Closing Recap

Thursday, August 07, 2025

U.S. stocks closed modestly lower after rallying Wednesday, failing to break out to new highs despite overnight strength as investors juggle U.S. economy concerns, better earnings this Q2 and weighing upcoming potential rate cuts by the Fed to help an apparent weaker jobs market. Stocks pushed higher in the final minutes to push the Nasdaq into positive territory. European stocks closed at a one-week high on strong financial stocks and hopes of a Ukraine ceasefire, while global equities and major Wall Street indexes turned lower on Thursday. Treasury yields rose following a weaker 30-year auction (piggybacking a weak 10-yr the day prior), while crypto assets advanced. Stocks had declined last Friday off record highs on weaker jobs data before rallying Monday; stocks slumped again on Tuesday before surging on Wednesday – will markets rebound on Friday following today’s mixed declines in another “buy the dip” moment? Or will the week close under added pressure? Defensive utilities, consumer staples and REITs were among the S&P sector leaders while Healthcare tumbled again (behind LLY 14% drop on weight loss drug data), and Financials, Communications and Consumers were the biggest drags. In addition to the heavy dose of earnings, there were two notable IPOs open for trading (FLY, WYFI) as the new issue market has perked up over the last 2 months. Apple (AAPL) a standout to the upside for a second day on tariff headlines.

In trade/tariff news: Higher U.S. tariffs on imports from dozens of countries kicked in on Thursday, raising the average U.S. import duty to the highest in a century. Headlines dominated the overnight session as President Trump took to Truth Social on Thursday noting that billions of dollars in tariffs were now flowing into the US. “IT’S MIDNIGHT!!! BILLIONS OF DOLLARS IN TARIFFS ARE NOW FLOWING INTO THE UNITED STATES OF AMERICA!” Trump wrote. Trump’s sweeping “reciprocal” tariffs hit US trade partners on Thursday when his deadline to strike deals expired at 12:01 a.m. ET. Yesterday the President signed an executive order imposing an additional 25% tariff on India over its purchases of Russian oil. The new tariff, which will come into effect in 21 days. Trump also said he plans to impose a 100% tariff on semiconductor imports, with an exemption for companies that manufacture or commit to manufacturing in the U.S. South Korean chip makers, including Samsung Electronics Co. and SK Hynix Inc, will be treated as a most favored nation (MFN) by the U.S.

In Central Bank News: the Bank of England cut interest rates on Thursday but four of its nine policymakers – worried about high inflation – sought to keep borrowing costs on hold. Difficulty reaching an agreement meant the Monetary Policy Committee had to hold two rate votes for the first time in its history. With the MPC split over how to respond to an inflation rate that the BOE forecasts will soon be double its 2% target and a recent worsening of job losses, Governor Andrew Bailey and four colleagues backed lowering Bank Rate to 4% from 4.25%.

Bloomberg reported Federal Reserve Governor Christopher Waller is emerging as a top candidate to serve as the Central bank’s chair among President Donald Trump’s advisers as they look for a replacement for Jerome Powell, according to people familiar with the matter. Trump advisers are impressed with Waller’s willingness to move on policy based on forecasting, rather than current data, and his deep knowledge of the Fed system. Also, President Donald Trump on Thursday nominated Council of Economic Advisors Chairman Stephen Miran to serve out the remaining term of Federal Reserve Governor Adriana Kugler. Trump said Miran will serve in the role until January 31, 2026, while he continues a search for a permanent replacement.

Sentiment readings: 1) This week’s NAAIM Exposure Index surged to 96.25 from last week’s 76.85 – back near its highest reading of 99.30 on 7/2 (and snapping a streak of 4 straight declining weeks) – recent trough from 4-17 of 35.16 – Last Quarter Average (Q2) of 73.28; 2) The bull-bear spread in the American Association of Individual Investors (AAII) weekly survey was -8.3 vs +7.3 last week. Bulls fall to 34.9% from 40.3%, and Neutrals fall to 21.9% from 26.7%, Bears rise to 43.2% from 33%.

