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News of the day for May 13, 2026

Stocks ended Tuesday mostly lower as chip stocks pulled back from their recent rally.
Credit: Angela Weiss / AFP / Getty Images

Stock futures are mixed Wednesday as investors await another report on inflation, while oil prices are sticking above $100 a barrel amid uncertainty about Iran peace talks; a report on wholesale prices is due this morning after consumer price data yesterday showed that inflation hit a three-year high in April; President Trump is in China along with a large group of CEOs to meet with Chinese President Xi Jinping; the Senate is expected to confirm Kevin Warsh as the new Federal Reserve chair as soon as today; and Cisco is scheduled to report earnings after the closing bell. Here's what you need to know today.

Stocks Mixed Ahead of Inflation Report, Oil Stays Above $100

Futures are pointing to a mixed open this morning for major stock indexes as investors await this week's second report on inflation and monitor developments in the Iran war. Futures tied to the S&P 500 and the Nasdaq were recently up 0.2% and 0.7%, respectively, while Dow Jones Industrial Average futures slipped 0.3%. On Tuesday, the Dow closed slightly higher, while the S&P 500 and Nasdaq each pulled back from their record closing highs set on Monday. WTI futures, the U.S. crude oil benchmark, were holding steady at around $102 per barrel amid an ongoing lack of progress in peace talks with Iran. Gold futures were up 0.5% at just above $4,700 an ounce while bitcoin, which has traded in a narrow range over the past week, was little changed at $80,500. The 10-year Treasury yield, which affects rates on a variety of consumer loans, ticked lower to 4.46%, after closing Tuesday at its highest level since last July.

Second Inflation Report of the Week Due With April PPI

Producer Price Index data for April, set for release at 8:30 a.m. ET, will show how much prices are rising at the wholesale level. Economists estimate that the index rose 0.5% in April from the previous month, unchanged from the increase in March, according to a survey of economists by Dow Jones Newswires and The Wall Street Journal. Consumer price data released Tuesday showed that inflation hit its highest level in three years last month, as soaring gas prices caused by the Iran war have started to lift prices across the economy. Federal Reserve officials are closely monitoring the impact of the war on the economy as they consider their next move on interest rates.

Trump in China With Group of CEOs in Tow

President Donald Trump is in China for a two-day meeting with Chinese President Xi Jinping. The leaders of the world's two largest economies are likely to discuss a variety of topics including trade, Taiwan, the Iran war and AI technology, per The Associated Press. A large group of some of the biggest CEOs in American business have joined Trump, including Tesla (TSLA) CEO Elon Musk, who had a dramatic split with the Trump administration last year, outgoing Apple CEO (AAPL) Tim Cook, Boeing's (BA) Kelly Ortberg, Jensen Huang of Nvidia (NVDA), and Goldman Sachs (GS) chief David Solomon.

Senate Poised to Confirm Warsh as Fed Chair

Kevin Warsh, Trump's pick to succeed Jerome Powell as Federal Reserve chair, could be confirmed for that role as soon as today, after he was confirmed by the Senate yesterday to join the Fed's board of governors. The vote for chairman is the next step to securing Powell's replacement ahead of his term expiring on Friday, though Powell has said he plans to stay on as a Fed governor until that term ends in 2028. Warsh is set to join the Fed as inflation is surging because of the Iran war, complicating the central bank's previously expected path to interest rate cuts later this year. The next Fed meeting is scheduled to come in mid-June.

Cisco Set to Report Earnings After the Closing Bell

Cisco (CSCO) is scheduled to post quarterly results after markets close today. The networking hardware provider is expected to report $15.55 billion in revenue and adjusted earnings of $1.03 per share, each rising year-over-year as the former dot-com era favorite has now become a major beneficiary of the AI boom. A key question for Cisco is how it will maintain sales growth while raising prices to offset higher memory chip costs. Investors will also be looking for the company to lift its full-year outlook, amid high expectations for continued growth. Cisco shares were little changed premarket, after closing at a fresh record of $99.29 on Tuesday.

