Market Snapshot
| Dow | 45295.81 | -249.07 | (-0.55%) | | Nasdaq | 21279.63 | -175.92 | (-0.82%) | | SP 500 | 6415.54 | -44.72 | (-0.69%) | | 10-yr Note |
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| | NYSE | Adv 878 | Dec 1882 | Vol 1.07 bln | | Nasdaq | Adv 1577 | Dec 3039 | Vol 8.22 bln |
Industry Watch
| Strong: Energy, Health Care, Consumer Staples |
| | Weak: Information Technology, Financials, Industrials, Consumer Discretionary, Communication Services, Real Estate, Materials, Utilities |
Moving the Market
Tariff uncertainty after federal appeals court ruled most of President Trump's global tariffs are illegal
Continued weakness in mega-cap names
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Stocks move lower amid tariff uncertainty
02-Sep-25 16:35 ET
Dow -249.07 at 45295.81, Nasdaq -175.92 at 21279.63, S&P -44.72 at 6415.54
[BRIEFING.COM] The S&P 500 (-0.7%), Nasdaq Composite (-0.8%), and Dow Jones Industrial Average (-0.6%) closed lower in the first session of September as investors grappled with elevated valuations, seasonal concerns, and the fallout from a U.S. Court of Appeals ruling that most of President Trump’s enacted tariffs are illegal.
All current levies will remain in place until October 14 pending a potential Supreme Court appeal, with President Trump seeking an expedited ruling from the Supreme Court, according to CNBC.
Stocks largely retreated, with all eleven S&P 500 sectors spending time in negative territory, though some modest late-session buying interest saw equities improve before the close.
Eight S&P 500 sectors would finish with losses, with advancers outpacing decliners by a greater than 2-to-1 ratio on the NYSE and Nasdaq.
The real estate (-1.7%), industrials (-1.1%), information technology (-1.0%), consumer discretionary (-1.0%), and financials (-0.7%) closed with the widest losses.
Mega-cap weakness played a pivotal role in today's early retreat, but late "buy the dip" interest saw the market's largest names lead the modest bounce off of session lows.
NVIDIA (NVDA 170.74, -3.44, -1.97%) had a particularly volatile session, trading with losses wider than 3.0% at session lows before closing just below its 50-day moving average (171.06). Semiconductor stocks as a cohort were relatively weak, though much improved from early levels, with the PHLX Semiconductor Index ultimately finishing with a 1.1% loss.
The Vanguard Mega Cap Growth ETF (-1.0%) halved its earlier losses after being down as much as 2.0% today.
The S&P 500 Equal Weighted Index (-0.9%) still slightly underperformed the market-weighted S&P 500 (-0.1%), but only by a slight margin.
Smaller-cap stocks performed slightly better than their larger counterparts, as the S&P Mid Cap 400 (-0.5%) and Russell 2000 (-0.6%) finished with more modest losses.
As for today's winners, an outperformance in defensive sectors reflected today's risk-off sentiment.
The health care sector (+0.1%) benefitted from a strong showing in biotech names that boosted the iShares Biotechnology ETF 1.6%, while the consumer staples sector (+0.1%) captured a similar gain despite several names trading sharply lower in response to headlines.
Kraft Heinz (KHC 26.02, -1.95, -6.97%) traded lower after the company announced it will split into two independently traded names, and Constellation Brands (STZ 151.26, -10.68, -6.60%) slipped after the company lowered its FY26 EPS guidance, citing dampened consumer demand and more volatile consumer purchasing behavior.
Elsewhere, the energy sector (+0.2%) closed as the top-performing S&P 500 sector, benefitting from crude oil futures settling today's session $1.59 higher (+2.5%) at $65.60 per barrel.
The CBOE Volatility Index jumped 14.0% to 17.51, underscoring heightened investor anxiety as September’s historically weak start lives up to expectations. With little in the way of consequential economic data or earnings releases tomorrow, it appears the market will be left to its own devices to determine if today's retreat will compound or if the late-session resilience will culminate in another record-setting rally.
U.S. Treasuries began the Labor Day-shortened week with losses across the curve, though intraday action saw all tenors rise off their opening lows. The 2-year note yield settled up four basis points to 3.66%, and the 10-year note yield settled up five basis points to 4.28%.
