Market Snapshot
| Dow | 45418.07 | +135.60 | (0.30%) | | Nasdaq | 21542.88 | +94.98 | (0.44%) | | SP 500 | 6465.94 | +26.62 | (0.41%) | | 10-yr Note |
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| | NYSE | Adv 1435 | Dec 1275 | Vol 1.48 bln | | Nasdaq | Adv 2685 | Dec 1771 | Vol 9.12 bln |
Industry Watch
| Strong: Health Care, Industrials, Information Technology, Materials, Financials |
| | Weak: Communication Services, Consumer Staples, Energy, Real Estate |
Moving the Market
Profit-taking following Friday's broad-based rally
Positioning ahead of this Friday's PCE Report
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Modest advance as rate cut expectations climb
26-Aug-25 16:30 ET
Dow +135.60 at 45418.07, Nasdaq +94.98 at 21542.88, S&P +26.62 at 6465.94
[BRIEFING.COM] The stock market closed modestly higher on Tuesday, extending yesterday's muted action as investors navigate profit-taking from Friday's rally and developments around monetary policy expectations.
The Nasdaq Composite (+0.4%) entered positive territory for the week, while the S&P 500 (+0.4%) finished with a similar gain, and the DJIA (+0.3%) finished with a slightly narrower gain.
Small-cap names outperformed, with the Russell 2000 climbing 0.8%.
A late-session rally also saw the Vanguard Mega Cap Growth ETF finish with a 0.6% gain for the day
Sector performance was mixed but improved slightly throughout the day, ultimately seeing seven S&P 500 sectors capture gains.
The industrials sector (+1.0%) led the advance, with strength in defense companies seeing the iShares US Aerospace & Defense ETF (+2.2%) notch record highs.
The financials sector (+0.8%) also captured a nice gain as the majority of its constituents traded modestly higher.
The information technology sector (+0.5%) steadily climbed throughout the session, with gains in its chipmaker components resulting in a 1.0% advance in the PHLX Semiconductor Index. NVIDIA (NVDA 181.70, +1.89, +1.05%) traded nicely higher ahead of its earnings report tomorrow afternoon, which is set to be one of the most anticipated happenings this week.
Elsewhere, the health care sector (+0.6%) benefitted from shares of Eli Lilly (LLY 736.10, +40.77, +5.86%) trading higher after announcing positive late-stage results for its experimental oral obesity and diabetes drug, orforglipron. Eli Lilly's gains helped offset a late slide in UnitedHealth (UNH 300.42, -4.44, -1.46%) after headlines crossed that the ongoing criminal probe of the company is broader in scope than its alleged Medicare wrongdoings.
Declines were modest in nature today, as the consumer staples (-0.5%), communication services (-0.3%), real estate (-0.3%), and energy (-0.2%) sectors finished decently above their session lows.
While there was a fair share of stock-specific headlines throughout the session, the bulk of today's news coverage centered around President Trump's firing of Fed Governor Lisa Cook. Ms. Cook stated through a lawyer that she intends to challenge the legality of the firing and will not resign from her duties, setting up a legal battle.
President Trump stated at a cabinet meeting that he knew there would be a legal fight with the firing of Fed Governor Lisa Cook, and he is prepared for it. The president said he has somebody in mind to replace her, which suggests that he might flip Stephen Miran to her seat since the term is longer.
After a tentative start, rate cut expectations improved as the session progressed, with the CME FedWatch tool now assigning an 89.3% chance of a 25-basis point cut at the September FOMC meeting, up from 83.7% the day prior.
Richmond Fed President Tom Barkin (FOMC non-voter) stated that he forecasts a modest adjustment in rates, citing modest movement in the economy but noting that his forecast could change.
U.S. Treasuries had a mixed showing on Tuesday, as the 10-year note and shorter tenors recovered their losses from Monday, while the long bond underperformed after finishing ahead during yesterday's session. The Treasury complex reached highs shortly after today's $69 billion 2-year note sale, which met solid demand, though foreign interest remained below average.
The 2-year note yield settled down five basis points to 3.68%, the 10-year note yield settled down two basis points to 4.26%, and the 30-year note yield settled up two basis points to 4.91%.