Incoming Fed Chair Kevin Warsh may want to overhaul the system in which central bankers publish their forecasts.
Credit: Mandel NGAN / AFP via Getty Images

KEY TAKEAWAYS

• The Federal Reserve's dot plot, which shows policymakers' interest rate projections, may be overhauled or eliminated under incoming Chair Kevin Warsh.
• Critics argue the dot plot can limit the Fed's flexibility and mislead markets by treating projections as fixed forecasts.
• Some experts suggest improving the dot plot by linking interest rate projections to economic forecasts like GDP, inflation, and unemployment.

The Federal Reserve's quarterly dot plot, which markets latch onto for hints of the Fed's future moves, may undergo an overhaul under incoming Chair Kevin Warsh.

For better or worse, the dot plot gets lots of airtime at Fed meetings. That's because the dots represent where each of the Fed's 19 policymakers thinks the benchmark interest rate should be at year-end.

Headlines quickly blare out the median of those 19 forecasts—declaring whether Fed officials are leaning toward rate cuts, hikes or no changes at all.

Investors are bracing for less guidance under Warsh, who has long argued the Fed over-communicates and needs a new strategy. The dot plot can tie the Fed's hands and make them hesitant to pivot from their forecasts when needed, he said.

"The Fed tells the whole world what their dots are going to be, what their forecasts are going to be," Warsh said at a Senate hearing last month. "The Fed's human. ... They hold on to those forecasts longer than they should."

Overhauling the forecast system is far from a novel idea. Outgoing Fed Chair Jerome Powell said last month he "was never the world's biggest fan of the dot plot." The Fed has debated reworking it but couldn't land on an alternative that got broad support from the 19-member Federal Open Market Committee, he said.

The Fed started publishing the dot plot in 2012. The forecasts at the time helped the Fed communicate its intention to stick with its ultra-low rate policies to help an economy still recovering from the 2008 financial crisis.

But the dot plot’s days may be numbered under Warsh, at least in its current form.

"If he comes in with a pretty firm view about what he wants to do, I think he'll be able to actually build some agreement there," said Collin Martin, head of fixed income research and strategy at the Schwab Center for Financial Research.

The Median Dot

Any debate about the dot plot will center on one specific dot: the median.

That number is a helpful summary of Fed officials' disparate views, Martin said, but markets at times wrongly treat it as an ironclad forecast.

The most recent dot plot from March, for example, suggested the median Fed official believes one more rate cut may be in the cards in 2026. But the uncertainty around the Iran war is making any forecasts tricky—and the dot plot showed that one sizable camp of Fed officials was hesitant about rate cuts.

"Everyone harps on one cut, two cuts, one hike, two hikes, when that's a snapshot," Martin said. "The reality is, there's a lot of different views in there."

It's a point that Powell has repeatedly emphasized. In a 2019 speech, he compared the dot plot to pointillist art, where many thousands of dots combine into a coherent painting but don't say much on their own.

"If you are too focused on a few dots, you may miss the larger picture," he said.

Gauging Fed Reaction

The bigger picture is giving the public a better understanding of the Fed's "reaction function."

For example, if inflation heats up but the job market stays stable, could the Fed raise rates—and if so, how much? What if an inflation spike coincides with unemployment rising? And since the Fed has 19 members, how much do those views vary?

The dots themselves are anonymous. But the dot plot helps the public get "a sense of the overall outlook of the committee," said former Cleveland Fed President Loretta Mester, who now teaches at the Wharton School of the University of Pennsylvania.

Still, she added, the Fed should keep trying to communicate "what it is and what it isn't."

"You want to convey how policy will evolve conditional on how the economy evolves," Mester said. "That's a hard concept to convey. The dot plot, I think, is one way to do it, but it probably needs some more explanation to make it more effective."

Mester suggested one change: linking each Fed official's dot to their projections on GDP, unemployment and inflation. Right now, two Fed officials' forecasts may show agreement on interest rates, even as they have starkly different assessments of the economic outlook.

"There is no context around the participant's forecast or any risks the member sees," wrote Joseph Abate and Monty Gandhi, U.S. interest rate strategists at SMBC Nikko Securities Americas.

