| | | Market Snapshot
| Dow | 43968.64 | -224.48 | (-0.51%) | | Nasdaq | 21241.31 | +73.27 | (0.35%) | | SP 500 | 6340.00 | -5.06 | (-0.08%) | | 10-yr Note |
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| | NYSE | Adv 1293 | Dec 1421 | Vol 1.17 bln | | Nasdaq | Adv 1949 | Dec 2582 | Vol 9.05 bln |
Industry Watch
| Strong: Utilities, Materials, Consumer Staples, Real Estate, Information Technology, Consumer Discretionary |
| | Weak: Health Care, Industrials, Financials, Communication Services, Energy |
Moving the Market
Exemptions from 100% tariff on chips and semiconductors for companies that commit to domestic production
Increase in jobless claims signals continued labor market softening
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Mixed finish after opening highs
07-Aug-25 16:35 ET
Dow -224.48 at 43968.64, Nasdaq +73.27 at 21241.31, S&P -5.06 at 6340.00
[BRIEFING.COM] The stock market opened to early gains as investors were enthused by the announcement of semiconductor tariff carveouts, but these gains were quickly ceded as the market succumbed to relatively broad-based selling activity that saw the major averages close mostly lower.
The information technology sector (+0.4%) surged out of the gate following yesterday afternoon's announcement from President Trump that companies committed to domestic production will be exempt from an impending 100% tariff rate on chips and semiconductors.
NVIDIA (NVDA 180.77, +1.35, +0.75%) hit a fresh record high of 183.88, and the PHLX Semiconductor Index was up as much as 2.7%. Ten S&P 500 sectors traded in positive territory during the morning rush, pushing the S&P 500 (-0.1%) within 0.6 points of its all-time closing high (6,389.77).
After testing record levels, stocks quickly began to retreat. At first, the sell-off was broad-based, with nine sectors trading in negative territory, though the technology sector still held a bulk of its early gains, which kept the major averages in positive territory.
The major averages hit session lows below their flatlines around 2:30 PM ET, as the technology sector flipped into negative territory. A modest late-session advance helped the sector finish with a gain of 0.3%, largely due to continued strength in Apple (AAPL 220.03, +6.78, +3.18%) following yesterday's $100 billion investment increase in domestic production and relative strength among chipmakers that saw the PHLX Semiconductor Index finish with a gain of 1.5%, just over half of its early advance.
The Nasdaq Composite (+0.4%) eked out a closing gain, while the S&P 500 (-0.1%) could not quite resurface above its flatline, and the DJIA (-0.5) posted a wider loss.
A lack of major developments makes it difficult to pin today's retreat on any one factor, but it is worth noting that increased tariff rates for several key partners went into effect last night, pushing the effective tariff rate near historical levels. While the market has been quick to focus on optimistic developments on the trade front, there is still uncertainty around how the economy will respond to a higher tariff environment.
A weaker-than-expected initial jobless claims report also points to a softening labor market.
Though the market closed well below its early highs, losses were relatively modest. Only the health care (-1.2%) and financials (-1.1%) sectors closed with losses greater than 0.5%.
The health care sector faced pressure out of the gate as its largest component, Eli Lilly (LLY 640.61, -105.76, -14.17%), traded sharply lower in response to results from its weight-loss drug pill trial. Those results, on the surface, were positive, yet they reportedly didn't measure up to the competition, showing a 12.4% weight loss versus 15% for Novo Nordisk A/S (NVO 48.76, +3.38, +7.45%) weight-loss drug pill and an overall dropout rate of 24.4% at the highest dose.
Excluding the loss in the health care sector, defensive sectors outperformed today, as the utilities (+1.1%) and consumer staples (+0.7%) sectors closed with the largest gains.
There were some notable developments in regard to President Trump's anticipated Federal Reserve Board nominations.
Bloomberg reported that Fed Governor Chris Waller is emerging as the top choice for Fed Chair among Trump's team of advisors, though a White House official stated that until the president speaks on the matter himself, this is speculative.
Just before the close, President Trump announced via Truth Social that he selected Dr. Stephen Miran to serve in Adriana Kugler's just-vacated seat on the Federal Reserve Board until January 31, 2026. In the meantime, the president will search for a more permanent replacement.
U.S. Treasuries modestly retreated on Thursday as the market digested the July Survey of Consumer Expectations from the New York Fed and a disappointing $25 billion 30-year bond sale that once again saw below-average foreign demand. The 2-year note yield settled up three basis points to 3.73%, the 10-year note yield settled up two basis points to 4.24%, and the 30-year note yield settled up one basis point to 4.82%.
