Closing Recap

Wednesday, August 27, 2025

U.S. stocks grinded higher most of the day, adding to the prior day gains and building on last Friday’s post Fed Chair Powell’s dovish Jackson Hole commentary as Wall Street awaited the potentially biggest earnings results of the quarter, with NVDA earnings after the bell. Just how important are NVDA results for the broader market? Well, Bespoke Invest noted on “X”, “If the Philadelphia Semiconductor Index was market-cap-weighted, Nvidia would have a 48% weighting, and the top three stocks – $NVDA $AVGO $TSM – would have a 76% weight.” Nvidia also makes up 8% of the S&P market weighting (MSFT 6.9%, AAPL 6.2%, GOOGL 4%, AMZN 3.9%, META 3%, AVGO 2.5% and TSLA 1.8%). NVDA also makes up 10% of the QQQ’s, and 16% of the XLK. Safe to say that the face of the AI revolution is carrying the weight of the market on its shoulders tonight, but that has been nothing new in recent quarters. Most S&P sectors closed higher today (9 up sectors to 2 down), with Energy the leader behind a bounce in oil prices, along with Technology after earnings helped (MDB, NCNO) and REITs as Treasury yields slipped. Wall Street also awaits key economic data tomorrow with GDP, Friday with PCE inflation data and then jobs data next week. Crypto Assets slumped late day, weighing on risk assets, while gold prices edged higher. Interesting stats of the day: 1) Charlie Bilello notes on “X”: “The Dow closed at an all-time high last week, and history was made. We’ve now seen 13 straight years with at least 1 all-time high, surpassing the epic 1989-2000 streak (12 years).” 2) @alexandraandnyc noted on “X” that, “the share of stocks in the S&P 500 trading above their 200-day moving average is hovering near 70%, the highest proportion since November. The equal-weighted S&P is on track for its first monthly outperformance against the cap-weighted index since March.”

• In Commodities, December gold prices rose $15.60 or 0.45% to settle at $3,448.60 an ounce ahead of key economic data. Brent Crude futures settle at $68.05/bbl, up 83 cents, or 1.23% while WTI crude prices settle at $64.15/bbl, up 90 cents, or 1.42%. Prices were helped by bullish weekly EIA inventory data. Nymex September contract rolls off the board at $2.867/mmBtu, up 5.5% on the day.
• Treasury yields were mixed on the day as the short end of the curve yield slipped while longer date maturities were higher. The two-year U.S. Treasury yield hit lows around 3.6270%, lowest since May 1, while the yield of the 30-year is up 1bps to 4.92%; the 10-yr reversed, falling -1bps to 4.244%. Also today, the U.S. sold $70B in 5-year notes at high yield 3.724% vs. 3.717% when issued prior as the bid-to-cover ratio 2.36, as primary dealers take 8.78% of U.S. 5-year notes sale, direct 30.74% and indirect 60.48%.  Zerohedge noted the tailing 5Y auction sees record high directs, record low dealers.

• In Department/Specialty Retail Stores: KSS raised its annual profit forecast for FY25 to $0.50-$0.80 from prior view $0.10-$0.60 (est. $0.63) while narrowing its FY25 revenue view to down 5%-6% from down 5%-7% and comp sales view to down 4%-5% from down 4%-6% (follows a Q2 EPS beat and smaller comp loss). AS was upgraded from Hold to Buy at HSBC Holdings and raised tgt to $50 saying they are again becoming constructive on the name.
• In Restaurants: CBRL shares rise after the restaurant chain said it would stick with its decades-old logo, scrapping plans for a new one following social media backlash; DNUT downgraded to Underweight from Neutral at JP Morgan saying underlying US business trends limit visibility of proposed turnaround plan.
• In Food & Beverages: SJM shares fell after reporting a Q1 EPS miss ($1.90 vs. est. $1.93) while Q1 net sales were weighed down by decreased sales of coffee, dog snacks, sweet baked goods and fruit spreads, while backs its FY26 ES outlook but raised its sales outlook.

• In Leisure Products: Boat retailer MCFT posted a Q4 beat as sales $79.5M topped the $70.5M estimate (and above $54.3M y/y) while EPS of $0.40 more than doubled ests of $0.18 saying they further strengthened dealer health, advanced our new product initiatives, and generated significant free cash flow; guided Q1 EPS and sales below consensus while FY26 EPS $1.15-$1.40 midpoint topped consensus $1.18.

• In Building Products: FBIN was downgraded from Buy to Hold at Truist following a recent rally with the group driven by rate cut speculation. Company fundamentals have seen more pressure than Truist expected in this downturn, partially due to dramatic declines in its China business.
• In Refiners: Goldman Sachs noted the Investor Focus on DK, PARR, CLMT, DINO as the Small Refinery Exemptions (SREs) release eligible oil refiners from their obligation to blend renewable fuels into their products or purchase Renewable Identification Numbers (RINs) under the Renewable Fuel Standard (RFS), thereby reducing their compliance costs and improving profitability (said DINO best positioned).
• In Nuclear/Power: NNE has entered into a Memorandum of Understanding (MOU) with Dioxitek S.A., Argentina’s only uranium feedstock manufacturer for nuclear fuel fabrication.
• In Aerospace & Defense: for gov’t IT services (BAH, CACI, LDOS, KBR), Bloomberg reported the Pentagon to scrutinize 400,000 contracts for cuts which involves the DoD’s in-house Department of Government Efficiency (DOGE) team to identify "additional savings" and efficiencies. Short seller Grizzly Research said they were short ACHR but long JOBY in an “X” post this morning saying this is not a judgement call on the eVTOL industry, rather a contrast in operational progress between the two companies.

