Closing Recap

Wednesday, September 03, 2025

U.S. stocks finished stronger as the S&P 500 and Nasdaq rebounded nicely after back-to-back losses with Alphabet (GOOGL) and Apple (AAPL) driving tech sentiment. A federal judge ruled that Google can keep its Chrome browser and Android OS and maintain its $20 billion search deal with Apple, though it must share data with rivals and avoid exclusivity. Alphabet jumped about 9% (all-time highs) and Apple rose over 3% on the news. Technology (XLK, XLC) were the leaders in the S&P ahead of earnings for Dow component Salesforce (CRM) tonight. Energy (XLE) fell over -2%, the worst sector in the S&P, dragged down by sliding oil prices after reports that OPEC+ is considering another supply boost for October at this weekend’s meeting. Helping strengthen bets of an imminent interest-rate cut, a Labor Department report showed U.S. job openings fell more than expected in July and hiring was moderate, consistent with easing labor market conditions. Next up is the ADP Private Payroll report tomorrow and the August Nonfarm payroll report on Friday morning. Recall Federal Reserve Chair Jerome Powell’s comments at Jackson Hole last month signaled labor market weakness could be the deciding factor for its rate decision on September 17. Yields on the 30-year note touched 5% on Wednesday for the first time since July 18, but US Treasury yields slipped today, with it falling 4.89% and the 10-yr 4.21%. Investors keeping high on historicals/seasonality as September has been historically weak for U.S. equities, with the index losing -1.5% in the month on average since the turn of the century, according to data compiled by LSEG. Another massive story is the historic run for gold, breaking out and hitting new all-time highs above $3,600 an ounce. The day was also dominated by several Wall Street conferences, and more tomorrow.

• U.S. July factory orders fell (-1.3%) vs. consensus (-1.4%) and vs June (-4.8%); July factory orders ex-transportation +0.6% vs June +0.4% (prev +0.4%); July factory orders ex-defense (-1.1%) vs June (-4.7%); U.S. July Durables orders unrevised at -2.8%; U.S. July nondefense cap orders ex-aircraft unrevised at +1.1%; July shipments unrevised at +0.7%.

• On the flip side, oil prices sunk in the commodity space with WTI crude falling -$1.62 or 2.47% to settle at $63.97 per barrel, which was weak all day after a report said that OPEC+ is considering another supply boost for October at this weekend’s meeting. OPEC+ has reversed its strategy of output cuts from April and has already raised quotas by about 2.5 million barrels per day, about 2.4% of world demand, to boost market share and under pressure from U.S. President Trump to lower oil prices. Natural gas prices gained 5.5c or 1.83% to settle at $3.064M btus, now up 36.80c or 13.65% over the last six session winning streak.

• In Discount Stores: DLTR shares fell after reporting a top and bottom line Q2 beat, but forecasts Q3 adj. profit to be flat sequentially due to rising tariff-related costs; said Q2 cost of sales rose to nearly $3B from $2.67B y/y, due to tariffs and higher discounts on some items; did raise FY sales/EPS guidance.
• In Food Sector: CPB shares rallied on mixed results/guidance; Q4 sales rose 1% y/y to $2.32B vs. est. $2.33B, and forecast annual sales and profit below Wall Street estimates, pressured by weak demand for snacks and ready-to-eat meals as well as higher costs from tariffs; SFD files for offering of 16M shares of common stock by selling stockholders
• In Sporting Goods Retail: ASO was downgraded to Neutral from Buy at Citigroup, cutting tgt to $50 from $55 saying the company’s positive comps in Q2 were offset by weaker than expected gross margins. Citi is now more cautious on Academy posting positive comps in the back of 2025 and 2026.
• In Tobacco/Consumer Staples: shares of PM, MO slipped this afternoon following comments from India finance minister saying a special rate of 40% to apply for cigarettes, chewing tobacco, aerated water containing added sugar.

• In Autos: Ford (F) reported US vehicle sales of 190,206 units in August, up 3.9% from 182,985 units a year earlier. Electrified vehicle sales rose 16.2% to 29,444 units, with EVs up 19.3% to 10,671 units and hybrids growing 14.5% to 18,773 units. SUV sales climbed 6.2% with strong performances from Bronco (up 32%) and Explorer (up 22%). Truck sales increased 2.4% though F-Series declined 3.4%, while Maverick compact truck jumped 16.4%. Lincoln luxury brand sales fell -14.9% to 8,379 units, Navigator SUV gained 2.5%.
• In Leisure: PRKS will replace FL in the S&P SmallCap 600 effectively prior to the opening of trading on Monday, September 8. S&P MidCap 400 constituent Dick’s Sporting Goods Inc. (DKS) is acquiring Foot Locker in a deal expected to be completed soon.
• In Loding: Truist raised its price target on hotels Hyatt (H), HST, and MAR while lowered for ABNB and SHO as firm updated estimates and price targets in lodging and leisure following the Q2 earnings reports.

