Cloudflare’s Huge Endorsement: 8 Key Items Shaping the Stock Market Friday

These are the early headlines and other items poised to influence the market at the start of trading Friday. As we share this collection of market drivers, U.S. equity futures point to a positive start to trading as we close out the week. With the July Employment Report coming at 8:30 AM ET, be sure to revisit those futures as the market digests that data. To get ready for it, be sure read item 2 below.

1. US President Donald Trump said negotiations between Iran and Oman over the Strait of Hormuz are “moving along,” despite some Iranian lawmakers seeking to bar American and Israeli ships from the waterway. (Bloomberg). To reach a deal with Iran that reopens the economically vital Strait of Hormuz, President Donald Trump may need to do something out of character — compromise. (AP News) Oil prices edged lower on Friday as investors weighed signals that Gulf states and Iran were closing in on a deal to reopen the Strait of Hormuz under ‌a temporary arrangement aimed at allowing for broader talks to bring the Iran war to a close. (Reuters)

While we’ve moved past the Tuesday-Wednesday dates for a deal mentioned by President Trump and Treasury Secretary Scott Bessent, the market remains hopeful for getting things back on track in the near term. Let’s remember, though, that such a deal is expected to be temporary, essentially putting us back where we were earlier this year with the MOU. To us the barometer to watch remains the volume of traffic passing through the Strait and the impact on oil and petrochemical prices, and supply chains. While hopeful for a lasting resolution, we will let the data dictate our actions.

2. July is set to deliver another month of steady job growth, which will keep Federal Reserve officials squarely focused on persistent inflation. The Bureau of Labor Statistics will publish July employment data on Friday at 8:30 a.m. Eastern. Economists surveyed by FactSet expect employers added 95,000 jobs last month after payrolls advanced by just 57,000 in June. The national unemployment rate is expected to remain steady at 4.2%, the same level as June, according to FactSet. But the Chicago Fed’s real-time unemployment rate forecast estimate is for 4.1% in July. (Barron’s)

Given the lumpiness of month-to-month jobs figures, when we put the July Employment Report through its paces, we’ll be examining it through the lens of a three-month moving average and compare it against the 111,000 figure for June. What we’ll be looking for in that figure as well as any revisions for prior months is anything that might challenge a stable labor market and keep the Fed on the monetary policy sidelines, especially as Treasury yields have moved higher over the last month.

3. Cloudflare Inc. gave a forecast for profit this year that topped Wall Street’s estimates, suggesting that demand for networking services continued to accelerate amid rapid adoption of artificial intelligence. (Bloomberg)

We’ll get a bit more granular by sharing a comment from Cloudflare (NET) CEO Matthew Prince made during last night’s earnings conference call:

“For the first time in human history, in Q2, more than 50% of the traffic flowing across Cloudflare’s network was not human. The number of requests on our network from AI agents continues to grow unabated. With the web shifting from human-driven browsing to AI-answer engines and agent-driven commerce, we are witnessing a fundamental rewrite of the Internet for machine-to-machine traffic.“

According to Cloudflare, nonhuman traffic passing human traffic happened in May. At the end of 2025, the Cloudflare team didn’t expect that to happen until the second half of 2027. We interepret this as very big signal for the Portfolio’s holdings in Marvell (MRVL), Broadcom (AVGO), Nvidia (NVDA) and Arista Networks (ANET). It also puts some color around hyperscaler comments about ongoing capacity constraints despite ramping capex levels.

4. SK Hynix Inc. plans a 54 trillion won ($38 billion) expansion of its chipmaking facilities in South Korea, adding to efforts to rapidly double its production capacity and ease a global shortage of memory chips. (Bloomberg) Tesla and SpaceX said Thursday that “Terafab,” the advanced chip factory they are jointly developing, will be built in Grimes County, Texas, outside Houston, and that they will make an initial investment of $16.8 billion in the project… SpaceX alone has suggested in filings that it may spend as much as $119 billion on the project across a “multi-phase” construction plan — although the company didn’t talk about Terafab at all on its first earnings call earlier this week. (TechCrunch)

These and other capex comments made so far during the current earnings season bode well for quarterly earnings and guidance from Applied Materials (AMAT) next week. We’re also seeing reports that the delivery lead time for semiconductor equipment delivery has extended, with TrendForce noting that equipment that normally took six months to deliver, now requires a wait of up to a year. We read that as a favorable environment for pricing activity at Applied. This makes us even more pleased with our move to pick up AMAT shares at $485 on July 30.

5. Dream Finders Homes said on Friday it would acquire peer Beazer Homes in an all-cash deal worth ‌about $2.2 billion, including debt, as it looks to scale up and become the sixth-largest U.S. homebuilder in a challenging housing market. The acquisition comes as the industry faces demand pressures from elevated mortgage rates, affordability concerns and economic uncertainty, prompting companies to seek scale and efficiencies through consolidation. (Reuters)

We see this development between Dreams Finders Homes (DFH) and Beazer Homes (BZH) as a positive one for the U.S. homebuilding industry. In the past, a pick up in M&A activity in the housing market has accelerated near a bottom in that market as larger companies look to enter new markets or offer different products.

This joining of Dreams and Beazer follows Taylor Morrison being acquired by Berkshire Hathaway (BRK.B), Tri Pointe Homes by Sumitomo Forestry (SMFRF), and United Homes Group and Holiday Builders by Stanley Martin Homes, which is owned by Daiwa House Group. Findings from the National Association of Homebuilders suggest we could see further M&A activity — the share of builders who have been approached for an acquisition and/or merger doubled between August 2025 and June 2026, from 9% to 18%.

As those homebuilders look to wring costs of the acquired business, we see that as an opportunity for the structural building products business at Portfolio holding Builders FirstSource (BLDR).

6. Airbus said it had delivered 67 planes in July, unchanged from the same month last year and bringing the total for the year so far to 418 jets following a slow start. CEO Guillaume Faury said last week that the wording of the company’s target of “around 870” aircraft was consistent with deliveries up to 890 units. Sources have said the company is internally pushing staff to achieve more than 900 ‌deliveries. (Reuters)

The math tells us that for Airbus (EADSY) to deliver “around 870” aircraft this year, following 418 delivered in the first seven months of 2026, it will need to average ~90 deliveries in the remaining five months of the year. Even if we give the “around 870” target a wider bandwidth, call it 850-890 aircraft, at that lower end it means Airbus would need to up its average deliveries to ~86 per month in the remainder of the year.

It’s that increase in aircraft demand we aim to capture with the Portfolio’s position in Boeing (BA) as well as Eaton’s (ETN) aerospace business. Boeing will release its July deliveries next week, and the read-through should give us a firmer picture on delivery prospects in H2 2026 when measured against the company’s 2026 target of 500 737 aircraft and 90 to 100 787 Dreamliners.

7. Economic data today per TipRanks: Employment Report (July), Consumer Credit (June).

8. Companies reporting today per TipRanks: AM – Construction Partners (ROAD), Fluor (FLR), Oklo (OKLO), Spectrum Brands (SPB), Take-Two (TTWO), Under Armour (UAA), Wendy’s (WEN).

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At the time of publication, TheStreet Pro Portfolio was long AMAT, ANET, AVGO, BA, BLDR, ETN, MRVL, and NVDA.