- Nasdaq Composite: +2.9% WTD
- Russell 2000: +2.2% WTD
- S&P 500: +1.6% WTD
- DJIA: +0.9% WTD
- S&P Mid Cap 400: +0.6% WTD
Reviewing today's data:
- Q2 Productivity - Prel 2.4% (Briefing.com consensus 2.2%); Prior was revised to -1.8% from -1.5%, Q2 Unit Labor Costs - Prel 1.6% (Briefing.com consensus 1.5%); Prior was revised to 6.9% from 6.6%
- The key takeaway from the report is that productivity improved noticeably from the first quarter, helping to tamp down unit labor costs. The 1.8% annualized rate of productivity growth in the current business cycle (starting Q4 2019), though, is still below the long-term rate of 2.1% since the first quarter of 1947.
- Weekly Initial Claims 226K (Briefing.com consensus 220K); Prior was revised to 219K from 218K, Weekly Continuing Claims 1.974 mln; Prior was revised to 1.936 mln from 1.946 mln
- The key takeaway from the report, in light of the soft nonfarm payrolls data seen last week, is the jump in continuing jobless claims, which will be seen as a sign/symptom of a softening labor market.
- June Wholesale Inventories 0.1% (Briefing.com consensus 0.2%); Prior -0.3%
- Consumer credit increased by $7.4 billion in June (Briefing.com consensus: $8.6 billion) following an unrevised $5.1 billion increase in May.
- The key takeaway from the report is that the entirety of the consumer credit expansion in June was driven by nonrevolving credit.
Major averages at session lows near close
07-Aug-25 15:25 ET
Dow -312.09 at 43881.03, Nasdaq -28.31 at 21139.73, S&P -24.90 at 6320.16
[BRIEFING.COM] The major averages continue their steady retreat, seated just above session lows as the market enters the final half hour of trading.
Breadth figures reflect a steady increase in selling activity throughout today's session, with decliners outpacing advancers by a roughly 5-to-4 margin on the NYSE and a roughly 3-to-2 margin on the Nasdaq.
Crude oil fell to its lowest closing level since early June, settling $0.49 (-0.8%) lower at $63.85 per barrel.
Consumer credit increased by $7.4 billion in June (Briefing.com consensus: $8.6 billion) following an unrevised $5.1 billion increase in May.
The key takeaway from the report is that the entirety of the consumer credit expansion in June was driven by nonrevolving credit.
Defensive sectors advance amid broad-based losses
07-Aug-25 15:00 ET
Dow -307.22 at 43885.90, Nasdaq -8.38 at 21159.66, S&P -21.05 at 6324.01
[BRIEFING.COM] The major averages are now all seated in negative territory after sliding from their opening highs.
The information technology sector (-0.2%) opened today's session with the widest gains but now faces broad losses across its constituents. Apple's (AAPL 219.93, +6.68, +3.13%) continued outperformance helps prevent a further loss, and there is still relative strength among chipmakers, as Advanced Micro Devices (AMD 171.26, +8.14, +4.99%) recovers the bulk of yesterday's loss that followed the company's earnings report.
With the exception of the health care sector (-1.5%), which faces pressure in its largest constituent, Eli Lilly (LLY 639.59, -106.78, -14.31%), defensive sectors are outperforming today, as utilities (+1.2%) and consumer staples (+0.8%) are the only S&P 500 sectors with gains greater than 0.5%.
S&P 500 dips as Fortinet tumbles 26% post-earnings; APA jumps nearly 9%
07-Aug-25 14:25 ET
Dow -355.07 at 43838.05, Nasdaq -71.60 at 21096.44, S&P -31.54 at 6313.52
[BRIEFING.COM] The S&P 500 (-0.50%) is in second place on Thursday afternoon, down about 30 points.
Briefly, S&P 500 constituents Fortinet (FTNT 71.54, -25.04, -25.93%), Texas Pacific Land Trust (TPL 878.35, -72.27, -7.60%), and CF Industries (CF 83.88, -6.02, -6.70%) dot the bottom of the standings all following earnings reports.
Meanwhile, APA Corp. (APA 19.65, +1.59, +8.80%) is today's top gain getter following earnings.
Gold up 0.6% as Fed cut bets grow despite firm dollar
07-Aug-25 14:00 ET
Dow -310.32 at 43882.80, Nasdaq -2.44 at 21165.60, S&P -18.69 at 6326.37
[BRIEFING.COM] The Nasdaq Composite (-0.01%) is down about 2 points on Thursday afternoon, fading off morning gains which surpassed 238 points.
