Market Snapshot
| Dow | 45565.23 | +147.16 | (0.32%) | | Nasdaq | 21588.75 | +45.87 | (0.21%) | | SP 500 | 6481.40 | +15.46 | (0.24%) | | 10-yr Note |
|
|
|
| | NYSE | Adv 1685 | Dec 1034 | Vol 964.15 mln | | Nasdaq | Adv 2516 | Dec 1959 | Vol 8.14 bln |
Industry Watch
| Strong: Real Estate, Energy, Information Technology |
| | Weak: Communication Services |
Moving the Market
Market anticipates NVIDIA's (NVDA) earnings report after the close today
Curve steepening in the treasury market
Friday's PCE report set to be a driver of near-term rate cut expectations
|
S&P 500 notches record highs ahead of NVIDIA's earnings
27-Aug-25 16:25 ET
Dow +147.16 at 45565.23, Nasdaq +45.87 at 21588.75, S&P +15.46 at 6481.40
[BRIEFING.COM] The stock market captured modest but broad-based gains today that propelled the S&P 500 (+0.2%) to a new record intraday (6,487.03) and closing high (6,481.40).
The Nasdaq Composite (+0.2%) and DJIA (+0.3%) also finished higher, while the Russell 2000 (+0.7%) and S&P Mid Cap 400 (+0.7%) outperformed, as steady September rate cut expectations provided an added tailwind for small-cap and mid-cap names.
Though the size of today's gains was not particularly eye-opening, the scope of their breadth reflected a market that trades cautiously optimistic ahead of NVIDIA's (NVDA 181.60, -0.17, -0.09%) earnings report and Friday's PCE report.
Advancers outpaced decliners by a greater than 8-to-5 ratio on the NYSE and a roughly 4-to-3 clip on the NASDAQ.
Eight S&P 500 sectors advanced, with only the communication services (-0.1%) sector incurring a modest loss, while the health care and industrials sectors finished flat.
The energy sector (+1.2%) posted the widest gain today, supported by crude oil futures settling today's session $0.89 higher (+1.4%) at $64.14 per barrel.
Steady improvement throughout the session in the information technology sector (+0.5%) contributed to the closing gains across the major averages. While NVIDIA's upcoming earnings dominated headline buzz today, the stock itself finished slightly lower, and the PHLX Semiconductor Index (+0.3%) performed in line with the broader market.
Software stocks were the top movers within the sector, with strength following MongoDB's (MDB 295.70, +81.36, +37.96%) impressive beat-and-raise earnings report yesterday afternoon. Datadog (DDOG 131.75, +5.44, +4.31%), ServiceNow (NOW 888.24, +23.58, +2.73%), and Salesforce (CRM 250.06, +6.32, +2.59%) were among the packaged software names that posted nice gains today.
Earnings also contributed to strength among retail names, with shares of Kohl's (KSS 16.16, +3.12, +23.93%) surging after an EPS beat. PVH (PVH 81.78, -0.71, -0.86%) and Abercrombie & Fitch (ANF 95.50, -1.24, -1.28%) finished lower despite posting earnings beats, and the SPDR S&P Retail ETF added 1.8% today.
Headlines remained fairly subdued today, with attention still centered on President Trump's dismissal of Fed Governor Lisa Cook, a move that has already set the stage for a legal battle.
In a CNBC interview, New York Fed President John Williams (FOMC voter) described Ms. Cook as highly respected but declined to comment on the allegations against her. On monetary policy, Mr. Williams said that if inflation data evolves as he anticipates, gradual rate cuts would be appropriate, though policy must remain guided by incoming data.
He also noted that if PCE inflation is 2.9%, he attributes 40-50 basis points to tariff effects. Meanwhile, the probability of a 25-basis point cut at the September FOMC meeting held steady at 87.2%, according to the CME FedWatch tool.
Looking ahead, Friday's PCE report will provide a key update on inflation trends, but for now, market participants are squarely focused on NVIDIA's earnings, which are expected to be a defining catalyst for near-term market direction.
U.S. Treasuries ended Wednesday on a mostly higher note, while the long bond could not avoid a slightly lower finish. The 2-year note yield settled down six basis points to 3.62%, the 10-year note yield settled down two basis points to 4.24%, and the 30-year note yield settled unchanged for the day at 4.91%.