The Fed may opt for an approach that lays out different scenarios, they wrote. But there's a risk that a forecast overload could mean "markets may stop paying attention," they added.

Still Some Value

For all the dot plot's faults, many Fed watchers still see value in it.

Some 56% of them found it "useful or extremely useful," according to a Brookings Institution survey this year of academics and private sector Fed observers. While they thought the Fed’s post-meeting statement and Powell’s remarks were more useful, only 19% of those surveyed said the Fed should scrap the dot plot.

Removing it may not be so easy, wrote Larry Meyer, a former Fed governor and co-founder of Monetary Policy Analytics. For one, making bond investors more uncertain about the Fed's outlook may push up longer-term interest rates, making it more expensive for households and businesses to borrow.

"It might be tough to take the dots away when policymakers (and the market) are used to them," Meyer wrote.

The series of projections the Fed releases in the dot plot also helps the Fed stay accountable to the public and to Congress, said Mester, who led the Cleveland Fed from 2014 to 2024.

"I think we as the public deserve to know: What are they really thinking about how the economy is going to evolve, and what do they think is then the appropriate policy path?" Mester said.

The S&P 500 is on pace to post its best quarterly results since 2021.
Credit: Michael Nagle / Bloomberg via Getty Images

Key Takeaways

• Investors are rewarding first-quarter earnings beats less than normal and punishing misses more harshly, according to a recent FactSet Research analysis.
• Wall Street's negativity is notable considering the S&P 500 is on pace to post its best quarter since 2021.

Corporate America started 2026 with one of its best quarters in years. Traders haven't been too impressed. 

With results from most of the S&P 500 in the books, 84% of the companies have beat first-quarter earnings estimates, the largest share since the second quarter of 2021 and far exceeding the historical average. But those results have not translated into exceptional stock performance for many of those companies, according to a recent analysis by FactSet. Earnings beats have elicited an average share price increase of 1.1% two days before earnings through two days after earnings, only slightly above the five-year average of 1%. (FactSet uses a four-day window to smooth out share-price movements before the results arrive.)

Meanwhile, investors are punishing earnings misses far more harshly than normal. For companies that missed estimates, the average share price decline in that four-day window has been 4.9%, compared with a five-year average of 2.9%. 

Why This Matters to Investors

Investor sentiment is as important a driver of stock performance as a company's earnings or market conditions. Wall Street's reactions to recent earnings reports suggests sentiment is skewing negative, even as tech stocks propel the major indexes to record highs.

FactSet's data covers earnings reports through last Friday, but this week’s trading has followed that trend. Constellation Energy’s (CEG) earnings beat couldn’t prevent its stock from slipping 1% on Monday. Swiss shoemaker On Holdings (ONON) topped estimates and raised its guidance, yet its shares ticked lower Tuesday. Meanwhile, Under Armour (UAA) and Hims & Hers Health (HIMS) each plummeted double digits Tuesday after their results came up short. 

Granted, beating estimates isn’t all that matters to investors. They’re often just as interested in the magnitude of an earnings beats and, in particular, a company’s outlook. But recently the S&P 500 has been exceeding expectations on those fronts, too. In aggregate, earnings have topped expectations by more than 18%, well above average and the most in five years. The share of companies that have given disappointing guidance this quarter is well below average. Analysts, who usually decrease their future-quarter estimates as results come in, have increased them this time around.

Fuel prices are pushing up costs on all kinds of goods, as transportation costs are passed on to consumers.
Credit: Brandon Bell / Getty Images

Key Takeaways

• The war-related fuel price surge is bleeding into other prices, April's consumer price report showed.
• Economists saw evidence that inflation was already spreading to air fares, eggs, and even housing just two months into the conflict.

High gasoline prices due to the Iran war don't just hit you at the pump: the extra fuel costs are pushing up prices for everything from airfare to eggs.

Tuesday's report on April inflation from the Bureau of Labor Statistics showed a widely expected surge in fuel costs and a higher-than-expected jump in "core" prices, which exclude the volatile prices for food and energy.

What This Means For The Economy

Accelerating inflation is one of the economy's biggest stumbling blocks and could prevent the Federal Reserve from cutting interest rates anytime soon.