Gold futures settled $20.30 higher (+0.6%) at $3,453.70/oz, supported by lingering trade concerns and growing expectations of a Fed rate cut next month. While the U.S. dollar edged higher, gold found support from investor caution following yesterday's tariff announcement on Indian imports and softening U.S. economic data that reinforced the case for monetary easing.
Meanwhile, the U.S. Dollar Index is up about +0.1% to $98.29.
Airbnb travels lower despite upside Q2 results; cautious Q3 outlook weighing on shares (ABNB)
Airbnb (ABNB -8%) is traveling lower today after reporting its Q2 results last night. Despite reporting EPS and revenue upside, the alternative accommodations company is seeing some selling pressure from investors. We think investors are responding to ABNB's Q3 and FY25 outlook, which points out tougher yr/yr comps later in Q3 and into Q4, putting pressure on growth rates in 2H25.
- ABNB had 134 mln Nights and Seats Booked, up 7% yr/yr. A positive was that ABNB saw an acceleration in yr/yr Nights and Seats Booked with growth rates for May and June both outpacing Q1. Gross booking value is another key business metric for ABNB. GBV increased 11% yr/yr to $23.5 bln, compared to 7.5% yr/yr growth to $24.5 bln in Q1.
- A quick note, Nights and Seats Booked is a new metric and alternative to its prior Nights and Experiences Booked. The metric now includes the number of nights booked for stays as well as the total number of seats booked for both services and experiences. Airbnb Services (chef, photographer, catering etc.) and its reimagined Experiences launched in May. ABNB noted that while it's early, over 60,000 people have submitted applications to host a service or experience.
- For regional performance, Nights and Seats Booked increased in the high teens in Latin America, mid-teens in Asia Pacific, and mid-single digits in EMEA. North America continues to lag its other regions, growing only low-single digits. Management called out specific strength in Brazil and Japan, with Japan having an acceleration in booked nights, driven by more domestic travel and a 15% yr/yr increase in first-time bookers.
- Moving on to what we think is causing a negative reaction in the stock. ABNB noted it saw encouraging demand trends, specifically the acceleration of nights booked from April through July, with particularly strong momentum in the US. That said, yr/yr comps get tougher in Q3, putting pressure on growth rates, which is expected to continue into Q4. As a result, Q3 Nights and Seats Booked is expected to be flat sequentially, while Q3 adjusted EBITDA margin is expected to be lower yr/yr.
Overall, while ABNB had several positives and upside Q2 results, the cautious Q3 outlook is weighing more heavily on shares. Its new services and experiences offer further growth opportunities, but it's still too small and early for those benefits to resonate with investors who are focused on the near-term outlook. We saw something similar with Booking Holdings (BKNG) when it reported its Q2 results last week. Despite the upside results, shares traded lower as the company was a bit cautious on US inbound travel. On a final note, peer Expedia (EXPE) will report its Q2 results today after the close. This report from ABNB makes us a little more cautious on EXPE's report tonight.
Dutch Bros energizes investors with stellar beat-and-raise report (BROS)
Dutch Bros (BROS) delivered a stellar Q2 earnings report, sparking a significant stock surge on the back of an impressive beat-and-raise performance. Key drivers included strong same shop sales growth, new shop openings, and robust engagement in the Dutch Rewards loyalty program. Fixed cost leverage, particularly in beverage and packaging costs, further bolstered margins, supporting a 37% rise in adjusted EBITDA to $89 mln.
Furthermore, the company raised its FY25 guidance, projecting revenues of $1.59-$1.60 bln and adjusted EBITDA of $285-$290 mln, reflecting confidence in sustained momentum.
- Despite a challenging consumer spending environment impacting discretionary categories, BROS continues to outperform competitors like Starbucks (SBUX), and fast-food chains like McDonald’s (MCD) and Yum! Brands (YUM), which have faced headwinds from softening demand. The company’s success stems from its focus on iced and customizable beverages, which resonate strongly with younger demographics, particularly Gen Z and Millennials, who value personalization and convenience.
- Drive-thru efficiency, with 90% systemwide mobile order coverage, enhances customer experience and throughput, while menu innovations like Poppin’ Boba and Protein Coffee drive incremental sales. BROS’ people-first culture and brand authenticity, emphasized by CEO Christine Barone, further differentiate it in a crowded market, fostering loyalty and sustaining demand even in a choppy macro backdrop.
- Company-operated same shop sales surged 7.8% in Q2, driven by a 5.9% increase in transactions and a 1.9% uptick in average ticket, reflecting both higher customer traffic and modest pricing power. The Dutch Rewards program saw transactions rise to 71.6% of total sales, up from 66.7% in 2Q24, underscoring growing customer loyalty and engagement.