In the AI space: OpenAI introduced its newest AI model, called GPT-5, on Thursday. “GPT-5 is a major upgrade over GPT-4, and a significant step along our path to AGI [artificial general intelligence],” OpenAI CEO Sam Altman said on a YouTube video stream. “We think you will love using GPT-5 much more than any previous AI.” He added: “With GPT-5, now it is like talking to an expert. A legitimate PhD. level expert in any area you need, on demand, that can help you with whatever your goals are.” Elon Musk weighed in, saying on “X”, Bottom line though: Grok 4 Heavy was smarter 2 weeks ago than GPT5 is now and G4H is already a lot better.  Let that sink in.” musk also noted Grok 5 will be out before the end of this year. @tetsuoai said on “X”, Grok 4 improves daily and is better than OAI‘s most recent model, GPT-5. xAI created the best model we have seen in two years. I really can’t see anyone out-accelerating Elon and his team at this point.”

• Weekly Jobless Claims climbed to 226,000 from 219,000 and above consensus 221,000; the 4-week moving average fell to 220,750 from 221,250 prior week; continued claims climbed to 1.974M from 1.936M and vs. consensus 1.950M; the insured unemployment rate unchanged at 1.3%.
• June wholesale inventories revised to +0.1% vs. consensus +0.2%; June wholesale sales +0.3% (consensus +0.1%) vs May -0.4% (prev -0.3%); U.S. June stock/sales ratio 1.30 months’ worth vs May 1.30 months.
• In its latest Survey of Consumer Expectations, the regional Fed bank said the expected level of inflation five years from now stood at 2.9% in July, rising from 2.6% in the prior month and the highest reading since March. Meanwhile, expected inflation a year from now rose to 3.1% from 3% in June, while three-year-ahead expected inflation held steady at 3%.
• U.S. 30-yr fixed rate mortgages 6.63% Aug 7 week, lowest since April 10 2025, week, vs 6.72% prior week – Freddie Mac.

• U.S. WTI crude oil futures settle at $63.88/bbl, down -$0.47, or 0.73% while Brent crude declined -$0.46 or 0.69% to settle at $66.43 per barrel. Oil price turned lower after the Kremlin said Russian President Vladimir Putin would meet with U.S. President Donald Trump. Prices of gold, seen as a safe haven in volatile times, extended gains to a two-week high rising +$20.30/oz, or +0.59%to settle at $3,453.70 an ounce. Bitcoin, Ethereum and other crypto assets advanced early after President Trump said to sign executive order allowing cryptocurrencies in 401(k) retirement plans today.

• Food & Beverages: USFD shares fell after results while SEC filing showed the company approached PFGC to explore merits or opportunities of a possible combination; CELH a big winner as the energy drink company beats estimates for Q2 results, helped by gains from its Alani Nu acquisition (reported Q2 revs $739M vs. est. $651M on better EPS $0.47.
• In Restaurants: BROS rises as Q2 comparable store sales growth came ahead of expectations at 6.1% and increased FY25 guidance as see adj EBITDA $285-290Mm vs est. $273.57Mm; QSR shares fall after results/guide, dropping below its 200dma of $66.87; Q2 revs $2.41B beat ests, but EPS $0.94 misses the $0.97 estimate hurt by higher supply chain and commodity costs; PZZA shares outperformed behind Q2 EPS/sales beat while backing its year outlook.
• Hardline Retail: COST Monthly comps accelerated in July with the U.S. business picking up to +6.5% (excluding gas) following gains of +5.5% in each of the prior two months. This was aided by monthly traffic growth shifting to +4.3% from +2.8% in June. Also note both two-year and three-year stacked trends improved by +100 bps and +350 bps, respectively.
• In Retail: CROX shares fall; after posting Q2 EPS/revs above ests ($4.23/$1.15B vs. $4.01/$1.14B) but said expects Q3 revenue to be down about 9% to 11% compared to a 2% rise reported a year ago and vs. an expected a rise of 0.3%, and sees Q3 adj operating margin of about 18% to 19%, including anticipated negative impact of about 170 bps from tariffs. Luxury retailer RL raised its annual revenue forecast after beating top/bottom line for Q1, but the CEO said the company remains cautious about the global operating environment in the back half of the fiscal year; SN shares jump initially after non-GAAP EPS of $0.97 beats by $0.17, revenue of $1.44B beats by $60M. HBI rises on results and guidance.