Economists saw red flags that the price hikes are having a ripple effect on many other prices for everyday purchases. Here's what they are saying:

Jake Krimmel, senior economist at Realtor.com:

"Airline fares rose 2.8% on the month, and apparel and household furnishings both increased, pointing to early signs that the energy shock is bleeding through into core prices via fuel costs and Strait-related supply chain disruptions ... What started as an energy story is beginning to turn into something broader, something that we've been calling inflation contagion."

Kurt Rankin, senior economist at PNC:

"The spike in fuel prices resulting from the U.S. and Israel’s conflict with Iran has already begun to bleed through to non-energy consumer categories. As fuel is necessary to move goods to market, and energy in general is necessary to run operations, it is always only a matter of time until Core CPI inflation reacts to shocks like the current oil price spike."

"Consumers ultimately pay higher prices as producers and retailers pass on their own higher costs to their customers. That process is already underway, according to the April 2026 Core CPI numbers."

David Royal, chief financial and investment officer at Thrivent:

"Grocery prices, which had actually declined last month, spiked 0.7% in April—likely reflecting increased transportation costs as a result of higher oil prices. The increase was driven almost entirely by meat, eggs, fruits and vegetables."

Preston Caldwell, chief U.S. economist at Morningstar:

"Energy is a major input into food production and transportation. Hence, rising oil prices are starting to flow through into inflation beyond the direct impact of consumer purchases of gasoline, but also via non-energy goods for which oil is an input. Another example is airline fares, which jumped 2.8% in April.

Scott Anderson, chief U.S. economist at BMO Capital Markets:

"The unfavorable and larger-than-expected jump in core prices shows pressures are now spreading beyond energy, transportation, and food, into larger categories such as services and housing. If the energy price shock doesn’t subside soon, we can expect more of the same in the months ahead."

Katherine Judge, senior economist at CIBC:

"This data only includes the first signs of broader spillover from the oil price shock into core components, and annual inflation is set to move higher in May."

Credit: Investopedia / Elizabeth Guevara

Key Takeaways

• President Donald Trump's proposal to suspend the federal gas tax could save motorists as much as 18.4 cents per gallon, but not make up for the $1.50 surge in gasoline prices since the Iran war began.
• It would take 406 days of a gas tax holiday to make up for the $28 billion in extra fuel costs motorists have paid since the conflict began.
• Gasoline could rise to a national average of $5 a gallon as soon as June if the Iran war does not end soon, one forecaster estimated.

A suspension of the federal gasoline tax would push down prices at the pump, but do little to make up for the financial damage the energy crunch has caused to household budgets since the Iran war began.

Temporarily halting the 18.4-cent-per-gallon levy—as President Donald Trump and Republican lawmakers have proposed—would save motorists some money. However, the amount would be a relative drop in the bucket. 

As of Tuesday, a gallon of regular unleaded averaged $4.49 nationwide, up from around $3 before the war, according to GasBuddy's price tracker. To put it in perspective, the gas tax would have to be suspended for 406 days just to make up for the extra $28 billion U.S. motorists have paid since the war began, Patrick DeHaan, head of petroleum analysis at GasBuddy, posted on social media Monday.

What This Means For The Economy

A temporary tax cut would fall short of solving the energy crisis caused by the Iran war, leaving at-the-pump prices well above prewar averages and continuing to drag on the economy.

Energy prices have surged because the conflict has effectively closed the Strait of Hormuz, the crucial waterway through which 20% of the world's supply of crude oil normally flows.

The spike in fuel prices is a major reason inflation accelerated in April, with consumer prices rising faster than workers' pay raises for the first time in a year. Further price hikes could be in store if Iran and the U.S. do not strike a peace deal in the coming weeks.

"If the Strait doesn't re-open soon, I believe we could see the national average price of gasoline reaching $5/gal as early as sometime in June," DeHaan wrote.

Prices are still short of the all-time high average of $5.02 reached in 2022 after the Russian invasion of Ukraine. Former President Joe Biden similarly proposed a gas tax holiday, but the idea ran aground in Congress, where it failed to gain enough support to become law.