- Nasdaq Composite: +11.6% YTD
- S&P 500: +9.9% YTD
- DJIA: +6.8% YTD
- Russell 2000: +5.8% YTD
- S&P Mid Cap 400: +4.0% YTD
Reviewing today's data:
- July Durable Orders 2.8% (Briefing.com consensus -3.5%); Prior was revised to -9.4% from -9.3%, July Durable Goods - ex transportation 1.1% (Briefing.com consensus 0.1%); Prior was revised to 0.3% from 0.2%
- The key takeaway from the report is that nondefense capital goods orders excluding aircraft—a proxy for business investment—increased 1.1% in July after falling 0.6% in June, making this a generally positive report.
- June FHFA Housing Price Index -0.2% (Briefing.com consensus -0.1%); Prior was revised to -0.1% from -0.2%
- June S&P Case-Shiller Home Price Index 2.1% (Briefing.com consensus 2.8%); Prior 2.8%
- August Consumer Confidence 97.4 (Briefing.com consensus 96.3); Prior was revised to 98.7 from 97.2
- The key takeaway from the report is that the August downtick was due to decreases in the Present Situation Index and the Expectations Index, though the overall confidence index has not changed much since the report for May.
Major averages at session highs near day's end
26-Aug-25 15:25 ET
Dow +110.42 at 45392.89, Nasdaq +63.71 at 21511.61, S&P +19.13 at 6458.45
[BRIEFING.COM] The major averages continue to chart session highs this afternoon, keeping them seated with modest gains for the day.
The industrials sector (+0.8%) maintains its position as the best-performing S&P 500 sector, with shares of GE Aerospace (GE 271.96, +5.34, +2.00%) trading higher after reports that the State Department has made a determination approving a possible Foreign Military Sale to the Government of Poland of F-35 Sustainment and related elements of logistics and program support for an estimated cost of $1.85 billion.
A spokesperson for the Fed said in a statement that Fed Governor Lisa Cook will challenge her firing by President Trump in court, and that the Fed will continut to carry out its duties and abide by any court decision in regards to the firing.
Modest gains amid steady rate cut expectations
26-Aug-25 15:05 ET
Dow +45.92 at 45328.39, Nasdaq +47.40 at 21495.30, S&P +12.53 at 6451.85
[BRIEFING.COM] The S&P 500 (+0.2%), Nasdaq Composite (+0.2%), and DJIA (+0.1%) all sport modest gains as the market enters the final hour of the session.
Richmond Fed President Tom Barkin (FOMC non-voter) stated that he forecasts a modest adjustment in rates, citing modest movement in the economy but noting that his forecast could change.
The probability of a 25-basis point rate cut at the September FOMC meeting has held steady at 87.3% today, according to the CME FedWatch tool.
Separately, President Trump stated at a cabinet meeting that he knew there would be a legal fight with the firing of Fed Governor Lisa Cook, and he is prepared for it. President Trump said he has somebody in mind to replace her, which suggests that he might flip Stephen Miran to her seat since the term is longer
S&P 500 edges higher as LLY soars on obesity drug data; GE Vernova, Howmet rally while eBay sinks
26-Aug-25 14:30 ET
Dow +21.87 at 45304.34, Nasdaq +33.72 at 21481.62, S&P +8.14 at 6447.46
[BRIEFING.COM] The S&P 500 (+0.13%) is in second place on Tuesday afternoon, up about 8 points.
Briefly, S&P 500 constituents Eli Lilly (LLY 726.50, +31.17, +4.48%), GE Vernova (GEV 620.12, +17.81, +2.96%), and Howmet Aerospace (HWM 175.69, +4.45, +2.60%) dot the top of the standings. LLY outperforms after its oral obesity drug orforglipron delivered Phase 3 results at the high end of expectations, showing injectable-like weight loss with manageable safety, while GEV bucks recent weakness in the wind energy space, while HWM is among select defense stocks higher today on reports the Department of Defense is eyeing equity stakes in defense contractors.
Meanwhile, eBay (EBAY 93.58, -4.97, -5.04%) is one of today's top laggards.
