO Christophe Fouquet to share the following:

“When we look at 2028, we have received already a large number of orders from our customers for EUV. This has also invited us very strongly to investigate another 30% increase in our EUV capacity for 2028.”

Reading between the lines, this tells us that chip demand remains robust and supply constraints are poised to remain in place for some time. A very nice positive for the Portfolio’s chip positions as well as our shares of Applied Materials (AMAT).

3. Nvidia Corp. founder Jensen Huang stressed that the US company’s next-generation AI accelerator systems were in production and on track for delivery to customers, responding to reports that manufacturing snags may delay its rollout… Vera Rubin is already in production. Giant amounts of production incoming,” the Nvidia chief executive officer told reporters on the sidelines of a developer event Wednesday… Huang also reiterated his company’s readiness to ship H200s to China when approved. (Bloomberg)

Sticking with chips, these remarks from Nvidia (NVDA) CEO Jensen Huang are reassuring for its next-gen silicon, but his comment about H200s chips follows reports earlier this week that three Chinese firms had received U.S. approval to buy Nvidia’s advanced H200 processors. That follows reports in May that the U.S. cleared around 10 Chinese firms, including Alibaba (BABA), Tencent, ByteDance and JD.com (JD) to buy the Nvidia chips.

To date, Nvidia has reportedly shipped a small number of H200 chips to Chinese firms, which means those approvals could lead to larger shipments in the coming quarters. The question is when will China stop actively restricting Chinese firms from purchasing the chips? When that happens, it means revenue expectations for Nvidia would need to be revised higher. Since last year, Nvidia has excluded any potential Chinese AI chip revenue from its forecasts.

4. China’s cyberspace regulator said on ‌Wednesday that Apple’s on-device generative AI service “Apple Intelligence” has been registered for use on iPhones in the country. Apple’s intelligence services will incorporate capabilities from Baidu and Alibaba’s AI models, according to a source, who declined to be named. (Reuters)

While no launch date was given, the eventual release should help foster the iPhone upgrade cycle in China and protect its second-place position in that market, where it trails Huawei. Per data from IDC, Apple’s Q2 2026 China smartphone market share reached 18.1%, up from $13.9% in the year-ago quarter, trailing Huawei’s 22.6% share for Q2 2026. Coming up behind Apple’s in the just-completed quarter were Oppo and vivo, each with 16.0% of the market.

5. Payments start-up Stripe and private equity group Advent International have launched a joint bid to acquire New York-listed PayPal in a deal that would value the company at about $53bn. Stripe, led by brothers Patrick and John Collison, made the offer of $60.50 a share this month, said two people familiar with the matter… Any deal would be transformative for Stripe, which was valued at $159bn in a February tender offer and has been repeatedly tipped as a potential initial public offering candidate, though John Collison has said the company is in no rush to list. Adding PayPal would bring Stripe a consumer-facing checkout brand with more than 400mn users. The people familiar with the matter said Stripe and Advent intended to jointly own PayPal. (FT)

The offer price of $60.50 is a 28% premium to where PayPal (PYPL) shares closed last night. However, it is a discount compared to the $65-$70 range where the shares spent most of their time in H2 2025. That suggests we could see some back and forth between Stripe-Advent and PayPal over price. And it’s also possible that with this overture, PayPal is looking for other suitors.

Our view is any eventual transaction would likely lead to others in the space, a positive for M&A investment banking fees in the coming quarters. We’ll also say that with PayPal’s expected top-line growth of 3%-4% this year and next, well below expectations for American Express (AXP), Visa (V) and Mastercard (MA), perhaps a shake up is called for.

6. Verizon Communications is planning another round of layoffs this week, as the company seeks to reduce costs under its new CEO. The nation’s largest wireless carrier will announce the cuts on Thursday morning, according to an employee who was briefed on the plans. Barron’s couldn’t verify the number of employees that would be affected. (Barron’s)

Verizon (VZ) CEO Daniel Schulman has made cost savings a priority since he took the job last October. During an earnings call in January, Schulman said Verizon was aiming to save $5 billion in operating expenses this year, noting that a “substantial portion” of the savings would come from headcount reductions among other areas. At the end of 2025, Verizon had 89,900 employees.

The timing is ahead of Verizon’s Q2 2026 earnings release and conference call on July 24. Following comments from Jamie Dimon about AI adoption and usage inside JPMorgan Chase (JPM), it’s fair to think we will hear similar ones on Verizon’s earnings call as Schulman walks through the layoff decision and how the company plans to maintain network quality and its customer experience.

7. Economic data today per TipRanks: MBA Mortgage Application Index (Weekly), Producer Price Index (June), NY Empire Manufacturing Index (July), EIA Oil Stocks (Weekly).

8. Companies reporting today per TipRanks: AM – ASML (ASML), BlackRock (BLK), BNY Mellon (BNY), Cintas (CTAS), ConAgra (CAG), Elevance Health (ELV), Morgan Stanley (MS). PM – JB Hunt (JBHT), United Airlines (UAL).

More Pro Portfolio:

At the time of publication, TheStreet Pro Portfolio was long AMAT, AXP, MS and NVDA.