Applied Materials shares have rallied more than 60% since the start of the year.
Credit: Cheng Xin / Getty Images

Key Takeaways

• Applied Materials' latest quarterly results are due Thursday afternoon, with the chip equipment manufacturer's stock seen potentially setting fresh highs following the report.
• Analysts expect the company will report rising revenue and profits amid strong demand for its equipment, though export restrictions to China have hampered results in recent quarters.

Applied Materials is scheduled to report quarterly earnings after the closing bell Thursday, with the chipmaking equipment manufacturer's stock seen potentially reaching new highs following the report.

Based on recent options pricing, Applied Materials (AMAT) stock is seen swinging up to 7% by the end of the week. A move of that size from Tuesday's level around $423 could lift shares to a fresh high above $455, while the low end of $391 would give back some of the stock's recent rally.

Shares of the semiconductor manufacturing equipment provider have rallied more than 60% since the start of the year, amid broad gains for tech hardware stocks and improving sentiment around the AI trade.

Why This Matters to Investors

Applied Materials' latest report could be taken as an early signal of demand for chips, and offer insights into how export restrictions to China are impacting its business.

Morgan Stanley analysts lifted their price target to $454 from $432 ahead of the report, writing that they think Applied Materials could top investors' high expectations in an earnings season that has seen other equipment makers beat estimates.

Analysts are forecasting fiscal second-quarter revenue of $7.7 billion, up 8.5% year-over-year, along with adjusted earnings of $2.67, up from $2.39 in the same quarter a year ago, according to estimates compiled by Visible Alpha.

Analysts are largely bullish on Applied Materials stock, with the 13 analysts with current ratings tracked by Visible Alpha split between 11 "buy" and two neutral ratings. Their average price target of $458 would suggest about 10% upside to its recent level.

The Investor Made Famous in 'The Big Short' Urges Stockholders to Reduce Their Exposure to the AI Rally

Michael Burry is one of a growing chorus of experts warning that the torrid tech stock rally of the past several weeks is unsustainable.
Credit: Astrid Stawiarz / Getty Images

Key Takeaways

• Michael Burry, famous for predicting the 2008 housing market crash, warned investors in a series of recent Substack posts about unsettling similarities between today's market and the lead up to the Dotcom crash in 2000.
• Burry and other experts worried about a bubble advise against shorting tech stocks, and instead encourage investors to derisk and diversify their portfolios.

Bulls may be in the driver’s seat on Wall Street, but a notable bear in the back seat is piping up. 

Michael Burry, of “The Big Short” fame, over the weekend urged investors to “reject greed” and trim their exposure to the blistering AI rally. “For any stocks going parabolic reduce positions almost entirely,” wrote Burry in a Substack post on Sunday.

Stocks have been on a tear since late March, with semiconductor and memory stocks leading the charge. The PHLX Semiconductor Index (SOX) rose nearly 70% between late March and Monday’s close as investors piled into the stocks of AI’s "pick and shovel" makers. Shares of Intel (INTC) and Micron (MU) tripled and doubled, respectively, in the last month and a half. (Chip stocks led a broad pullback on Tuesday after a report showed inflation surged in April.)

Why This Is Important

Burry is one of a growing chorus of experts warning that the torrid tech stock rally of the past several weeks is unsustainable. Notably, the AI rally has inspired Dotcom Bubble comparisons before, but bearish prognoses have yet to play out.

Burry has been warning about Wall Street’s euphoria for some time. On Friday, he wrote on Substack that the latest rally was “feeling like the last months of the 1999-2000 bubble.” Seasoned investors remember how that went. Many investors and companies were wiped out when the Dotcom Bubble burst in March 2000, and even those that survived bore scars for decades. Shares of Intel and Cisco (CSCO), two darlings of the Dotcom Era, took more than a quarter of a century to fully recover from the crash. 

“Stocks are not up or down because of jobs or consumer sentiment,” Burry wrote. “They are going straight up because they have been going straight up. On a two letter thesis that everyone thinks they understand.”