Gold rises as Fed independence concerns spur safe-haven demand, rate cut bets
26-Aug-25 14:00 ET
Dow -2.26 at 45280.21, Nasdaq +17.42 at 21465.32, S&P +3.30 at 6442.62
[BRIEFING.COM] The tech-heavy Nasdaq Composite (+0.08%) is in first place on Tuesday afternoon, up about 17 points.
Gold futures settled $15.50 higher (+0.5%) at $3,433/oz, driven primarily by renewed safe-haven demand amid heightened uncertainty over Fed independence. Markets were unsettled after President Trump fired Fed Governor Lisa Cook, stirring concerns over political interference in central bank policymaking. The move revived expectations of a September interest rate cut, with CME's FedWatch tool showing pricing above 86% for a 25-basis-point cut, further bolstering gold's appeal in a low-yield environment.
Meanwhile, the U.S. Dollar Index is down -0.2% to $98.28.
Semtech surges on Q2 EPS beat and robust, record-setting data center growth (SMTC)
Semtech (SMTC) is surging in the wake of its 2Q26 earnings release as investors reward the company's continued execution amid a semiconductor landscape marked by AI-driven demand and supply chain stabilization. SMTC edged past Q2 EPS expectations by a penny, delivering non-GAAP earnings of $0.41, while revenue expanded nearly 20% yr/yr to $257.6 million, essentially matching analysts' estimates. This robust revenue growth underscores SMTC's strategic efforts to rationalize its portfolio -- streamlining underperforming segments -- and ramp up investments in core assets, particularly data centers, LoRa connectivity, and PerSe, each of which delivered outsized contributions to sales momentum and positioned the company for sustained margin expansion in a high-growth environment.
- Turning to the Infrastructure market, SMTC posted robust yr/yr net sales growth of 39% to $73.4 mln, a standout performer that highlights the company's deepening entrenchment in the exploding data center ecosystem. This surge was propelled by record revenue in the data center business, reaching $52.2 mln, up an impressive 92% yr/yr, fueled by strong adoption of its CyberEdge optical products, which notched record sales amid heightened demand for high-speed interconnects in AI and cloud infrastructure.
- Based on Q2's performance, SMTC anticipates continued strong opportunities for fiber edge demand through the remainder of the year and beyond, particularly from optical module customers serving North American cloud service providers, where design wins and production ramps are accelerating.
- While bookings and forecasts from optical module customers targeting China-based CSPs remained generally cautious due to persistent limits on GPU availability, the company has observed accelerated data center bookings over the past several weeks in this market, signaling a potential inflection point. Looking ahead, SMTC expects the data center market to sustain its multiyear growth cycle over the next several quarters, bolstered by innovations like 800G Linear-drive Pluggable Optics and Active Copper Cables, which promise up to 50% power savings and position the firm to capture a meaningful share of the $50 bln-plus interconnect TAM.
- In the high-end consumer end market, net sales advanced 11% yr/yr to $41.2 mln, demonstrating resilience in a segment prone to cyclicality and underscoring SMTC's competitive moat in premium devices. Notably, net sales in consumer TVs climbed 15% to nearly $30 mln, aligning with the typical seasonality tied to smartphone unit ramps and reflecting SMTC's robust content portfolio across multiple blue-chip customers.
- This growth trajectory outpaced overall handset volume expansion, reinforcing the company's conviction that it is steadily gaining content and market share -- attributable to its market-leading performance metrics, such as superior signal integrity and power efficiency, coupled with exemplary supply chain excellence that has minimized disruptions and enhanced reliability in a volatile global sourcing environment.
- The industrial end market also contributed meaningfully, with net sales rising 14% to $143 mln, driven by broadening adoption of SMTC's connectivity solutions in a diversifying array of applications. Within this segment, net sales of LoRa-enabled solutions reached $36.9 mln, up 29% yr/yr, supported by continued expansion across several end markets including smart cities, industrial automation, and asset tracking, where the technology's scalability has proven indispensable.
Overall, SMTCs Q2 results and in-line Q3 guidance affirm a trajectory of operational discipline and strategic focus, with the data center market emerging as the clear powerhouse, delivering triple-digit growth and setting the stage for outsized contributions in the quarters ahead.