• In Autos: Bank America noted President Trump announced he intends to impose 100% tariffs on chips. Details were not revealed. 100% tariff on semiconductors may increase vehicle production costs by hundreds of dollars and the firm  expects TSLA, F, MBLY, APTV, RIVN, LCID, VC to be particularly affected by this announcement. Wholesale Used-Vehicle Prices Decreased in July as per Manheim data. The non-adjusted price in July decreased 1.4% compared to June, which now makes the unadjusted average price higher by 3.0% year over year (data for CVNA, KMX)..
• In Ride Hail/Delivery: LYFT reported 2Q bookings/EBITDA of $4.49bn/$129mn, mostly in line with the Street at $4.5bn/$125mn while Q3 top-line guide was slightly underwhelming given contribution of FreeNow acquisition, though margin continues to be strong; DASH rises as Q2 EPS $0.65 topped est. $0.43; Q2 revs $3.28B vs. est. $3.16B; Q2 total orders increased 20% y/y to 761 million; Q2 Marketplace GOV increased 23% Y/Y to $24.2 billion; sees Q3 adjusted EBITDA $680M-$780M; Net revenue margin inched higher to 13.5% from 13.3% a year ago

• In Utility/Nuclear: CEG Q2 operating EPS $1.91 tops consensus $1.82 on better revs $6.1B vs. est. $4.88B; VST shares slumped after posting lower Q2 profit on higher operating and interest costs as net income of $327M was down from $467M y/y and said interest costs rose 25.7% to $303M, while total operating expenses increased about 17% to $733M; LEU was downgraded from Buy to Neutral at Bank America and raise tgt to $285 from $210 on valuation, while noting posted Q2 beat mainly driven by stronger performance of the low-enriched uranium (LEU) segment. ARIS to be acquired by WES in a cash-and-stock deal valued at about $1.5B. Aris shareholders will receive 0.625 common units of Western Midstream for each Aris share, or $25 per share in cash.
• In Solar: RUN rises as reported Q2 contracted value and increased fiscal 2025 guidance significantly above expectations due to record storage attach rate, higher volumes, and lower operating costs; SEDG Q2 revenue rises 32% to $289.4M, beating analyst expectations of $274M and adjusted EPS beats consensus (-$0.81 vs. -$0.86 loss), indicating improved operational performance as co faced GAAP net loss due to increased operating expenses and tariff impact; SHLS upgraded from Neutral to Buy at Roth and raise tgt to $10 from $5 after the co delivered a Q2 beat/raised 2025 revenue guide/showed strong bookings/backlog.

• In Insurance: AIG Q2 core EPS of $1.81 beat the firm’s estimate of $1.55 and Street consensus of $1.61. The firm’s 2025 EPS estimate rises 4.4% to reflect the Q2, but its price target based on its 2027 EPS forecast declines slightly due to a lower large-cap P&C peer group multiple. MET shares declined following its Q2 earnings miss. MFC shares fell after it reported Q2 earnings below analysts’ estimates, largely due to elevated credit and mortality losses in the United States.

• NVO, VKTX among other competing weigh loss drug makers rising on LLY oral drug data.
• SRPT shares rise after the US biotech reported revenue that beat estimates, which analysts attributed in part to a milestone payment for its controversial gene therapy Elevidys.
• ACAD in-line qtr from Nuplazid & Daybue as the street awaits ACP-101 top-line data in PWS, on-track for early-4Q.
• ADMA put up a $1mn beat versus Street expectations (actual $122mn) on marginally higher ACSENIV new patient starts along with steady performance in BIVIGAM.
• EYPT reported Q2 results and both wAMD pivotal studies are now fully enrolled, and top-line results for LUGANO are on track for Mid’26, with LUCIA to follow "shortly after".
• RVMD reported 2Q EPS, where management highlighted progress with Ph3 daraxonrasib registrational studies in PDAC (enrollment of the Ph3 RASolute 302 trial in previously treated metastatic PDAC expected to complete this year.

• In Insulin sector: TNDM shares fall as put up a +$2M top-line beat driven by OUS outperformance, while adjusted EBITDA came in -$4M below expectations; updated FY2025 sales guidance was left roughly the same but with shifting geographic expectations; saw FY25 US guide move lower to ~$700M (prior $725-730M). PODD however rises on results as beat Q2 profit and revs on strong demand for its wearable insulin pump (Omnipod revs $639M vs. est. $606M) while projects annual Omnipod revenue growth of 25% to 28%, up from a 20% to 23% growth forecast previously.
• MedTech: EXAS shares fall as Cologuard Sales growth drove a strong beat and raise in 2Q25, with screening growth of 18% well above Street estimate for 13% growth but shares fell amid disappointment with EXAS’ blood-based CRC strategy. BDX and ZBH are both among the biggest winners in the S&P after its Q2 results/guidance.
• In Distributors: MCK results witnessed robust EBIT growth in three (US Pharmaceutical, RxTS, & Medical-Surgical) of its four operating segments (Int’l down due to Canada asset sale) while EPS of $8.26 was above Street’s $8.19 view; management emphasized that FQ1 would likely have a higher tax rate of ~18.5-20.0%