- Nasdaq Composite: +11.8% YTD
- S&P 500: +10.2% YTD
- DJIA: +7.1% YTD
- Russell 2000: +6.4%
- S&P Mid Cap 400: +4.6% YTD
Reviewing today's data:
- The weekly MBA Mortgage Index was down 0.5% after falling 1.4% a week ago. The Refinance Index was down 3.5% while the Purchase Index rose 2.2%.
Major averages holding gains ahead of NVIDIA's earnings
27-Aug-25 15:25 ET
Dow +148.36 at 45566.43, Nasdaq +20.90 at 21563.78, S&P +12.52 at 6478.46
[BRIEFING.COM] The major averages are holding on to modest gains that push the S&P 500 (+0.2%) and Nasdaq Composite (+0.1%) into positive territory for the week, while the DJIA (+0.3%) still holds a modest 0.1% week-to-date loss.
Attention turns to NVIDIA (NVDA 181.72, -0.06, -0.03%), which will report its earnings around 4:20 PM ET.
The current FactSet consensus calls for adjusted EPS to grow 49% year-over-year to $1.01, while revenue is expected to grow 53% year-over-year to $46.05 billion.
NVIDIA tends to provide revenue and gross margin guidance for the next quarter. Current guidance for Q2 stands at revenue of $44.10-45.90 billion and non-GAAP gross margin of 71.5-72.5%. The company is continuing to work toward achieving gross margins in the mid-70% range late this year.
NVIDIA previously said its Q2 outlook reflects a loss in H20 revenue of approximately $8 billion due to the recent export control limitations. However, NVIDIA subsequently resumed some sales to China with a new 15% fee imposed by the US government on Chinese chip sales. This may explain why Q2 revenue consensus is above prior guidance.
The stock is up 92.7% from its April 4 lows, while the S&P 500 is up 27.7% in that same time span.
Fresh record high for S&P 500
27-Aug-25 14:55 ET
Dow +187.51 at 45605.58, Nasdaq +53.43 at 21596.31, S&P +19.41 at 6485.35
[BRIEFING.COM] The S&P 500 (+0.3%) pushed past resistance from earlier in the session to set a new all-time high at 6,487.03. The Nasdaq Composite (+0.3%) and DJIA (+0.4%) also trade at their best levels of the session.
The improved standing of the major averages follows widening gains in the energy (+0.4%) and information technology (+0.5%) sectors, the day's top-performing S&P 500 sectors.
The technology sector continues to benefit from strength in its software components, while semiconductors perform in line with the broader market (the PHLX Semiconductor Index is up 0.3).
NVIDIA (NVDA 181.92, +0.15, +0.08%) continues to trade flattish ahead of its earnings release this afternoon.
Additionally, the market benefits from a narrower loss in the communication services sector (-0.1%), as Meta Platforms (META 747.88, -6.22, -0.82%) and Netflix (NFLX 1223.78, -2.31, -0.19%) are both modestly improved for the day, while Alphabet (GOOG 207.98, +0.03, +0.01%) remains flat.
S&P 500 climbs; Albemarle, CarMax, Wynn lead gains as Paramount Skydance sinks on Morgan Stanley cut
27-Aug-25 14:30 ET
Dow +173.98 at 45592.05, Nasdaq +65.07 at 21607.95, S&P +20.22 at 6486.16
[BRIEFING.COM] The S&P 500 (+0.31%) is in second place on Wednesday afternoon, up about 20 points.
Briefly, S&P 500 constituents Albemarle (ALB 87.50, +5.97, +7.32%), Carmax (KMX 62.09, +2.42, +4.06%), and Wynn Resorts (WYNN 123.44, +4.36, +3.66%) pepper the top of the standings despite a dearth of corporate news.
Meanwhile, Paramount Skydance (PSKY 14.94, -0.90, -5.68%) is today's worst laggard after Morgan Stanley cut its target to $10 and kept an Underweight, signaling limited upside post-merger as its OIBDA outlook and UFC rights deal failed to offset profitability concerns.