Burry isn’t alone making the Dotcom Bubble comparison. According to a note from Bespoke Investment Group, chip stocks traded 33% above their 50-day moving average on Monday, “a level only hit three other times: December 1998, March 2000, and November 2002.” Jeff DeGraaf, CEO of Renaissance Macro, informed clients last week that the SOX index triggered a warning signal that's gone off only three other times in the last 30 years: 1996, 2000 and 2022.

The million dollar question for investors: Is it 1996, the early innings of the Dotcom boom; 2000, the peak before a complete meltdown; or 2022, the precursor to a comparatively modest 30% pullback? Bubbles “don’t ring a bell at the top,” said DeGraaf, who warned investors against heeding bubble warnings as a sell signal. “The right call is to actually wait for the deterioration and sell on the way down, not on the way up,” said DeGraaf. 

Burry, famous for shorting the housing market before the 2008 crash, warned against shorting tech stocks. “Right now it is expensive, in general, to buy put options and directly shorting stocks can still cause significant pain,” he wrote on Sunday. Instead, he says investors should cut back on risk, selling high-flying stocks to take advantage of opportunities down the line. 

“History tells us that even if the party goes on for another week, month, three months or year, the resolution will be to much lower prices,” he wrote. “The idea is to raise cash, and prepare to put it to work when it makes more sense to do so.”

One investor and longtime Musk supporter says SpaceX could be "the largest company on the planet."
Credit: Manuel Mazzanti / NurPhoto via Getty Images

Key Takeaways

• Ron Baron, chief of Baron Capital and a longtime supporter of Elon Musk, said he's been a buyer of SpaceX's private shares since 2017.
• Baron thinks the company's market capitalization could swell to $10 trillion—and beyond—in the 10 or 15 years after it goes public.

One billionaire investor—and longtime Elon Musk supporter—is just about all-in on SpaceX.

That bet could pay off big should the company, expected to launch its IPO this year, land on public markets as expected. Ron Baron, chief of Baron Capital, said his firm's stake in SpaceX accounts for a little more than a quarter of the asset manager's almost $56 billion in assets under management, or roughly $15 billion. (It also has $5 billion in Tesla (TSLA), the carmaker turned robotics company.) After Musk's rocket company goes public—it is reportedly seeking a valuation at or above $1.75 trillion valuation and aims to raise over $75 billion—Baron reckons it will become "the largest company on the planet," he said in an interview with CNBC on Tuesday.

SpaceX's IPO, reportedly codenamed "Project Apex," could land as soon as June. It will likely be closely watched by institutional and retail investors alike. Major index providers are changing their rules, or in the process of changing them, to fast-track mega IPOs into the likes of the S&P 500 and the Nasdaq Composite. All this, of course, stands to make Musk, a major shareholder; Tesla shareholders; and even the market as a whole richer.

WHY THIS MATTERS TO YOU

Mega IPOs like SpaceX as well as anticipated offerings from OpenAI and Anthropic could help the stock market continue its climb.

Baron on Tuesday told CNBC that his initial $1.7 billion investment in the rocket maker in 2017 is worth $15 billion at current market prices. Baron Capital, he said, is "one of the largest, if not the largest" buyer of the rocket maker's shares, participating in its twice-a-year tender offers, which see demand outstrip supply. "They get oversubscribed without any announcements and no bankers in one afternoon," Baron said.

If that applies to SpaceX's IPO, the company's shares will likely pop on their debut. Between the company's ambitions to launch reusable rockets, and deploy space-based AI data centers, Baron said the company could be worth between $10 trillion and $30 trillion over the next 10 to 15 years—what he says could be a "very low" estimate of its potential value.

Musk, estimated to own a 43% stake in SpaceX in February, stands to gain in more ways than one as the rocket maker's market capitalization grows. The company is said to have approved a plan in March—when the company confidentially filed for its IPO—that would award the CEO 60 million shares if the company's market capitalization climbs from $1.1 trillion to $6.6 trillion, with the stock vesting in $500 billion increments, according to The Information. Nvidia (NVDA), currently the world's most valuable public company, has a $5.3 trillion market capitalization at recent prices.

Baron believes SpaceX’s market value could get a post-IPO boost from accelerated membership in major benchmark indexes. That inclusion might also please index investors who might like to see it—and other hot expected IPOs—in the popular index funds in which many of them put their money.

