Market Snapshot
| Dow | 44922.27 | +463.66 | (1.04%) | | Nasdaq | 21711.75 | +31.24 | (0.14%) | | SP 500 | 6466.58 | +20.82 | (0.32%) | | 10-yr Note |
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| | NYSE | Adv 2184 | Dec 558 | Vol 1.21 bln | | Nasdaq | Adv 3275 | Dec 1246 | Vol 8.80 bln |
Industry Watch
| Strong: Consumer Discretionary, Health Care, Materials, Financials, Energy, Industrials, Real Estate |
| | Weak: Consumer Staples, Communication Services, Information Technology |
Moving the Market
Stocks expand upon yesterday's rally pushing the S&P 500 and Nasdaq Composite to fresh record highs
Lack of macro catalysts keeping the market focused on upward momentum following July CPI release
| Rate cut expectations fuel record highs
13-Aug-25 16:30 ET
Dow +463.66 at 44922.27, Nasdaq +31.24 at 21711.75, S&P +20.82 at 6466.58
[BRIEFING.COM] The S&P 500 (+0.3%) and Nasdaq Composite (+0.1%) opened to new all-time high levels, with yesterday's July CPI release providing enough momentum for the indices to close with modest gains and record closing highs, despite some profit taking throughout the day.
At its peak, the S&P 500 set a record intraday high of 6,480.28 and captured a record closing high of 6,466.58. The Nasdaq Composite set a record intraday high of 21,803.75 and notched a record closing high of 21,713.14.
Interest rate cut optimism was buoyed following comments from Treasury Secretary Scott Bessent on Fox Business last night advocating for a 50 basis-point rate cut, a stance he reiterated on Bloomberg TV this morning while adding that the Fed funds rate range should ultimately be reduced by at least 150 basis points.
The CME FedWatch Tool assigned a 99.9% probability of a 25 basis-point rate cut at the September FOMC meeting in the late morning, though this would later be reduced to 97.9% after Chicago Fed President Austan Goolsbee (FOMC voting member) stated that he is not committed to a September rate cut, citing concerns about an increase in services inflation.
Atlanta Fed President (FOMC nonvoting member) stated today that the central bank can wait to make policy adjustments because the labor market remains strong.
Nonetheless, the stock market largely advanced as a friendlier interest rate environment seems inevitable, though an underperformance in mega-cap names stymied growth in the S&P 500 and Nasdaq Composite, while the DJIA (+1.1%) outperformed with its mega-cap exposure limited to just Microsoft (MSFT 520.58, -8.66, -1.64%).
The Vanguard Mega Cap Growth ETF finished with just a 0.1% gain, while the Russell 2000 (+2.0%) continued its rally this week, and the S&P 500 Equal Weighted Index (+1.3%) decidedly outperformed the market-weighted S&P 500 (+0.3%).
Mega-cap underperformance contributed to modest losses in the communication services (-0.5%) and information technology (-0.2%) sectors, while the defensive consumer staples sector (-0.4%) also closed in negative territory.
The other eight S&P 500 sectors finished above their baselines, with the materials (+1.7%), health care (+1.6%) consumer discretionary (+1.3%) and energy (+1.2%) sectors capturing gains wider than 1.0%.
The consumer discretionary sector reaped the benefits of the expected friendlier interest rate environment, seeing notable gains in its homebuilder components that pushed the iShares U.S. Home Construction ETF (+4.5%) to a substantial gain.
Elsewhere, the health care sector saw considerable strength in its biotechnology names and strong leadership in top names such as Eli Lilly (LLY 660.70, +21.27, +3.33%) and UnitedHealth (UNH 271.84, +10.28, +3.93%).
Investors are continuing this week's trend of bargain hunting in the worst-performing S&P 500 sector this year, which, in conjunction with a retreat in several mega-cap names and continued small-cap outperformance, may signal a rotation in the market towards overlooked names that could benefit from looser monetary conditions.
