Closing Recap

Tuesday, August 26, 2025

U.S. stock markets did a whole lot of nothing most of Tuesday until a late day push lifted major averages to highs of the day, as investors held off on big bets ahead of key catalysts later this week. The Tech sector will be busy on the earnings front this week with MDB, NCNO, OKTA in software reporting tonight followed by NVDA tomorrow night headlining a busy slate including CRWD, BILL, HPQ, NTAP, NTNX, PSTG, and VEEV. In addition to earnings, the macro picture remains busy with GDP data on Thursday along with personal income/spending and the Fed’s preferred inflation gauge, the PCE core index on Friday morning. Inflation data remains important given the Fed’s mandate of inflation rolling back to 2%, while it has been slowly rolling the other way in recent months. Sector leaders today were Industrials, Healthcare, and Technology while Consumer Staples, Energy and Communications were the biggest decliners and Smallcaps outperformed. In trade news, the White House outlined plans for 50% tariffs on India to go onto effect 12:01am tomorrow. The tariff news does not end here as President has threatened to impose new tariffs and export restrictions on chips on nations that impose digital services taxes on American technology companies (directed at UK). Commerce Secretary Lutnick said in an interview with Fox news that an announcement regarding the US-Japan trade deal and the $550B investment vehicle will come this week. The dollar slipped after President Trump moved to remove Fed Governor Lisa Cook following a week of threats against Cook surrounding allegations of mortgage fraud, among one of the biggest stories of the day.

• US June 20-metro area home prices +2.1% (consensus +2.1%) y/y vs +2.8% in May (previous +2.8%) S&P Case-Shiller. US June home prices in 20 metro areas -0.3% seasonally adj (consensus -0.2%) vs -0.3% in May (previous -0.3%). US June 20-metro area home prices non-adjusted 0.0% vs +0.4% in May (previous +0.4%).
• Richmond Fed composite manufacturing index -7 in Aug vs -20 in July and Richmond Fed manufacturing shipments index -5 in Aug vs -18 in July. Richmond Fed services revenues index +4 in Aug vs +2 in July.
• Consumer Confidence index 97.4 above consensus 96.2 vs July revised 98.7 (previous 97.2).

• Brent Crude futures settle at $67.22/bbl, down $1.58, or 2.3% while U.S. WTI crude oil futures settle at $63.25/bbl, down $1.55, or 2.39%, pulling back from 3-week highs and after surging nearly 2% in the previous session as investors reassessed developments surrounding the war in Ukraine and potential disruption to Russian fuel supplies.
• The U.S. dollar slipped vs. rival currencies after President Trump moved to fire Federal Reserve Governor Lisa Cook following a week of threats against Cook surrounding allegations of mortgage fraud. The news raised market concerns over the central bank’s independence. The euro and British pound gained slightly while the dollar dipped against safe haven currencies Japanese yen and Swiss franc as well.
• U.S. Treasury yields dipped this morning ahead of key economic data this week yet to come (GDP, PCE). The U.S. Treasury sold $69B in 2-year notes at high yield 3.641% vs. 3.656% when issued prior with a bid-to-cover ratio 2.69 as primary dealers take 9.74% of U.S. 2-year notes sale, direct 33.16% and indirect 57.09%. The auction comes ahead of a $70B 5-year auction tomorrow and $44B in 7-year notes Thursday.

• In Retail: CTRN raised its full-year Ebitda outlook to $7M-$11M from $6M-$10M prior after swinging to a profit in Q2, boosted by higher sales and traffic and now expects comparable sales to rise by a mid-to-high-single digit percentage for the year, above prior view. KSS shares dropped after Bloomberg reported the company seeks more time to pay vendors amid turnaround effort (ahead of earnings tomorrow morning).
• In Autos: STLA has shelved its first Level 3 advanced driver-assistance program because of high costs, technological challenges and concerns about consumer appetite, three people familiar with the matter told Reuters; GM is recalling 23,656 U.S. vehicles as a fuel leak in the presence of an ignition source, such as hot engine or exhaust components, can increase the risk of a fire. NIO was upgraded to overweight from neutral at JP Morgan and raises target price to $8 from $4.80.

