Industrial and engineering giant Fluor reports quarterly earnings this morning, and if they’re anything like the last go-round, Wall Street might be due for more disappointment.

But there’s reason to believe the sagging company may finally have some wind in its sails. Slowly but surely, the seemingly decade-long bipartisan push to reshore US manufacturing is starting to show up in the data.

Manufactured Consent

US manufacturing activity expanded at the fastest pace since May 2022 this July, according to the latest Institute for Supply Management data earlier this week. The gauge has now registered growth every month so far this year, after getting stuck in a prolonged contraction phase in all but two months going back to October 2022. New order growth increased as well. “My gut is, it’s not just a one- or two-month trend,” Susan Spence, chair of the ISM Manufacturing Business Survey Committee, told reporters on Monday. “Companies are seeing six or more months of these solid demand factors going in the right direction.”

The difference between this summer and earlier this year is that manufacturing headcount is finally increasing too; employment in the manufacturing sector jumped for the first time since September 2023. Behind the boom, among several factors, is the massive artificial intelligence data center buildout, which also gave Caterpillar a boost in its earnings call earlier this week.

The only thing standing in the way of a continued manufacturing rebound? Surprise, surprise, it’s inflation:

• The ISM’s pricing index for inputs rang in at 71.1 (anything above 50 equates to price growth). That’s the lowest figure of the past five months, but still a marked step up from where it stood at the beginning of the year; in January, it registered at 59.
• Survey respondents reported price increases for all sorts of inputs, including memory components (though we could’ve told you that one). Meanwhile, manufacturers reported a scarce supply of aluminum and copper, as well as rare earth components.

“Geopolitical drama is creating mayhem, which means that the economy could grow faster if political headwinds go away. Conditions in the metals market remain unusually unsettled, with ongoing volatility and supply-chain distortions creating an environment that many view as even more challenging to navigate than the disruptions experienced during the pandemic,” Jeffrey Roach, chief economist for LPL Financial, wrote in comments this week seen by The Daily Upside.

Fluor Square: Supply chain disruptions are expected to continue weighing on Fluor when it reports today. In its last quarter, the manufacturing revival had not yet caught up with the company; revenue of $3.6 billion was off 8% year-over-year, and its profit of 14 cents a share was more than 70% short of analysts’ expectations. That’s industrial strength ouch.

Sudden high fever? Chills? Muscle or body aches? Tiredness, dry coughing, sore throat, a headache? You might have the flu. And Moderna might have its next customer.

The company clinched a hard-won victory after the US Food and Drug Administration approved the use of its mRNA flu vaccine in adults aged 50 and up. All it took was an at-times contentious, seven-month-long regulatory process. Now, Moderna is set up to prove whether its mRNA-based portfolio will become more than a pandemic-era, one-trick financial pony.

The Need for Approval

What’s so great about mFlusiva? Like Moderna’s mRNA-based COVID-19 vaccines, it delivers instructions straight to your body’s cells on how to make a harmless viral protein that can be used to train your immune system to attack viruses. Because they use a synthetic genetic code, mRNA vaccines can be updated quickly to combat variant strains, unlike traditional vaccines, which take weeks to grow in eggs or cell cultures.

Before this week’s approval, which arrived late Wednesday, mFlusiva had to contend with its own fight. In February, Vinay Prasad, then the head of the FDA’s vaccine program, unilaterally blocked Moderna’s application over the objection of agency scientists before backing off a week later on the condition of a new study for people 65 and older. The FDA’s sign-off was based on a trial involving more than 40,000 adults 50 and up that found the shot 26.6% more effective than a standard flu vaccine. Approval in hand, mFlusiva is now positioned to compete with traditional flu vaccines from AstraZeneca, CSL, GSK, Sanofi and Seqirus in a market where tens of millions of annual vaccines represent billions in annual sales. However, Moderna will have to wait at least a year for a meaningful payoff:

• The company says it expects to have mFlusiva ready for the upcoming 2026-2027 flu season, which runs from roughly October to May.
• It’s not as easy as being ready. Seasonal vaccine sales rely on advance commercial contracting with healthcare providers, pharmacies and distributors, which is why Wall Street doesn’t think Moderna will make any meaningful mFlusiva sales until the 2027-28 flu season. In fact, shares of the pharma giant fell 4.26% on Thursday.

Pipeline Promise: Moderna’s stock is up 74.5% in 2026, and the optimist’s case rests on treatments in the pipeline like a combination therapy for skin cancer in partnership with Merck that has performed well in studies. Meanwhile, the European Union approved its first-of-its-kind COVID and flu combination vaccine in April.

Beneath the obvious AI hyperscaler stocks — Meta, Nvidia and so on — lies another layer of trades: the energy companies providing the power AI needs to, for instance, edit your ex out of the family photo.

Vistra, one of the leading US power generators, reports this morning as it builds out capacity to meet the demand of AI giants. Rival power provider Constellation Energy meanwhile boosted its forecast for the year yesterday after reporting $7.5 billion in second-quarter sales.

Data Centers’ Power Deficit

US power use is expected to keep notching record highs in 2026 and 2027, according to the Energy Information Administration. Data centers could suck up a fifth of the US’s total electricity in 2035, up from about 6% today, BloombergNEF found. In states with more data centers, including Texas, that share is expected to be higher. The grid’s already strained, and the record amount of capacity it’s been able to supply to data centers in the past is just over 7 gigawatts a year (one gigawatt is roughly the equivalent of one nuclear reactor). BloombergNEF analysts expect the grid to come 19 gigawatts short of what data centers demand by 2035.

To fill the gap, hyperscalers and power companies like Vistra and Constellation are trying to create sparks any way they can:

• AI is sourcing its juice from both natural-gas and nuclear options. Earlier this year, Vistra struck a deal to buy Cogentrix Energy and its 10 gas-fired power plants for $4.7 billion and reached a 20-year agreement that’ll see Meta buy power from some of Vistra’s nuclear plants.
• Constellation Energy has forged deals to supply nuclear power to Meta and Microsoft. Constellation said in 2024 it plans to restart Three Mile Island, where the US’s worst nuclear meltdown occurred. The power generated there will supply Microsoft.

Not Overnight: AI’s demand could continue to outpace power providers’ ability to meet it, straining the grid and pushing up electricity prices. When explaining Vistra’s projections for how quickly it could increase its available power supply, president and CEO Jim Burke hedged investors’ expectations this spring, saying, “The physical world takes much longer to develop than what people might imagine it takes.”