U.S. Treasuries recorded solid gains on Wednesday in response to rising rate cut expectations, sending the 2-year note yield toward its August low (3.653%) while yields slipped to fresh lows for the week. The 2-year note yield settled down four basis points to 3.69%, and the 10-year note yield settled down six basis points to 4.24%.
- Russell 2000: +4.9% WTD
- S&P Mid Cap 400: +3.5% WTD
- DJIA: +1.7% WTD
- Nasdaq Composite: +1.2% WTD
- S&P 500: +1.2% WTD
Reviewing today's data:
- The weekly MBA Mortgage Index jumped 10.9% to follow last week's 3.1% increase. The Refinance Index jumped 23.0% while the Purchase Index was up 1.4%.
Record closing highs within reach
13-Aug-25 15:30 ET
Dow +435.09 at 44893.70, Nasdaq +25.93 at 21706.44, S&P +15.36 at 6461.12
[BRIEFING.COM] The DJIA (+0.9%) leads the S&P 500 (+0.2%) and Nasdaq Composite (+0.1%) as the latter two indices look to set all-time closing highs.
Bloomberg reports that Apple (AAPL 233.73, +4.08, +1.78%) is planning to introduce new AI devices that include robots, smart speakers, and home security cameras. The stock is up 12.6% this month, and its gains today help prevent a further loss in the information technology sector (-0.2%) that has seen weakness in its other two mega-cap components, Microsoft (MSFT 521.67, -7.57, -1.43%) and NVIDIA (NVDA 181.72, -1.44, -0.79%).
The crypto exchange Bullish (BLSH 80.80, +43.80, +118.38%) opened at $90 after pricing its IPO at $37 per share.
Rate cut expectations continue to be key driver
13-Aug-25 14:55 ET
Dow +406.57 at 44865.18, Nasdaq +17.99 at 21698.50, S&P +12.77 at 6458.53
[BRIEFING.COM] The S&P 500 (+0.2%) and Nasdaq Composite (+0.1) battle to capture even the most modest gains that would result in new record closing highs.
Chicago Fed President Austan Goolsbee (voting FOMC member) said at an event today that he is not committed to a September rate cut, citing concerns about an increase in services inflation, though he noted that the labor market is in good shape.
Atlanta Fed President Raphael Bostic (not a voting FOMC member) also spoke today and noted that a strong labor market gives the Fed the luxury to wait to make policy adjustments.
The CME FedWatch tool now shows a 97.9% probability of a September rate cut, which is still an overwhelmingly likely figure, though it is 2.0% lower than the 99.9% probability displayed earlier in the day.
WBD, Lowe’s rally on insider buy, bullish call; DoorDash falls on Amazon grocery expansion
13-Aug-25 14:30 ET
Dow +391.23 at 44849.84, Nasdaq +18.11 at 21698.62, S&P +12.16 at 6457.92
[BRIEFING.COM] The S&P 500 (+0.19%) is in second place on Wednesday afternoon, up about 12 points.
Briefly, S&P 500 constituents Warner Bros. Discovery (WBD 12.05, +0.83, +7.40%), Lowe's (LOW 257.66, +12.79, +5.22%), and Equifax (EFX 251.90, +10.91, +4.53%) dot the top of the average. WBD is higher after Director A. Levy disclosed the purchase of 325K shares, while Piper Sandler had bullish comments on LOW.
Meanwhile, DoorDash (DASH 251.84, -12.48, -4.72%) slides to the bottom of the average after news that Amazon (AMZN 224.04, +2.57, +1.16%) would expand its Same-Day Delivery grocery service.
Gold gains on softer inflation, weaker dollar amid geopolitical caution
13-Aug-25 14:00 ET
Dow +300.72 at 44759.33, Nasdaq +8.89 at 21689.40, S&P +5.62 at 6451.38
[BRIEFING.COM] The tech-heavy Nasdaq Composite (+0.04%) is in last place with about two hours to go on Wednesday, having dipped briefly into the red over the last half hour.
