Mid-Morning Look

Tuesday, August 26, 2025

U.S. stocks open flattish and holding there for the first hour of trading, after sliding in the final 30-minutes on Monday to end the day lower. S&P futures (Spuz) are down 7 of the last 9 trading days, but on a % basis, only modestly lower thanks to last Friday’s 1.5% surge on Fed Chair Powell rate commentary. Tech and Communications have been the leaders recently behind the AI trade, and remained strong yesterday/today into NVDA earnings on Wednesday night. In macro news, the dollar slipped overnight after President Trump moved to remove Fed Governor Lisa Cook following a week of threats against Cook surrounding allegations of mortgage fraud. 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 in an interview with Fox news said that an announcement regarding the US-Japan trade deal and the $550B investment vehicle will come this week. Economic data plentiful today, but not “needle-moving” ahead of GDP data tomorrow and PCE inflation report on Friday morning. There are lots of tech earnings this week, hearing from MDB, NCNO, OKTA, in software tonight followed by NVDA, CRWD, BILL, HPQ, NTAP, NTNX, PSTG, and VEEV tomorrow. Oil prices fell by about 1% after surging nearly 2% in the previous session as investors reassessed developments surrounding the war in Ukraine and potential disruption to Russian fuel supplies.

• 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).

• 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’s in line with expectations.
• 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 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.

• CTRN +2%; after results; after raising 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.
• LEU +13%; said it signed a MoU with Korea Hydro & Nuclear Power, KHNP, and POSCO to explore potential investment to support expansion of Centrus’ uranium enrichment plant in Piketon, Ohio.
• LLY +3%; after its experimental obesity pill helped patients lose 9.6% of their body weight in a trial that moves the company one step closer to a potential approval.
• OKLO +6%; was initiated at Buy and $92 price target at Bank America saying backed by both the DOE and data center operators, nuclear energy is regaining momentum and Oklo, which is building next-generation small nuclear reactors, is well positioned to meet the rising energy needs of AI.
• SATS +77%; after entered into a definitive agreement with ATto sell the company’s 3.45 GHz and 600 MHz spectrum licenses — a total of 50 MHz of nationwide spectrum, for approximately $23B, subject to regulatory approval. The licenses cover more than 400 markets across the U.S. in total.
• TLN +5%; will replace IBKR in the S&P 400 on Aug. 28th which is replacing WBA as it is being acquired.
• UUUU +17%; after signing memorandum of understanding with Vulcan Elements, manufacturer of rare earth permanent magnets, to create a domestic supply chain for rare earth magnets independent of China.
• WU +2%; after Devin Mcgranahan, CEO & President, bought 176,470 shares for $1,498,054 at $8.49/share on Aug 21 ’25 according to form 4 filing.

• CSX -2%; 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.
• EH -6%; 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, missed analysts’ estimates of 181 mln yuan.
• GNRC -3%; 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.
• STZ -1%; was downgraded to Underperform from Neutral at Bank America and lowered tgt to $150 from $182 saying beer industry consumption remains soft, creating risk to sales, margin and the multiple saying the stock is not cheap.