• In Nuclear/Power: SMR shares outperformed for a second day as Canaccord raised PT to $60 after SMR announced its support for ENTRA1 Energy’s landmark agreement with the Tennessee Valley Authority (TVA) to deploy up to 6 gigawatts of NuScale’s small modular reactor (SMR) capacity across TVA’s seven-state service region.
• In Oil Refiners: Bank America upgraded VLO to Buy from Neutral saying the refiner is better positioned than they were then due to the Light-Heavy outlook (raised tgt to $179 from $152) and downgraded PSX to Neutral from Buy saying while still sees its SOTP value embedded in their midstream, the NGL outlook has grown dimmer this year with less US liquids growth expected and downstream overbuild beginning, and the chemicals outlook has dampened considerably.
• In Industrials/Machinery: REVG Q3 sales of $644.9M topped expectations of $630.9M while raised their full-year guidance, expecting net income for the year to come within a range of $95-$108M from a previously expected $88-$107M; CMI, PCAR shares active after Final North American Class 8 net orders totaled 13,172 units in July, down 2.1% y/y, as published in ACT.
• In Transports: For airlines, Bernstein noted TSA screenings have been looking strong against 2024 comps over the past few days as trailing 7-day TSA screenings have been up low-single-digits YoY throughout the entire week. As of now, the latest last-7-day (L7D) reading for the U.S. airlines is +1.7% YoY. This marks a pickup from trends Bernstein has been seeing in recent weeks with ULCC, UAL, JBLU up the most. Airlines also getting a boost from a decline in oil prices today after a recent bounce in prices.

• In Insurance: AON it will sell the majority of NFP’s wealth business to private equity firm Madison Dearborn Partners in a deal valued at about $2.7 billion.
• In Financial Services: TRU upgraded to Buy, $115 tgt at Needham as believes that TRU is poised to have a strong 2H25 and beyond, led by strong momentum with FinTech clients, an improving outlook in India, and mortgage inquiry reprieve as rates appear to finally be heading in the right direction.

• Vaccine names active (BNTX, PFE, MRNA) after FL Surgeon General, Joseph Ladapo, MD, announces an effort to ban ALL Vaccine Mandates in the state of Florida. Ladapo said Wednesday he is directing the Florida Department of Health to eliminate all vaccine directives issued by the health agency, including for school children, which would make it the first state in the U.S. to get rid of immunization requirements.
• Healthcare Technology: HQY reported Q2 revenue of $325.8M (+9% Y/Y), topping consensus of $320.7M while Non-GAAP net income per share of $1.08 topped ests on EBITDA of $151.1M (+18% Y/Y) beat consensus of $135.3M, helped in part by strong gross margin performance of 71% (versus its 67% est.)
• In Medical Devices & Equipment: ISRG shares slumped on the day following comments from its CFO at the Wells Healthcare Conference; said expects tariff impact to be higher in 2026, accord and the co is exploring ways to mitigate the impact, including leveraging its manufacturing footprint and suppliers.
• In Life Sciences/CRO/Research Sector: ERAS was double downgraded to Underperform from Buy at Bank America (tgt to $1 from $4) as sees an increasingly high bar to clear to prove clinical differentiation in the ever-growing molecular glue landscape for solid tumors for lead molecular glue drugs ERAS-0015 and ERAS-4001; TECH was upgraded to Outperform at RBC Capital and raise tgt to $73 as recent end-market weakness has over-penalized one of the best assets in the LST sector, creating an attractive entry point; BRKR shares fell following news of public offering of $600M of mandatory convertible preferred stock.

• For GOOGL, shares surged after a U.S. judge ruled against breaking up the Google parent, clearing a major regulatory overhang. The ruling by Judge Amit Mehta allows Google to retain control of its Chrome browser and Android mobile operating system, while barring certain exclusive contracts with device makers and browser developers. It, however, allowed Google to continue to make payments to partners such as Apple to feature its search engine.
• For AAPL, TD Cowen views the US District Court for DC’s remedies for GOOGL’s Search business as largely favorable for AAPL advertising revs (I.E. licensing from Google TAC payments) as rev sharing and Safari search defaults can continue. Non-exclusive remedies allow AAPL to license non-GOOGL GenAI products (E.G. OpenAI). TD Cowen views the remedies as largely favorable for AAPL’s advertising services business where third-party licensing agreements with GOOGL represent a low-20% of Service revenues and ~10% of total company gross profit. TDCowen believes GOOGL rev sharing could be in the low-$20B range.
• Other movers on the news: companies like RDDT and OPRA also saw share gains helped on the GOOGL headlines for sharing data.

• In Cloud Software: HUBS was upgraded to Outperform from Market Perform at Bernstein with an unchanged price target of $606 as sees a more favorable risk/reward with the company’s macro issues stabilizing and the stock’s valuation having come down. CRM to report earnings tonight after the bell.
• In optical sector: shares of GLW, LITE, CIEN, FN edged lower initially after Bloomberg reported China announces anti-dumping duties on optical fiber from the U.S. Duties target U.S.-made single-mode optical fibre used in telecom infrastructure. Chinese authorities claim U.S. firms were selling below fair market value. Tariffs expected to range from 21% to 46%, depending on the exporter as per the report