• In Insurance: Major U.S. personal auto insurers posted improved underwriting results in the second quarter of 2025, driven by easing frequency and severity levels, according to an analysis from S&P Global Market Intelligence. All twelve companies in the analysis of leading U.S. P&C and multiline insurers recorded increases in operating EPS and pre-tax net income. At the same time, PGR reported $16.8B in net written premiums for vehicles, up 14.2% y/y, while ALL reported a 2.7% rise for its auto lines to $9.53B.
• In Crypto: Trump Media Group (DJT), Crypto.com announce strategic partnership where DJT will purchase approximately $105 million in Cronos (CRO) digital currency and Crypto.com will purchase $50 million in shares in Trump Media. DJT will integrate CRO token on its truth social and truth+ platforms.
• In Real Estate: JP Morgan raised tgts for CBRE (to $185 from $143), CIGI (to $181 from $137), CWK (to $20 from $13) and JILL (to $372 from $285) in the commercial real estate services group to reflect the Q2 sales beats and improved margin outlooks going forward.

• LLY shares climbed all day after saying its experimental GLP-1 pill helped overweight adults with type 2 diabetes shed 10.5% of body weight in a late-stage trial. The once-daily pill also helped 75% of patients who received the highest dose of orforglipron lower their A1C level to/at or below 6.5%, Lilly said, below the ADA’s target of less than 7%.
• MRKR reported data from its ongoing early-stage trial evaluating its experimental therapy, MT-601, in patients with relapsed B-cell lymphoma, and said 66% of patients saw their cancer shrink or disappear, with 50% showing no detectable cancer after treatment.
• REGN said a Phase 3 study in adults with the rare and chronic autoimmune disease met its primary and key secondary endpoints, showing a 2.3-point placebo-adjusted improvement.
• SER said after a recent Type B meeting with the FDA, the FDA’s written feedback supports advancing SER-252 in a registrational clinical study program in advanced Parkinson’s under the 505 NDA pathway.
• In Medical Equipment & Supplies: HSIC was upgraded to Outperform with an $83 tgt at Evercore, grounded in the start of earnings power improvement from automation, a new Global Ecommerce Platform (GEP), greater Salesforce efficiency, and continued mix improvement (specialty/tech + private label).
• In Managed Care late day, UNH shares declined after Bloomberg reported ongoing criminal probe is broader than Medicare as DOJ probe also scrutinizing Optum RX, payments to doctors.

• In Transports: UNP reached out to CSX only after exclusivity with NSC, CNBC Becky Quick reported this morning. CP said in a statement that the company is not interested in participating in immediate rail industry consolidation, despite the suggestions by some that it take part, per Dow Jones.
• In Industrials: GNRC was downgraded to Neutral from Buy at Citigroup (raise tgt to $219) on valuation while also noting the stock is no longer seasonal with strength during hurricane season and lack of momentum in months outside elevated outage activity. In heavy duty trucks (CMI, PCAR), The Trump administration’s tariffs have raised manufacturing costs for the $50B U.S. heavy-duty truck industry, prompting companies to consider sourcing more components from Mexico to benefit from concessions under the US-Mexico-Canada Agreement (USMCA). U.S. truck manufacturers currently face 50% tariffs on imported steel, aluminum, and copper derivatives under Section 232 of the Trade Expansion Act.
• In Aerospace & Defense: HEI reported Q3 EPS of $1.26 vs Street’s $1.14 and EBITDA of $316M vs its $295M estimate, stronger results driven by stronger sales (notably aerospace aftermarket and other electronics and space products), absorption/efficiency benefits. Commerce Secretary Lutnick said in CNBC interview this morning concerning defense firms like LMT, which makes 97% of its sales from the US govt, that there is a lot of "talk going on" on the right way to do it [take stakes in companies]. In drone sector, EH shares fell after cutting FY25 revs to about 500-mln yuan ($69.90M), down from about 900-mln yuan guidance while Q2 revs of 147.2 mln yuan, missing analysts’ estimates of 181 mln yuan.

• In IT Services Sector: Jefferies said they remain cautious on the IT services space following Q2 earnings, saying sentiment has grown increasingly bearish as AI capabilities have advanced. The firm highlights significant pressure on valuations as a result. Near-term, Jefferies said it prefers CTSH and EXLS on relative safety from impressive growth vs peers and AI alignment.
• In Semiconductors: AMD announced a partnership with IBM to form a quantum-centric supercomputing and was also upgraded to Buy from Hold at Truist, tgt raised to $213 from $173 saying industry contacts (component buyers/sellers) have told them they have increasingly noted that hyperscalers are working with AMD in a partnership manner, expressing true interest in deploying AMD at scale. NVTS names Chris Allexandre as President and CEO after noting Gene Sheridan to step down as President and CEO. SMTC reported Q2 results that beat expectations and gave an outlook that is in line with expectations.