Gold futures settled $9.30 higher (+0.3%) at $3,408.30/oz, lifted by a weaker U.S. dollar and softer inflation data that bolstered expectations for a Fed rate cut in September. July CPI increased 0.2%, down from 0.3% in June, supporting a more dovish policy outlook and making non-yielding gold more attractive. Geopolitical developments, including the planned U.S./Russia summit over Ukraine and a 90-day extension of the U.S./China tariff truce, tempered safe-haven demand but kept investors cautious.
Meanwhile, the U.S. Dollar Index is now down -0.3% to $97.80.
CAVA Group under pressure after Q2 results last night, cut in FY25 comps weighing on shares
CAVA Group (CAVA -16%) is under heavy pressure today after releasing its Q2 results last night, trading to a new 52-wk low. This Mediterranean fast-casual restaurant chain reported a narrow EPS beat, while revenue missed expectations for just the second time since going public in mid-2023. CAVA revenue grew 20.3% yr/yr to $278 mln. Although CAVA reaffirmed its FY25 adjusted EBITDA and Restaurant-Level profit margin guidance, the bigger headline was a cut in FY25 comps to 4-6% from 6-8%.
- CAVA reported Q2 comps of +2.1%, primarily driven by price mix while traffic remained relatively flat yr/yr. Comps have been trending lower in recent quarters, and this is a pretty sharp deceleration from the +10.8% comp in Q1, and +21.2% in Q4. Despite the macroeconomic pressures, management noted that CAVA entered the second quarter with strong comp sale momentum, but as it moved through June it saw a deceleration, driven in part by the timing of its steak launch last year.
- Management also cited a "honeymoon effect" as another headwind to comp sales. Its 2024 class of stores exceeded expectations in its first year. Now included in the comp base, these stores are having an impact from a comp perspective.
- There are some positives in this report to point out. The company continues to expand quickly, opening 16 net new CAVA restaurants, a 16.7% increase yr/yr, and bringing its total restaurant count to 398. It also raised its FY25 net new restaurant openings to 68-70 from 64-68, marking the second consecutive quarter it has raised this metric. Additionally, despite a more modest comp increase, its Restaurant-Level profit increased 19.6% yr/yr to $73.3 mln, reflecting the strength of its operating model and its ability to generate attractive returns regardless of near-term sales volatility.
- Moving forward, management noted that comp sales regained momentum in the latter part of the quarter, reaccelerating as it exited Q2, and has so far continued into Q3. Additionally, CAVA does not have a high marketing spend as a percentage of revenue and has seen positive results from tests around its media mix model. It notes that it is something it can lean into if the macroeconomic headwinds persist.
Overall, while CAVA had some positives this quarter, the deceleration in comp growth and lowered FY25 comp guidance are weighing heavily on shares. Additionally, while comps showed a modest increase, it is worth noting that traffic was relatively flat, which has been the main driver of comp growth in past quarters. Traffic accounted for +7.5% in Q1 and +15.6% in Q4.
More generally, we were a bit nervous heading into this report given that CAVA sits on the upper end of the price scale in the fast-casual space. As pointed out in yesterday's preview, fast-casual chains with more expensive menu items than peers have struggled in Q2, most notably Sweetgreen (SG). While CAVA's results were more favorable than SG's, it is clear that higher priced names are feeling the impact of the macro environment where consumers are becoming increasingly value oriented.
KinderCare plummets to record lows as enrollment woes and lowered outlook spark sell-off (KLC)
KinderCare Learning Companies (KLC) is facing a sharp sell-off, with its stock plunging to record lows following a disappointing Q2 earnings report that missed adjusted EPS expectations and prompted a downward revision of its FY25 revenue guidance to $2.75–$2.80 bln from $2.75–$2.85 bln. The primary headwind driving the market’s reaction was enrollment and occupancy softness, with Q2 same-center occupancy declining 130 bps yr/yr to 71%, as management noted that enrollment trends weakened unexpectedly late in the quarter.