Even with Tuesday's gains, Wendy's shares are still down about 7% since the start of the year.
Credit: Mike Campbell / NurPhoto / Getty Images

Key Takeaways

• Wendy's shares rallied Tuesday following a report that longtime investor Nelson Peltz is in talks with other investors for a potential offer to take Wendy's private.
• The fast food giant has struggled in recent years, with shares losing nearly 70% of their value through Monday's close amid sales declines and high costs.

Signs a longterm investor could take Wendy's private are sending the fast food giant's stock soaring.

Wendy's (WEN) shares were up over 15% in recent trading, following a Financial Times report that activist investor Nelson Peltz and his hedge fund, Trian Fund Management, are in talks with other investors about assembling a potential offer to take Wendy's private.

Through Monday's close, Wendy's shares were down about 40% over the past year, and nearly 70% for the last five years as high costs have eaten into Wendy's margins and inflation has driven some Americans away from fast food. Wendy's also lost its CEO last summer, when Kirk Tanner left the company to take the top job at Hershey (HSY), with CFO Ken Cook still serving as interim CEO.

Trian said in a February filing that it believed Wendy's was "undervalued," and was considering its options, including making an offer to take Wendy's private or selling down its stake. In a statement responding to the filing, Wendy's said it would consider proposals.

Trian declined to comment on the report, and Wendy's did not immediately respond to an Investopedia request for comment.

Why This Matters to Investors

The report that Peltz is considering an offer to take Wendy's private would suggest he and Trian still see untapped value in Wendy's that they could unlock.

Peltz and fellow Trian partner Peter May each own about 16% of Wendy's shares, while Trian itself also has smaller stakes, according to the February filing, and the fund has been involved with activist campaigns targeting Wendy's previously dating back to 2005. May and one of Peltz's sons currently serve on Wendy's board.

In the last year, some Wendy's rivals such as McDonald's (MCD) have had success winning back customers with value-focused promotions. Last week, Wendy's said its "Fresh Start" turnaround effort is progressing as it reported better-than-expected revenue and profits, while its same-restaurant sales declined more than expected.

JPMorgan analysts downgraded Wendy's stock Monday to an "underweight" rating, citing the sinking same-restaurant sales, a "lack of direction around company’s future with no permanent leadership," and a belief that Wendy's is behind rivals in focusing on value.

Even with Tuesday's gains, Wendy's shares are still down about 7% since the start of the year.

eBay shares were lifted by GameStop's takeover offer last week, while the retailer's stock fell after making the offer.
Credit: Samuel Boivin / NurPhoto / Getty Images

Key Takeaways

• eBay rejected GameStop's $55.5 billion takeover offer, calling the proposal "neither credible nor attractive."
• The online auction platform said it had several concerns about the deal, including GameStop's financing plans.

If GameStop really wants to buy eBay, it's not going to be easy.

Early this morning, eBay (EBAY) rejected last week's $55.5 billion takeover offer from GameStop (GME), writing that it found the video game retailer's offer "neither credible nor attractive."

In a letter to GameStop CEO Ryan Cohen, eBay's board chairman Paul Pressler wrote that the online auction platform weighed several concerns in rejecting the offer, including eBay's potential as a standalone business, uncertainty over how GameStop would finance the takeover, and the "leverage, operational risks, and leadership structure" a combined business would involve. GameStop did not immediately respond to a request for comment.

GameStop shares were down about 2% in recent trading following the news, while eBay shares were little changed.

Why This Matters to Investors

Cohen has said that he would take GameStop's offer directly to shareholders if necessary. GameStop also has the option of launching a proxy fight to get new members elected to eBay's board in support of the deal.

GameStop has faced a number of questions about the offer after it was announced, including how it would pay for the deal, and about the strategic rationale of combining the two companies, with Cohen declining to provide much information about how the deal would be financed in an appearance on CNBC.

Cohen listed several items for sale on eBay in the days following the offer, and has criticized the company's performance and board in social media posts in the last week.

For the year, GameStop shares are up about 12%, while eBay stock has gained more than 20%.