• Financial Services/Technology: NCNO shares rose after Q2 subscription revenue was 3.4% above the high end of guidance (4.1% above consensus), while non-GAAP OI/EPS were also well above consensus and raised its FY26 subscription revenue guidance by 1.3% and non-GAAP OI/EPS guidance by 5%/11%; said is confident it can meet or exceed its FY26 ACV bookings targets based on strong 1H performance.
• In Payments: PYPL shares fell after Suddeutsche Zeitung reports German banks blocking PayPal payments, Suddeutsche Zeitung says security systems designed to filter out fraudulent payments have apparently failed at the payment service provider, so German banks have blocked direct debits. GOOGL Cloud unveils L1 Blockchain to power payments and settlements, the Google Cloud Universal Ledger (GCUL).
• In Insurance: AHL is to be acquired by Sompo Holdings, Inc., a wholly owned subsidiary of Sompo International Holdings Ltd. for $37.50 per share in cash, in a deal valued at about $3.5B. Aspen brings a specialty insurance and reinsurance franchise with more than $4.6 billion in annual gross written premiums.

• BTAI shares rise after saying its experimental agitation drug, BXCL501, met the main goal of a late-stage study testing it in patients with bipolar disorder or schizophrenia for at-home use; the company said it plans to submit an application for expanded approval for the drug in Q1 2026 for at-home use.
• ELAN will replace SRPT in the S&P MidCap 400, and Sarepta Therapeutics will replace BRKL in the S&P SmallCap 600 effective prior to the opening of trading on Tuesday, September 2.
• LLY was upgraded from Reduce to Hold at HSBC Holdings and raise tgt to $700 saying Orforglipron’s ATTAIN-2 Phase 3 trial in diabesity appears to offer a clear commercial path for filing and commercialization.
• LLY announced positive topline results from the primary overall survival (OS) analysis of the Phase 3 monarchE trial. Treatment with two years of Verzenio plus endocrine therapy (ET) demonstrated a statistically significant and clinically meaningful improvement in OS compared to ET alone in patients with hormone receptor positive (HR+), HER2-, node-positive, high-risk early breast cancer.
• PFE and BNTX said they will immediately begin shipping their updated Covid-19 vaccine to pharmacies, hospitals and clinics across the U.S. for use this fall. The vaccine has been approved for use in adults ages 65 and up, as well as for individuals between the ages of five and 64 who have an underlying condition.
• VIR was upgraded to Buy from Neutral at Bank America saying the market is underestimating the potential for its asset for treatment of severe liver disease caused by hepatitis delta virus

• In Data Center/AI: CRWV was initiated at Overweight and $116 tgt at Cantor driven by its view of a healthy balance between a significant AI market opportunity and dynamic execution risks. Cantor believes CoreWeave should benefit from secular growth trends in AI, specifically large language model training and inference- based usage, as an enabling software-driven AI-focused hyperscaler.
• In Security Software: OKTA posted Q2 beat and FY26 raise across all metrics as cRPO growth of 13.5% beat consensus 10% while Q3 cRPO guide of 10% met consensus; OKTA FY26 revenue guide raised by $25M, EBIT margin raised 50 bps, and FCF margin raised by 1pt; said U.S. public sector again strong.
• In Storage: BOX reported strong FQ2 results with upside again driven by healthy Enterprise Advance adoption (EA bookings ~doubling q/q) along with further early renewal activity pro services strength and raised its FY26 rev outlook. Reporting tonight in Storage/Hardware includes NTAP, NTNX and PSTG.
• In Media: the WSJ reported AAPL will distribute its curated radio stations on a global network of home speakers and connected cars, in a push to extend the reach of its music service, as competition in the music streaming industry heats up, with companies such as SPOT. Apple’s market share of digital music subscribers in the U.S. fell to 25% at the end of last year, from 30% in 2020, while Spotify’s increased.
• In Telecom/Satellite: SATS shares active for a second day, after surging Tuesday. Elon Musk’s Starlink and TMUS have separately expressed interest in acquiring some or all of the spectrum controlled by struggling DISH Network-parent EchoStar (SATS), according to people familiar with the matter reported Semafor. At stake is one of the largest pots of underused airwaves, which are owned by the public but licensed to telecom companies. https://tinyurl.com/4eba4jpa . Towers impacted as well with Bank America downgrading SBAC to Neutral from Buy as highlights the potential for incremental deployments on the AT&T side to be longer dated following the AT and SATS mid-band spectrum deal announcement.

• MU was initiated with an Outperform, $155 PT –at CLSA saying Micron is well-positioned to capitalize on the demand for high bandwidth memory (HBM) from AI customers and to benefit from the healthy demand-supply balance in DRAM in 2H25-2026.
• ByteDance new employee share buyback to value company at over $330B, up from $315B in last round, sources note according to Reuters. ByteDance Q2 revenues grew 25% to reach around $48B, and says its TikTok U.S. business remains loss-making.