- The enrollment softness was attributed to local market and company-specific factors rather than broad industry headwinds, with management highlighting inconsistent demand across regions, particularly in urban markets with elevated childcare costs averaging $20,000 annually, and operational missteps such as inadequate local marketing and pricing disconnects in certain centers. These issues led to a 1.4% yr/yr drop in average weekly full-time equivalent enrollment for early childhood education to 149,010 for the six-months ended June 28, 2025.
- Consequently, KLC lowered its FY25 occupancy forecast to a 1–1.5% yr/yr decline, reflecting cautious expectations for enrollment recovery in the second half of the year, despite efforts to address these challenges.
- To combat enrollment declines, KLC is implementing an "opportunity region" initiative, targeting underperforming centers with focused leadership, tailored operational guidance, and increased marketing investments to boost local brand visibility. The company is also enhancing its digital infrastructure, expanding online tour scheduling to streamline enrollment processes and deploying real-time occupancy dashboards to enable data-driven management decisions at the center level.
- On the profitability front, KLC reported an improvement in adjusted EPS to $0.22 from $0.15 in 2Q24, driven primarily by a 50% reduction in interest expense to $20.1 mln, following debt repricing, and a 2% increase in tuition rates that offset the 1% enrollment decline in ECE centers. Despite these gains, adjusted EBITDA fell 4.5% to $82.4 mln due to a $19.4 mln rise in cost of services, fueled by higher wage rates and a reduction in non-recurring COVID-19 stimulus funding, which increased cost of services as a percentage of revenue.
- Management anticipates Q4 to be the strongest quarter for adjusted EBITDA, projecting $310–$320 mln for FY25, bolstered by seasonality and an extra 53rd week, which should enhance revenue and operational leverage.
- Longer-term, KLC stands to benefit from favorable legislative tailwinds, notably the full funding of the Child Care and Development Block Grant in the recent U.S. federal budget, which ensures stable subsidies for 40% of its enrollment base, and the enhanced Employer-Provided Child Care Credit set to take effect in 2026. These provisions, combined with bipartisan support for childcare access, are expected to drive demand for KLC’s services, particularly its employer-sponsored solutions like Tuition Benefit+ and on-site centers, which align with the 89% of Fortune 500 HR leaders planning to expand childcare benefits within five years.
KLC’s persistent enrollment and occupancy challenges, underscored by a 130 bps drop in Q2 occupancy and a lowered FY25 revenue outlook, are the primary catalysts behind the stock’s record-low plunge, reflecting investor skepticism about near-term recovery. While company-specific initiatives like the "opportunity region" strategy and legislative tailwinds such as CCDBG funding provide a pathway to improved results, KLC remains a "show me" story, requiring tangible progress in enrollment and operational efficiency to restore confidence in its financial trajectory.
Brinker ends FY25 on a strong note, strong comps and upgraded ribs bode well for FY26 (EAT)
Brinker Intl (EAT) wrapped up FY25 on a high note. The stock is trading higher despite reporting fairly modest EPS/revenue upside with its Q4 (Jun) earnings report this morning. This restaurant operator (Chili's, Maggiano's) reported a huge 55% yr/yr jump in adjusted EPS to $2.49, by far its smallest upside in the past four quarters. Revenue rose a healthy 21.0% yr/yr to $1.46 bln, but that was just slight upside and follows two huge upside quarters in Q2 and Q3.
- So why is the stock higher? We got our first look at FY26 guidance and it was pretty solid. It was within analyst expectations, but the mid-point of adjusted EPS guidance of $9.90-10.50 was well above those expectations. The mid-point for revs was slightly above. However, given the macro pressures being faced by consumers, we think investors are taking the guidance as a win.
- The other big reason why the stock is higher is that Q4 same-restaurant comps were quite impressive. Comps came in at a whopping +21.3% (Chili's +23.7%; Maggiano's -0.4%), although they were a bit softer than Q3's (Mar) blowout comps of +28.2% (Chili's +31.6%; Maggiano's +0.4%). A final reason for the move today was EAT increasing its share buyback authorization by $400 mln.