• ACHR accelerates defense program with two strategic acquisitions as it pursues growing demand. CACI edged higher on results and guidance in gov’t IT defense names; FLY: FireFly Aerospace (FLY) 19.296M share IPO opened at $70 after priced at $45.00 as the space and defense firm raised $868.3M in its initial public offering. JOBY was downgraded to Hold from Buy at Canaccord and HCW as the latter notes the ~400% increase in the stock price since initiating coverage on September 3, 2024 and believes at current valuations the stock is pricing in multiple near-to-mid-term catalysts related to flight testing, certifications, manufacturing ramp, and commercialization. RDW shares tumble after 2Q revenue widely missed estimates ($61.8M vs. est. $80.4M), with management saying it continued to see delays in the US government’s budget approval processes; also guided FY25 revenue $385M-$445M, below consensus $430.49M.
• In Chemicals: CF posted Q2 adjusted EBITDA of $761M (1% Y/Y) vs $785M consensus on positive sales volume (+3% Y/Y) and modestly higher prices; CTVA posted 2025 EBITDA guide midpoint raised to $3.80B ($3.75-$3.85B range) from $3.7B ($3.6-$3.8B) and mid-point EPS to $3.10 ($3.00-$3.20 range) from $2.82 ($2.70-$2.95) – reported 2Q25 EBITDA of $2.16B vs consensus, with an upside in Seeds (+$129M), Crop Protection (+$59M) partially offset by a shortfall in Corporate; NTR delivered an EBITDA and EPS beat, while top line was modestly below Street expectations; 2Q EBITDA of $2.49M vs $2.33B consensus as beats in Nitrogen (+$214M) and Potash (+$63M) while Phosphate (-$4M) and Retail (-$89M) fell short. 2Q25 EPS of $2.65 (+ 13% Y/Y) vs $2.45 consensus; IFF was downgraded to Hold at Oppenheimer citing the moderated 2H outlook and drag from Health headwinds extending into 2026.
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• In Internet: DUOL shares jumped after the language learning app delivered better-than-expected revenues and paid subscribers; said daily active users jumped 40% from a year ago, to 47.7M; raised its outlook for the third quarter and full-year.
• Security Software: FTNT shares tumble on mixed results (prompts at least 5 analyst downgrades) after Q2 billings grew 15% Y/Y to ~$1.78B, above the Street’s $1.72B estimate (+12%), while product revenue growth of 13% Y/Y surpassed the Street’s +10% forecast, but Services revenue missed and noted it is already 40-50% of the way through the 2026 end-of-service refresh cohort, while also downticking on the 2027 refresh cohort.
• IT Services & Consulting: WYFI (WhiteFiber) 9.375M share (up from 7.81M) IPO, opened at $25 after priced at $17.00 (range $15-$17); EPAM reported Q2 results that beat expectations and raised its full-year forecast for adjusted earnings.
• Software: HUBS delivered a solid Q2 revenue beat ($21M), with revenue increasing 19% Y/Y (+18% in cc), ahead of consensus at 16%, and raised its FY25 revenue guidance by ~$40M to 17% growth (as reported and in cc). Management pointed to several drivers of the strong performance in Q2. DDOG reported Q2 results that beat expectations and raised its full-year forecast.
• In Quantum: IONQ was downgraded to Hold from Buy at Davidson, raised their tgt to $17 from $12 after the company reported Q2 results while viewing the stock’s current valuation as "challenging."
• In Optical/Networking: GLW shares rose after AAPL plans to onshore 100% of iPhone and Watch cover glass production to the US as part of an expanded $2.5 billion partnership with the Gorilla Glass maker.

• INTC in the news after President Trump said, “the CEO of INTEL is highly CONFLICTED and must resign, immediately. There is no other solution to this problem. Thank you for your attention to this problem!”
• NBIS shares jumped on earnings results; CFO said, “By the end of Q2, we were at peak utilization. The demand environment is very strong: as we brought on more capacity, we sold through it. If we had more capacity, we probably would have sold more as well." (helped shares of CRWV).