HEICO is flying higher following upside JulQ results; repair and overhaul was the standout area(HEI)
HEICO (HEI +7%) is making a nice move higher after reporting strong Q3 (Jul) earnings results last night. This supplier of aircraft components beat handily on EPS. The standout metric was revenue jumping 15.7% yr/yr to $1.15 bln, its highest year/year revenue growth in the past four quarters.
- Its Flight Support Group segment, which sells jet engine and aircraft component replacement parts and is Heico's larger segment, saw sales increase 18% yr/yr to a record $802.7 mln in Q3. Segment results were fueled by continued growth and momentum in its aerospace aftermarket business. This segment has now achieved 20 consecutive quarters of sequential sales growth.
- The parts business grew in the low teens, pretty similar to Q2. Where Heico saw some really nice some growth was in its repair and overhaul and specialty products group. Repair and overhaul was up in the mid-teens, which helped gross margin. Also, Heico explained that its repair business is pretty much a parts play. Heico does not have hangars and it does not repair airplanes, but it sells components and that was a nice surprise during the quarter.
- Heico noted that President Trump's focus on defense and cost efficiency bodes well for the company. Heico feels it's well-positioned for this dynamic, given its lower cost, alternative aircraft replacement parts. This helps the government and taxpayers save money. Also, its Missile Defense Manufacturing business is experiencing significant growth driven by increased demand in both the US and its allies. Heico enjoys a substantial backlog of defense, missile defense orders and ongoing shortages.
- Its Electronic Technologies Group segment sells various types of electronic, data and microwave, and electro-optical products. Segment sales grew 10% yr/yr to a record $355.9 mln, fueled by sustained demand for most products, highlighted by strong organic sales growth for its other electronics, defense, and space products. Segment operating margin dipped to 22.8% from 23.5% a year ago, principally due to higher SG&A expenses caused by higher performance-based compensation expense.
Overall, this was a solid quarter for Heico. The stock had initially been up only slightly. However, once the earnings call started this morning, the stock really started to pick up following some bullish comments on the call. Its repair and overhaul business really performed well and should continue to perform well given the government's renewed focus on efficiency. Finally, the stock gapped higher following its Q2 report in late May, but stalled out, trading mostly sideways the last two months. This report has sparked another move higher.
AT&T eyes FWA and 5G expansion in $23 bln spectrum deal that resolves FCC probe for EchoStar (T)
Shares of EchoStar (SATS) are soaring higher on the announcement of its $23 bln spectrum sale to AT&T (T), with the stock surging by nearly 80%, reflecting investor relief amid the company's precarious financial and regulatory position. In contrast, AT&T shares are trading with modest gains, underscoring the deal's strategic fit for the telecom giant without immediate market exuberance. This transaction arrives at a pivotal moment, as the FCC has been investigating SAT's compliance with obligations to deploy 5G services across the U.S., including scrutiny over underutilized spectrum that drew complaints from competitors like SpaceX.
SATS had been actively seeking ways to protect its valuable wireless spectrum licenses from potential revocation by the FCC, and today's agreement effectively resolves those inquiries by transferring the assets to AT&T, which has the scale and intent to deploy them promptly.
- AT&T will acquire approximately 30 MHz of nationwide 3.45 GHz mid-band spectrum and about 20 MHz of nationwide 600 MHz low-band spectrum in an all-cash transaction. These licenses span virtually every U.S. market -- over 400 in total -- providing near-national footprint, and AT&T has signaled plans to integrate and deploy the mid-band licenses, which are fully compatible with its existing 5G infrastructure, as swiftly as regulatory allowances permit, potentially accelerating rollout within its multi-year capital investment framework.
- This acquisition fortifies AT&T's position as a converged connectivity leader, blending 5G wireless with fiber broadband to drive subscriber growth and ARPU uplift in a maturing market. Financially, the $23 bln outlay -- financed via cash on hand and incremental debt -- will temporarily elevate AT&T's net debt-to-EBITDA ratio to around 3x, but the company projects a return to its 2.5x target within three years, supported by accretive impacts to adjusted EPS and free cash flow starting in the third year post-close, while upholding its $20 bln share repurchase capacity through 2027.