Gold rises $15.50 as Fed uncertainty, political risk outweigh dollar, yield pressure
27-Aug-25 14:00 ET
Dow +148.16 at 45566.23, Nasdaq +44.73 at 21587.61, S&P +15.42 at 6481.36
[BRIEFING.COM] The tech-heavy Nasdaq Composite (+0.21%) is the worst-performing major average to this point on Wednesday, albeit on gains of more than 44 points.
Gold futures settled $15.50 higher (+0.5%) at $3,433/oz; the rise comes amid a swirl of conflicting market forces: a firming U.S. dollar and rising Treasury yields exert modest pressure, but these were offset by heightened political risk and growing expectations of a dovish Federal Reserve. Investors are rattled by President Trump's threat to fire Fed Governor Lisa Cook, an action that could undermine central bank independence and spook markets, while markets are increasingly pricing in an 87% chance of a 25 basis-point rate cut at the Fed's September meeting. This cocktail of monetary policy uncertainty and geopolitical risk continues to buoy gold as a safe-haven asset.
Meanwhile, the U.S. Dollar Index is now down -0.1% to $98.19.
J.M. Smucker's Q1 results and outlook pressured by rising coffee prices, weak snack category (SJM)
J.M. Smucker's (SJM) 1Q26 earnings report revealed a modest EPS miss amid a challenging consumer environment marked by persistent inflation and selective consumer spending. While the company reaffirmed its FY26 adjusted EPS guidance at $8.50-$9.50, the midpoint of $9.00 still falls below the Street's expectations, signaling potential margin compression from elevated input costs and tariff-related headwinds. This conservative outlook, coupled with a 1% decline in net sales to $2.11 bln, has sparked investor disappointment, triggering a sharp selloff in the stock.
- A pressing concern weighing on profitability is the escalation in coffee prices, exacerbated by U.S. tariffs on imports from key suppliers like Brazil and Vietnam, which represent the bulk of Smucker's green coffee sourcing. The U.S. Retail Coffee segment, encompassing Folgers and Dunkin' brands, posted 15% net sales growth to $717.2 mln, propelled by an 18-percentage-point uplift from net price realization as the company implemented multiple hikes to offset record-high commodity costs. However, segment profit plummeted by $38.4 mln to $134.2 mln, reflecting the pass-through nature of coffee pricing and unfavorable volume/mix dynamics, where consumers are trading down amid broader inflationary strains.
- Management had previously noted that tariffs alone are embedding a $0.25 per share drag on FY26 EPS, prompting further pricing actions in May and August, though elasticity has been more favorable than historical norms. This dynamic highlights the vulnerability of SJM's largest segment -- accounting for about 34% of total revenue -- to external shocks, yet also its pricing power in a resilient at-home coffee category.
- Compounding these pressures, a broader pullback in discretionary spending has prompted consumers to favor value-oriented private-label alternatives, hammering the snack category and mirroring challenges faced by peers like PepsiCo (PEP). This headwind persisted into Q1, with the Sweet Baked Snacks segment -- while bolstered by the Hostess acquisition -- still experiencing a 10% decline in net sales to approximately $251 mln, even excluding the impact of the Voortman divestiture in December 2024.
- Volume/mix eroded net sales by 8 percentage points, largely attributable to weakness in snack cakes as households prioritize essentials over indulgent treats. SJM's SKU rationalization efforts, targeting underperforming long-tail items, are expected to yield $30 mln in savings starting in 4Q26, but near-term stabilization remains elusive amid elevated marketing investments to rebuild share.
- Amid these headwinds, momentum in the Uncrustables frozen sandwich brand provided a notable bright spot, though it failed to fully counteract softness elsewhere in the U.S. Retail Frozen Handheld and Spreads segment, where net sales dipped 2% to $449.8 mln. Uncrustables delivered double-digit growth, fueled by national advertising, distribution expansions into over 30,000 convenience stores, and innovations like the peanut butter and raspberry variety. Management also reaffirmed its trajectory toward $1 bln in annual net sales by FY26 end.
- However, weakness in fruit spreads and Jif peanut butter -- hit by pricing pressures and a shift in promotional timing -- exacerbated the segment's challenges, with volume/mix declines and lapping prior-year innovations contributing to the downturn. Segment operating income fell by $4.7 mln, reflecting higher costs and pre-production expenses from capacity expansions, including the new Alabama facility.