- This strong performance prompted BROS to raise its FY25 same-shop sales growth guidance to approximately 4.5%, up from a prior midpoint of 3.5%, signaling confidence in sustained traffic-led growth. The program’s success, coupled with digital initiatives like order-ahead (11% of transaction mix), continues to drive operational efficiency and customer retention.
- Profitability metrics showed significant improvement, with adjusted EPS climbing 37% yr/yr to $0.26, despite inflationary pressures, particularly in California, where labor costs rose due to a 25% yr/yr starting wage increase. Margin expansion was driven by sales leverage, lower beverage and packaging costs, and reduced labor costs as a percentage of revenue. BROS also raised its FY25 adjusted EBITDA guidance to $285-$290 mln from $265-$275 mln, reflecting disciplined cost management and strong unit economics, with company-operated shop contribution margins reaching 31.1%. However, elevated coffee commodity costs remain a potential headwind for 2025.
- BROS’ aggressive expansion strategy remains a core growth driver, with 31 new shops opened across 13 states in Q2, bringing the total to 1,043 locations. The company is on track to open at least 160 shops in 2025, with approximately 40 planned for Q3 and 60 for Q4, aligning with its long-term goal of over 7,000 locations. New store average unit volumes exceeding $2 mln and disciplined real estate strategies mitigate risks associated with high CapEx per shop ($1.7 mln), particularly in high-growth markets like Texas and Florida.
BROS’ exceptional Q2 performance and raised FY25 guidance underscore its ability to thrive in a challenging consumer environment, driven by strong same shop sales, rapid expansion, and a highly engaged customer base through its Dutch Rewards program. Its brand resonance with younger generations, coupled with substantial profitability gains despite high-cost markets like California, positions it as a standout in the quick-service beverage sector.
DoorDash dashes higher on another impressive report/guidance (DASH)
DoorDash (DASH +4%) is dashing higher, although it has pulled back from its highs, following its Q2 report last night. The food delivery service giant reported solid top line growth at +24.9% yr/yr to $3.28 bln, which was nicely above analyst expectations. Total orders rose 20% yr/yr, an acceleration from +18% yr/yr in Q1, to 761 mln. Q2 Marketplace GOV rose 23% yr/yr, again above Q1's +20% yr/yr, to $24.2 bln, which was above the $23.3-23.7 bln prior guidance.
- Since DASH does not provide adjusted EPS, we think it is important for investors to focus more on adjusted EBITDA as the better metric for profitability because it's a clean adjusted number and DASH provides guidance for it. And on this score, DASH did well with adjusted EBITDA growing 52% yr/yr to $655 mln, which was above the high end prior guidance of $600-650 mln. It also guided to Q3 adjusted EBITDA of $680-780 mln, a big sequential improvement.
- In its US marketplace, yr/yr growth in Total Orders accelerated in Q2, with notable strength in the US restaurant category. Strong growth in DashPass membership contributed to a yr/yr increase in average order frequency, which reached an all-time high in Q2. DASH says high levels of consumer engagement were evident across many metrics. DASH also generated strong results from its mature cohorts in Q2.
- Ultimately, what is driving growth for DashPass is the underlying product continuing to get better. The company noted that it has been investing in DashPass for years, including adding more selection and adding features and services. As a result, DashPass is attracting more new consumers than ever before. When they graduate to DashPass, their order frequency is higher.
- In its international marketplaces, DASH added more new Wolt+ members in Q2 than in any previous quarter. While the Wolt+ membership program is still early in its development, DASH says growth in Wolt+ members helped drive yr/yr growth in average order frequency in its international marketplaces. At the same time, DASH improved unit economics, driven partly by improvements in Dasher efficiency.
- Taking a step back, DoorDash talked about its longer term success. Five years ago, it was largely one product and operating in one country (restaurant delivery in US) and today it is five businesses. DASH have a business outside of the US. It has a business outside of US restaurant delivery with its category expansions. It has its Commerce Platform, an ads business, and it is working on new businesses.
There is a lot to like with this report. What stood out was the strong upside revs an especially the adjusted EBITDA results. On the latter, DASH reported above the high end of guidance after reporting within range last quarter. DASH also guided to significant sequential growth in Q3. Finally, we remember a few years ago that investors were concerned that DASH would not perform well post-COVID when everyone ordered delivery. However, we think that concern can be put to bed. DASH has continued to grow nicely since then and has expanded into new areas.