- Strategically, the added 50 MHz of low- and mid-band spectrum bolsters AT&T's holdings, enabling denser network capacity and wider coverage to counter aggressive expansions from Verizon (VZ) and T-Mobile (TMUS), while pressuring Comcast's (CMCSA) Xfinity Mobile and Charter's (CHTR) Spectrum Mobile in the MVNO and fixed wireless arenas. There's a high probability that AT&T will leverage this to expand its AT&T Internet Air fixed wireless access (FWA) offering, which has already gained traction as a cost-effective alternative to fiber in underserved areas; moreover, bundling FWA with mobility plans could enhance customer retention and cross-sell opportunities, mirroring TMUS's successful playbook and positioning AT&T to capture more of the $100 bln-plus U.S. broadband market amid rising data demands.
- For SATS, the transaction's outsized impact on its shares stems from the lifeline it provides to a balance sheet strained by over $24 bln in debt and ongoing operational challenges in its wireless ambitions. The $23 bln infusion --nearly triple SAT's pre-deal market cap -- enables substantial debt paydown, alleviating default risks highlighted by recent delayed interest payments and averting potential bankruptcy scenarios that had loomed earlier in 2025.
- Complementing the sale, the expanded network services agreement transforms SATS into a hybrid mobile network operator (MNO), allowing Boost Mobile to persist as a competitive prepaid brand by leveraging AT&T's primary network infrastructure alongside residual TMUS access for seamless service, while decommissioning portions of its own radio access network to cut capex. This hybrid model preserves Boost's 1.3 mln subscribers and cloud-native 5G core without the full burden of nationwide buildout, providing SATS with a leaner path to profitability in wireless while insulating its core Dish TV, Sling, and Hughes satellite businesses from the upheaval.
Potential roadblocks remain, chief among them securing FCC approval, given the agency's oversight of spectrum transactions to prevent anticompetitive consolidation -- though the deal's structure, transferring underutilized assets to an active deployer like AT&T, mitigates concerns in most markets. Antitrust scrutiny from the DOJ could also arise, but precedents like TMUS's spectrum acquisitions suggest clearance is feasible absent market dominance issues. Overall, this $23 bln spectrum transaction represents a mutually beneficial pivot for AT&T and SATS, enabling the former to solidify its 5G leadership and FWA expansion while resolving the latter's regulatory and debt overhangs through a pragmatic hybrid model.
Crescent Energy to acquire Vital Energy in $3.1 bln deal, boosting Permian Basin scale (CRGY)
After the close last Friday, Reuters reported that Crescent Energy (CRGY) was in advanced talks to acquire Vital Energy (VTLE), driving VTLE’s shares up 15% in after-hours trading as investors anticipated a premium valuation. The deal, officially announced on August 25, 2025, is an all-stock transaction valued at approximately $3.1 bln, inclusive of VTLE’s $2.4 bln net debt, offering VTLE shareholders a 15% premium to VTLE’s 30-day volume-weighted average price as of August 22. This acquisition, which bolsters CRGY’s position in the energy sector, aligns with its strategy of disciplined growth through acquisitions, though the market’s initial reaction reflects concerns over the deal’s structure and VTLE’s significant debt burden.
- Shares of CRGY are trading sharply lower, down nearly 5% in premarket trading on August 25, primarily due to the all-stock nature of the transaction, which involves issuing 1.9062 shares of Crescent Class A common stock for each VTLE share. This structure dilutes existing CRGY shareholders, who will own approximately 77% of the combined company, while VTLE shareholders will hold 23%. The issuance of new shares increases CRGY’s share count, potentially pressuring per-share metrics in the near term, and the assumption of VTLE’s $2.4 bln debt adds financial risk, contributing to investor skepticism despite the strategic merits of the deal.
- Strategically, the acquisition positions the combined entity as a top 10 independent U.S. energy producer, significantly enhancing CRGY's footprint in the Permian Basin, alongside its existing operations in the Eagle Ford and Uinta Basins. VTLE brings 265,306 largely contiguous net acres in the Permian, with 24,000 net acres in the Delaware Basin and 11,200 in the Midland Basin, complementing CRGY’s Texas and Rocky Mountain assets.