SJM's Q1 results and FY26 guidance underscore the dual pressures of surging coffee and peanut butter prices -- amplified by tariffs and commodity inflation -- as well as sluggish demand in the snack category, which collectively drove the EPS miss and a midpoint below consensus. While strategic pricing and Uncrustables' robust trajectory offer defensive qualities, stronger results may not materialize until tariff resolutions unfold and as consumer spending recovers.
Kohl's surges as Q2 EPS beat highlights turnaround and increased focus on consumer value (KSS)
Kohl's (KSS +17%) is surging today after reporting its Q2 (Jul) results this morning. This omnichannel retailer beat handily on EPS estimates, delivering its largest EPS beat in 5 quarters. While revenue declined 5% yr/yr, the drop was in line with expectations. Heading into the report, KSS had been under pressure, trending lower since early 2024 and hitting multi-year lows after its Q4 (Jan) results, before climbing higher following its Q1 (Apr) report in May. The outsized move today reflects growing investor optimism that the company's strategic initiatives are beginning to take hold.
- Kohl's initiatives center on three key priorities, all rooted in putting the customer first. First, the company is offering a more balanced assortment that better meets customer needs. Second, it is working to reestablish the brand as a leader in value and quality. Finally, Kohl's is enhancing the shopping experience across its omnichannel platform. The emphasis on value is particularly relevant in today's environment, as highlighted by recent reports from TJX (TJX) and Ross Stores (ROST).
- KSS noted that consumers remain pressured and increasingly selective with their purchases. Specifically, its lower to middle income customers are the most challenged, prioritizing value and trading down to lower priced products. In response, KSS has invested more in its proprietary brands and expanded the number of coupon-eligible offerings.
- As a result, its proprietary brands had sales increase 500 bps sequentially, with comp sales of -3%. This fall, KSS plans to expand its Flex brand into the kids' category, one of its softest categories in Q2. Additionally, broader coupon eligibility drove an 800-bps yr/yr increase in coupon-related sales penetration.
- In total, comp sales were -4.2% in the quarter, driven by fewer transactions, particularly in stores. Importantly, KSS did see traffic improve in both of its channels throughout the quarter with positive traffic in July. Its gross margin expanded 28 bps yr/yr to 39.9%, driven by category mix benefits and inventory management, reflecting the impact of its investments in proprietary brands.
- Another positive was the company's full-year guidance. It narrowed its expected sales decline to 5-6% from 5-7% and comp sales to -4-5% from -4-6%. We compute revenue as $14.46-14.62 bln. Also, it raised its full year EPS guidance pretty significantly to $0.50-0.80 from $0.10-0.60.
Overall, this was a strong quarter for Kohl's after a period of challenges. Its substantial EPS beat and narrowed full-year guidance reflect that its strategic initiatives are gaining traction, adding to investor optimism. With improvement in its proprietary brands, coupon penetration, and traffic trends, the company appears well-position to continue its turnaround momentum.
Okta nicely higher on Q2 results; was notably more positive on this call than Q1
Okta (OKTA +3%) is making a strong move higher following upside Q2 (Jul) results last night. Okta, which is a cybersecurity company focused on identity and access management, grew revenue 12.7% yr/yr to $728 mln. That was nicely above analyst expectations, following more modest upside in Q1. Okta also provided upside revs for Q3 (Oct) and upside EPS/revs for FY26. Investors were disappointed with guidance last time, so it was good to see the more bullish outlook.
- Something that stood out was Okta sounding much more bullish and confident on the Q2 call than it did on the Q1 call. Okta saw particular strength with large customers, Auth0 new products, the public sector and cash flow.
- The guidance / commentary on the Q1 call tripped the stock up in May, which caused a gap down and subsequent pressure in the share price this summer. The caution stemmed from uncertainty in the macro and its federal vertical. However, Okta said on the call last night that those fears never materialized and it has now removed them from its outlook for the remainder of the year.
- While Okta did experience some contract restructuring with civilian agencies and delays in procurement processes, renewals across all of federal were strong. Okta benefitted from multiple new business and upsell deals with DoD and state agencies in Q2. In fact, five of its top 10 deals in Q2 were with the US public sector, including its largest deal of the quarter, which was secured with a DoD agency.