- EAT described its Chili's segment as "officially back, baby back!" Chili's sales growth in Q4 was driven primarily by continued increases in traffic. It also benefitted from a favorable sales mix and menu pricing. Chili's also drove sales via on-point advertising that highlights its value and encourages guest trial. The company also cited operational improvements as contributing to traffic gains by driving repeat guest visits.
- Leveraging these higher sales, Chili's saw improved margins which allowed EAT to accelerate investments in the business and pay down debt. Specifically, company-wide operating margin in Q4 jumped to 9.8% from 6.1% a year ago. And restaurant operating margin (non-GAAP) rose to 17.8% from 15.2% a year ago. Its Maggiano's segment is struggling a bit, Q4 was impacted by lower traffic, partially offset by menu pricing.
- At the end of Q4, Chili's relaunched its ribs platform and customers are raving about the look, the size and the taste of the ribs. EAT said its new ribs are a very noticeable upgrade and says it's clear Chili's has a winning product with its new ribs. Chili's intent now is to use them to drive traffic. After a quarter to ramp up execution on the new ribs, Chili's plan is to turn on digital marketing in Q2 (Dec). Chili's also rolled out its new frozen margarita, which features a new premium Patrón.
Overall, this was a very solid end to FY25 and we think investors are pleased with its FY26 outlook, especially given the macro headwinds. But that is maybe working to Chili's advantage. Its value menu is quite impressive, offering a delicious meal at a good price. We really think EAT has curated its value offering and has gotten it down to a science with its 3-for-Me offering and it sounds like its upgraded ribs could drive additional traffic in FY26.
CoreWeave's upside results fall short of hype, while profitability concerns trigger sell-off (CRWV)
CoreWeave (CRWV) delivered its second quarterly earnings report since its March 28, IPO, facing lofty expectations fueled by a 43% stock surge in August and a rich valuation with a P/S ratio of approximately 13.5x based on the company's FY25 revenue projections of $5.15–$5.35 bln. This premium valuation set a high bar for the Q2 results, and despite robust performance, the market’s reaction reflects a classic sell-the-news dynamic. The stock is down sharply as the revenue beat of 12% versus analysts' estimates fell short of the prior quarter’s 15% outperformance, and ongoing profitability concerns, driven by a high debt load and widened losses, prompted investors to reassess the company’s near-term trajectory.
- Revenue growth remained impressive, with revenue soaring 207% yr/yr to $1.21 bln. However, not only was this beat less pronounced than last quarter, but CRWV's Q3 revenue guidance of $1.26–$1.30 bln represents upside of just 2% versus analysts' estimates, based on the midpoint of the guidance range. The more marginal upside underwhelmed investors who were looking for CRWV's top-line blowouts to continue, particularly given its position as a high-growth AI infrastructure provider.
- Profitability metrics raised further concerns, as CRWV’s adjusted net loss widened significantly to $(130.8) mln from $(5.1) mln in 2Q24, reflecting increased operational and financing costs. The GAAP earnings per share of $(0.60) also missed analyst expectations, underscoring the strain from a high debt load, which stood at $3.6 bln as of June 30, 2025, with interest expenses ballooning to $266.9 mln from $66.7 mln yr/yr. While adjusted EBITDA surged 201% to $753.1 mln, maintaining a strong 62% margin, this metric excludes the substantial interest expense, masking the impact of CRWV’s leverage on its bottom line and highlighting a key headwind for earnings growth.
- CRWV’s aggressive capacity expansion to meet surging AI-driven demand, exemplified by a $30.1 bln revenue backlog and partnerships with major clients like OpenAI, is set to pressure margins in the near term. The company forecasts Q3 adjusted operating income of $160–$190 mln, a decline from Q2’s $199.8 mln, reflecting increased capital expenditures and stock-based compensation costs as it scales infrastructure, including a new 250 MW data center in New Jersey slated for 2026.