- The combined company is expected to achieve total production potential exceeding 400 MBoe/d, leveraging VTLE’s high-quality, low-risk inventory and CRGY’s expertise in scaling operations, particularly in the oil and condensate windows of the Eagle Ford and the high-value crude-producing Uinta Basin.
- Financially, CRGY projects the acquisition to be accretive across key metrics -- cash flow from operations (CFFO), free cash flow (FCF), and net asset value (NAV) per share -- with immediate annual synergies of $90-$100 mln and potential for further operating efficiencies. CRGY’s Q2 performance already demonstrated strength, with record production of 263 MBoe/d, generating $171 mln in free cash flow, supported by a 37.5% yr/yr revenue increase to $898 mln.
- VTLE’s Q2 production of 137.9 MBoe/d, near the high end of its 133.0-139.0 MBoe/d guidance, adds significant scale, enhancing CRGY’s cash flow profile. The company’s $1 bln non-core divestiture pipeline further strengthens its balance sheet, mitigating concerns over VTLE’s debt load. As of June 30, 2025, VTLE's long-term debt stood at $2.3 bln.
While CRGY’s shares face near-term pressure from the all-stock deal’s dilutive impact and VTLE’s debt assumption, the acquisition of VTLE is a strategic and financial fit, creating a scaled, free cash flow-focused operator with a robust Permian Basin presence. The deal’s projected synergies and accretion across key metrics, combined with CRGY’s strong operational momentum, position the combined company for long-term value creation, despite initial market headwinds.
Keurig Dr Pepper is hoping acquiring coffee giant and separating will perk up its fortunes (KDP)
There was some big M&A news in the beverage space this morning. Keurig Dr Pepper (KDP -8%) announced plans to acquire Amsterdam-based JDE Peet's for €31.85 per share in cash, a 20% premium to Friday's close, for a total equity value of €15.7 bln. The deal pairs KDP's Keurig single-serve coffee platform with JDE Peet's portfolio of beloved coffee brands. KDP forecasts $400 mln in cost synergies and that the deal will be immediately EPS accretive.
- And that's not all. After the acquisition closes, KDP plans to separate into two independent, yet to be named, US-listed publicly traded companies. This will create a growth-focused North America refreshment beverage company ("Beverage Co.") and the world's #1 pure-play coffee company ("Global Coffee Co.").
- Each business will have a distinct growth model and specific capital allocation priorities. CEO Tim Cofer will be CEO of "Beverage Co." and CFO Sudhanshu Priyadarshi to be CEO of "Global Coffee Co." upon separation.
- On the coffee side, it will be the number one global category pure play as its brings together Keurig's single-serve coffee platform with JDE Peet's portfolio, creating a global leader across all coffee segments and markets. JDE Peet's is so compelling to KDP because it owns iconic brands and is highly profitable with $11+ bln in annual sales and almost $2 bln in adjusted EBITDA. JDE Peet's is huge outside the US with leadership positions in 40 markets. However, its US business is largely limited to Peet's. Keurig sees an opportunity to boost its US presence, the largest coffee market in the world.
- On the beverage side, KDP envisions a growth-oriented, agile company. It's the largest flavored carbonated soft drink portfolio in the US, led by powerhouse $5 bln+ brand Dr Pepper and $1 bln+ brand Canada Dry, as well as iconic favorites like 7UP and A&W, and more than $3 bln in high-growth categories like energy and functional beverages.
Briefing.com is generally a fan when companies separate, especially when we do not see a lot of synergies between the segments, like we do here with coffee and carbonated soft drinks. We also suspect the recent 50% tariffs levied on Brazil were part of the calculation for this deal. Brazil is the world's largest producer and exporter of coffee, accounting for about 30--35% of the global coffee market. While the tariffs may be short term, KDP has warned of margin pressures in 2H. Growing in scale is a good way to combat this. Finally, KDP is sharply lower on the deal, we think investors are perhaps not thrilled about the pretty hefty premium being paid.
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