- Okta also addressed some big news in the cybersecurity identity space. On July 30, Palo Alto Networks (PANW) announced it will acquire CyberArk (CYBR), which focuses on Identity Security. Okta noted that it pioneered the modern identity market. As platform companies (PANW) enter the market, Okta believes it underscores Identity's central role in security and the importance of Okta's independence and neutrality.
- To this day, Okta says it remains the only modern, comprehensive cloud native platform built to secure every identity, from employees to customers to non-human machine identities to AI agents. Okta believes the transaction further validates the importance of identity, but will not meaningfully change the competitive landscape.
As we said in our preview, we believed that investors were understandably cautious heading into this Q2 report given the warning signs outlined by Okta on the Q1 call. The key takeaway is that Okta put many of those fears to bed and removed those obstacles from its guidance. Given the good amount of negativity priced into Okta, we are a bit surprised the stock is not even higher on this report and especially the guidance. Perhaps investors wanted to see even stronger upside guidance.
MongoDB soars as robust Atlas growth fuels impressive Q2 beat-and-raise performance (MDB)
MongoDB's (MDB) 2Q26 earnings report delivered a resounding beat on both revenue and EPS, coupled with an upward revision to full-year guidance, underscoring the company's resilient execution amid a macroeconomic backdrop that continues to test enterprise spending priorities. The primary driver behind these strong results and the optimistic outlook is the accelerating growth of Atlas, MDB's cloud database platform, which accounted for 74% of total revenue compared to 72% in the prior quarter.
This expansion reflects robust adoption of cloud-native workloads, particularly among enterprises modernizing legacy systems and startups leveraging Atlas for scalable, developer-friendly data management. Complementing this momentum, MDB added 2,800 customers during the quarter, bringing the total to over 59,900 as of July 31, 2025, a testament to the platform's broad appeal across self-serve and direct sales channels.
- This quarter's performance marks back-to-back strong showings for Atlas, with growth accelerating to 29% yr/yr following a solid 26% in 1Q26, a stark contrast to the disappointing 4Q25 results that triggered a sharp stock plunge. That earlier quarter's EPS and revenue outperformance was artificially bolstered by an unexpected $50 mln contribution from multiyear non-Atlas deals, which management explicitly described as non-recurring and flagged as creating a headwind for the current year. At the time, MDB tempered expectations by signaling that Atlas growth would moderate, citing potential consumption slowdowns and a shift toward more predictable enterprise agreements.
- However, that cautious forecast has demonstrably not materialized, as evidenced by the quarter's broad-based strength in U.S. large-customer workloads and consistent consumption trends aligning with or exceeding prior-year rates.
- A key structural tailwind emerging from Atlas's dominance is the meaningful uplift to overall margins and bottom-line profitability, as the higher-margin cloud segment increasingly displaces lower-margin on-premises offerings. Non-GAAP gross margins held steady at 74%, but the real story lies in the dramatic expansion of non-GAAP EPS to $1.00 from a loss of $(0.70) in the year-earlier period, reflecting not only revenue leverage but also disciplined cost management amid ongoing investments in R&D and sales capacity.
- MDB's strategic emphasis on AI product innovations and ecosystem expansion further bolsters its competitive moat, positioning it as an indispensable layer in the burgeoning AI infrastructure stack. Central to this is the Voyage AI suite, following the acquisition earlier this year, with recent launches including voyage-context-3 for full-document context embeddings that enhance retrieval accuracy without manual metadata tweaks, alongside rerank-2.5 for instruction-guided reranking that refines results for more precise RAG workflows.
- Complementing these advancements, MDB has deepened partnerships with leading AI providers, notably expanding its integration with LangChain to streamline agentic workflows and semantic caching, enabling developers to build production-grade AI applications with reduced latency and hallucinations. This ecosystem play -- encompassing over 8,000 AI startups and integrations with hyperscalers like Amazon (AMZN) Web Services AWS and Google Cloud (GOOG) -- underscores MDB's pivot from a general-purpose database to an AI-native platform.
MDB's beat-and-raise quarter reaffirms its leadership in the cloud database space, with Atlas's impressive 29% growth serving as the unequivocal catalyst for the performance and the ensuing stock surge. With shares soaring higher, the market appears to be repricing MDB's valuation in recognition of its sustained trajectory as a high-growth infrastructure play in the AI and cloud eras.
|