- This strategic focus on growth over profitability aligns with CRWV’s long-term vision but introduces short-term margin compression that investors must weigh against its robust demand pipeline.
CRWV’s Q2 results underscore its exceptional growth, driven by a $30.1 bln revenue backlog and strategic partnerships with AI leaders like OpenAI, positioning it as a critical player in the AI infrastructure market. However, sky-high investor expectations, fueled by its post-IPO momentum and lofty valuation, have led to a sell-the-news reaction, with the modest revenue beat and persistent profitability challenges -- exacerbated by a high debt load -- prompting profit-taking after a 43% stock surge in August.
On is spot on with Q2 results and guidance as Swiss footwear brand sees no let up in demand (ONON)
On Holding (ONON) is trading sharply higher today following a stellar Q2 earnings report that showcased a 32% yr/yr increase in net sales to CHF 749.2 mln, comfortably surpassing analysts’ expectations. The Swiss performance sportswear brand also raised its FY25 net sales growth guidance to at least 31% in constant currency, up from its prior forecast of at least 28%, reflecting confidence in sustained demand. Additionally, ONON lifted its gross margin guidance to 60.5–61.0% from 60.0–60.5%, signaling improved profitability driven by premium positioning and operational efficiencies.
The strong results and upbeat outlook underscore ONON’s ability to capitalize on market opportunities, even as competitors like NIKE (NKE) navigate ongoing challenges, propelling the stock’s post-earnings rally.
- ONON’s robust Q2 performance and raised guidance highlight its accelerating market share gains in the highly competitive athletic footwear and apparel market, where it continues to outpace industry giants like NKE, which is grappling with a multi-year turnaround amid sluggish demand and inventory issues. Key drivers of ONON’s success include its three-year strategic plan (2024–2026), which emphasizes global expansion, product innovation, and direct-to-consumer (DTC) growth, with a goal to double net sales by 2026.
- The company’s diversified portfolio of footwear franchises, spanning running, training, tennis, and trail categories, combines premium lifestyle appeal with high-performance functionality, resonating with younger, affluent consumers. Strategic partnerships with high-profile athletes like Iga Swiatek and Zendaya, alongside innovative products like the Cloudmonster and LightSpray technology, have bolstered brand visibility and demand.
- The DTC segment was a standout in Q2, with revenue surging 47% yr/yr to CHF 307.4 mln, now representing 41% of total revenue, up from 36% in 2Q24. This growth was fueled by strong e-commerce performance, driven by enhanced digital marketing, personalized customer experiences, and the expansion of ONON’s owned retail stores, which grew to 45 globally by quarter-end. The introduction of interactive online platforms and loyalty programs further boosted DTC engagement, particularly among Gen Z and millennial consumers seeking premium, performance-driven products.
- Wholesale channel also performed strongly, with revenue up 23% to CHF 441.8 mln, supported by deepened partnerships with key retailers like Foot Locker (DKS) and JD Sports, as well as expanded distribution in high-growth markets like Asia-Pacific and Europe.
- Despite missing EPS expectations with a reported CHF 0.09 per share, the shortfall was entirely attributable to adverse currency fluctuations, particularly the strengthening of the Swiss franc against the U.S. dollar and euro. Excluding these impacts, ONON’s profitability metrics paint a strong picture: adjusted EBITDA soared 50% yr/yr to CHF 136.1 mln, exceeding estimates and reflecting significant operating leverage. Gross margin also expanded to 61.5% from 59.9% in 2Q24, driven by a favorable mix of high-margin DTC sales, reduced promotional activity, and lower freight costs due to optimized supply chain operations.
ONON’s strong momentum across its shoes, apparel, and accessories categories underscores its position as a leading innovator in the performance sportswear market. Recent launches, including the Cloudtilt for lifestyle, Speedboard for tennis, and Cloudventure for trail running, are expected to drive continued growth by appealing to diverse consumer segments. With a fortified DTC channel, expanding global footprint, and a clear strategic roadmap, ONON is well-positioned for sustained outperformance in the quarters ahead.
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