August 20, 2025
S&P futures down 0.1% Wednesday after US equities extended losses Tuesday, with the S&P 500 logging its biggest drop since Aug 1 and falling for a third straight session. Big tech and AI names remained under pressure while cyclicals held up better. Asia was mixed (Japan -1.5%, China +1%), Europe little changed. Treasuries steady to weaker after Tuesday’s rally. Dollar flat, gold +0.3%, Bitcoin +0.3%, WTI crude +1.3%.
Rotation away from big tech continues to dominate discussion amid concerns on concentration, AI capex bubbles, China competition, and stretched valuations. Powell’s Jackson Hole speech Friday is the week’s key event, with debate over whether he leans dovish. Retail earnings are also a focus for insight on consumer sentiment, tariffs, and spending trends. Today brings July FOMC minutes plus speeches from Fed’s Waller and Bostic; claims, PMIs, and existing home sales follow Thursday.
Company Updates
- LOW: Comps a bit light but EPS ahead; raised FY revenue outlook; announced $8.8B deal for Foundation Building Materials.
- TGT: Q2 slightly better than feared, reiterated guidance; named COO Michael Fiddelke as next CEO.
- ALC: Fell after Q2 miss and FY25 guide down on Surgical weakness and competitive pressures.
- KEYS: Beat with slightly better guidance.
- TOL: Beat on closings and margins, though ASP light and FY volume guide at lower end.
- LZB: Dropped on mixed Q1 and weak Q2 outlook tied to margins.
- MU/TSM/Samsung: Reuters reported Commerce Sec. Lutnick wants US to take equity stakes in all CHIPS Act recipients.
- MCD: Cutting combo meal prices after agreement with franchisees.
- MTB: Raised dividend.
US equities finished mostly lower Tuesday, with the Dow up 0.02% but the S&P 500 down 0.59%, Nasdaq off 1.46%, and Russell 2000 lower by 0.78%. The S&P 500 and Nasdaq logged their worst sessions since August 1, though market breadth was positive with equal-weight S&P outperforming cap-weighted by ~110 bp. Treasuries were firmer with yields down 2–4 bp, the dollar index rose 0.1%, gold slipped 0.6%, Bitcoin fell 2.7%, and WTI crude declined 1.7% amid continued Russia–Ukraine diplomacy.
Rotation defined the session, with big tech, growth, and momentum under pressure, while cyclicals, value, and rate-sensitive areas fared better. September rate cut probability remains elevated at ~83%, with ~50 bp of easing priced for 2025. Powell’s Jackson Hole speech on Friday is expected to carry a dovish tilt but not explicitly signal September. Housing starts surprised to the upside in July (+5.2%) while building permits fell for the seventh time in eight months. No new Fed commentary Tuesday, though FOMC minutes and remarks from Waller and Bostic are due Wednesday, followed by claims, flash PMIs, and existing home sales later in the week.
Sector Highlights
Defensive areas led, with Real Estate (+1.80%), Consumer Staples (+1.00%), and Utilities (+0.99%) outperforming alongside gains in Healthcare (+0.62%), Materials (+0.53%), Industrials (+0.19%), Financials (+0.17%), and Energy (-0.19%). Consumer Discretionary (-0.37%), Communication Services (-1.15%), and Technology (-1.88%) lagged, pressured by weakness in mega-cap tech, software, AI-linked names, and China tech.
Information Technology
- NVDA: Fell sharply as AI and momentum stocks came under scrutiny; reports suggest work on a new China-focused AI chip more powerful than H20.
- INTC (+7.0%): Rose after SoftBank agreed to purchase $2B in shares; reports also indicated talks about selling Intel’s contract chipmaking business.
- PANW (+3.1%): Posted FQ4 beat with strength in RPO, bookings, and ARR; guidance ahead of expectations with margins solid.
- FN (-12.8%): Reported in-line EPS and revenue beat but guided for another Datacom decline amid component shortages.
- CRM: Announced acquisition of AI automation company Regrello.
- SNEX: Authorized a 2.25M share repurchase.
Communication Services
- META: Weighed on Nasdaq; reports suggest upcoming downsizing/restructuring of AI division.
- GOOGL: Proposed changes to Play Store to avoid EU penalties.
- TGNA (+4.3%): To be acquired by NXST for $6.2B, representing a 9% premium to Monday’s close.
Consumer Discretionary
- HD (+3.2%): Q2 comp and EPS missed, but US comps (+1.4%) and linearity trends improved through the quarter; reiterated FY guidance and noted tariff resilience.
- BBY (+3.2%): Launched a digital marketplace, doubling product availability.
- CXW: Announced CEO succession.
- DGII: Announced $145M acquisition of Jolt Software.
- DKNG, FLUT: Fell after Robinhood announced entry into football prediction markets.
- VIK (-1.6%): Reported Q2 EBITDA beat but outlook for 2026 yields seen as disappointing.
Consumer Staples
- SFM (+1.8%): Announced $1B share repurchase authorization.
Healthcare
- MDT (-3.1%): Beat and raised, but results underwhelmed; Elliott confirmed a stake, with board changes planned.
- VKTX (-42.1%): Dropped sharply after Phase 2 obesity drug trial showed positive weight loss results but high discontinuation rates.
Industrials
- CSX (+1.5%): Reportedly under activist pressure to pursue M&A or leadership changes; Commerce Secretary Lutnick reiterated support for rail consolidation.
- AS (-4.7%): Reported Q2 beat and guidance raise, though expectations were elevated and Americas growth slowed.
Financials
- SOFI: Announced blockchain-backed international transfers.
- ALTS: Rose after Point72 disclosed a 4% stake.
Energy & Materials
- NWE: To be acquired by BKH.
- US copper wire producers and coffee buyers noted tariff-related price pressures
Eco Data Releases | Wednesday August 20th, 2025
S&P 500 Constituent Earnings Announcements | Wednesday August 20th, 2025
Data sourced from FactSet Research Systems Inc.