Lyft delivers record Gross Bookings, but EPS miss and Uber's shadow loom large (LYFT)
Lyft’s (LYFT) Q2 earnings report presented a mixed picture, with the company missing EPS expectations but achieving record Gross Bookings of $4.5 bln, up 12% yr/yr, within its guidance range of $4.41-$4.57 bln. However, Uber’s (UBER) robust Q2 performance, which included 18% Gross Bookings growth, set a high bar that LYFT failed to meet, underscoring its ongoing struggle to maintain market share against its larger rival. LYFT’s Q3 Gross Bookings guidance of $4.65-$4.80 bln, implying 13-17% growth, further highlights this competitive gap, as UBER’s Q3 guidance projects stronger growth of 17-21%.
- LYFT saw Rides increase to 234.8 mln, up from 205.3 mln in the prior-year period, reflecting a 14% rise. New product offerings, such as Lyft Silver for older adults and premium luxury options, alongside strategic partnerships with United Airlines (UAL) and DoorDash (DASH), are driving this growth by enhancing rider engagement and expanding market reach across diverse demographics and use cases. These initiatives demonstrate LYFT’s focus on diversifying its service portfolio to capture incremental demand.
- On the profitability front, LYFT’s adjusted EBITDA reached a record $129.4 mln, up 26% yr/yr, hitting the high end of its $115-$130 mln guidance range. Key drivers include improved operational efficiency, reduced incentive costs, and higher adoption of premium ride-hailing services, which bolster margins despite competitive pricing pressures. For Q3, LYFT guided adjusted EBITDA to $125-$145 mln, aligning closely with analyst expectations and signaling continued discipline in cost management.
- LYFT’s autonomous vehicle (AV) strategy is a cornerstone of its long-term growth plan, with partnerships like Baidu (BIDU) and May Mobility positioning it to capitalize on the AV market’s potential. The $197 mln FREENOW acquisition, completed on July 31, 2025, provides access to 180 European cities and a 6.3 million-user base, offering a platform to scale AV services, particularly BIDU’s Apollo Go robotaxis, in a region prioritizing green mobility. However, integration challenges and reliance on third-party AV technology may temper LYFT’s ability to compete with UBER’s proprietary investments in self-driving tech.
LYFT’s Q2 results reflect solid Gross Bookings growth and notable profitability gains on an adjusted EBITDA basis, yet its slower growth compared to UBER highlights persistent competitive challenges. The company’s Q3 Gross Bookings guidance, while positive, fell short of investor expectations, suggesting LYFT must accelerate innovation and integration efforts to close the gap with its rival.
Shopify surges to 3-yr high on Q2 results; tariff and consumer concerns did not materialize
Shopify (SHOP +20%) is surging today after reporting its Q2 results this morning. The global e-commerce platform reported a substantial EPS beat, which marked the company's largest EPS beat in 13 quarters. Revenue increased 31.1% yr/yr to $2.68 bln, which was quite a bit above analyst expectations. It also surpassed SHOP's guidance of a mid-20's percentage growth rate. This now marks 4 consecutive quarters where SHOP has achieved yr/yr growth of at least 26%, and encouragingly, management expects revenue for Q3 to grow at a mid-to-high 20's percentage rate. Investors are pleased to see SHOP continue its strong performance despite the current macro uncertainties.
- Revenue was driven by GMV growth across all of SHOP's geographies. What stood out to us is that total GMV had a nice acceleration from Q1, growing 31% yr/yr compared to 23%. Key growth areas, including offline GMV and B2B GMV, also had strong quarters. Offline increased 29% yr/yr relative to a 23% increase in Q1 and B2B had another quarter of triple digit yr/yr growth at 101%.
- The GMV outperformance was driven by strength in North America, with particular strength among plus merchants and continued strength in Europe. The US, its largest market, had GMV and revenue accelerate in the quarter, which tells us its US consumer is in better shape than feared. Notably, management pointed out it did not see any drop in US demand, whether inbound, outbound or local.
- Its international GMV accelerated throughout the quarter, up 42% yr/yr compared to 31% in Q1. SHOP's international regions are contributing more to growth in each quarter, with Europe continuing to be a bright spot. Europe's GMV grew 49% yr/yr, a nice acceleration from 36% last quarter.
- Another positive was that SHOP had included a potential tariff impact in its guidance, but it did not materialize throughout the quarter. Additionally, its merchants have adapted well to the changing environment and continue to perform well. Management noted that recent AI initiatives, such as Sidekick, are helping merchants address current business challenges.
Overall, SHOP's results this quarter were impressive. While investors were likely expecting another strong quarter from SHOP, its results exceeded vaulted expectations. The GMV outperformance and the acceleration of many key metrics, specifically in the US, are encouraging to investors. In addition, management's commentary surrounding US demand and tariff impacts are also positives.
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