- Nasdaq Composite: +10.2% YTD
- S&P 500: +9.1% YTD
- DJIA: +6.5% YTD
- Russell 2000: +5.5% YTD
- S&P Mid Cap 400: +3.8% YTD
Reviewing today's data:
- August ISM Manufacturing Index 48.7% (Briefing.com consensus 48.6%); Prior 48.0%
- The key takeaway from the report is that the new orders index bounced back into expansion territory following six straight months of contraction; however, the overall activity for the manufacturing sector remains in a disappointing mode of contraction.
- July Construction Spending -0.1% (Briefing.com consensus 0.2%); Prior -0.4%
- The key takeaway from the report is that the softness in July was led by private nonresidential spending, although private residential spending (+0.1%) wasn't exactly strong either.
- August S&P Global U.S. Manufacturing PMI -Final 53.0; Prior 53.3
Major averages improved from earlier levels
02-Sep-25 15:25 ET
Dow -335.67 at 45209.21, Nasdaq -217.19 at 21238.36, S&P -58.65 at 6401.61
[BRIEFING.COM] After running into some round number resistance at the 6,400 level, the S&P 500 (-0.9%) finally eclipsed the mark and is now just beneath its session highs, while the Nasdaq Composite (-1.0%) and DJIA (-0.7%) hold similar losses.
President Trump stated on the Scott Jennings Radio Show that the administration plans to appeal the ruling that declared most of the levies he imposed as illegal, calling the situation an emergency and saying that the country will be in very serious economic trouble without the tariffs.
Only a small batch of companies report earnings before the open tomorrow, and there are no consequential economic data releases on the docket, leaving the market in search of an additional development to turn attention away from tariff uncertainty and mitigate today's losses.
Mega-cap weakness weighs down consumer discretionary sector
02-Sep-25 15:00 ET
Dow -396.04 at 45148.84, Nasdaq -250.81 at 21204.74, S&P -64.39 at 6395.87
[BRIEFING.COM] As the market enters the final hour of trading, all eleven S&P 500 sectors trade beneath their flatlines.
The consumer discretionary sector (-1.0%) faces losses in its largest components, Amazon (AMZN 225.01, -3.99, -1.74%) and Tesla (TSLA 328.26, -5.61, -1.68%), though several stock-specific headlines prevent further losses.
Ulta Beauty (ULTA 529.47, +36.74, +7.46%) is the best-performing S&P 500 stock today, recovering most of its losses from last week's post-earnings selloff.
Starbucks (SBUX 89.27, +1.08, +1.22%) captures a nice gain after Bloomberg reported that CEO Brian Niccol stated the company's fall lineup introduction stoked a record-breaking sales week across U.S. stores.
Shares of McDonald's (MCD 316.04, +2.50, +0.80%) are also modestly higher after the company announced the reintroduction of its Extra Value Meals in an attempt to reach price-sensitive consumers, according to CNBC.
Record session for gold, stocks just off of session lows
02-Sep-25 14:30 ET
Dow -387.88 at 45157.00, Nasdaq -272.66 at 21182.89, S&P -68.80 at 6391.46
[BRIEFING.COM] The S&P 500 (-1.1%), Nasdaq Composite (-1.3%), and DJIA (-0.9%) are off their session lows following a modest increase in sector strength.
The energy sector (+0.1%) maintains a slight gain for the day, while the consumer staples and health care sectors return to their flatlines.
The next best performing S&P 500 sector is the materials sector with a 0.6% loss, and five sectors still hold losses wider than 1.0%, showing that there is a long way to go before substantial improvement at the index level.
Gold futures (GC00-USA) surged $76.00, or 2.2%, to settle at a record $3,592.20 per ozt, with investors rotating into the metal as a rate cut at the September FOMC becomes increasingly certain.
Some comeback action
02-Sep-25 13:55 ET
Dow -328.99 at 45215.89, Nasdaq -256.29 at 21199.26, S&P -63.33 at 6396.93
[BRIEFING.COM] The session low for the S&P 500 is 6,360.58, yet the S&P 500 currently sits at 6,396.93, so there is some comeback action in the mix.
The energy sector (+0.3%) has peeked its head above the unchanged mark, aided by a 2.6% gain in WTI crude futures ($65.67, +1.66, +2.6%). While there isn't much strength elsewhere, most stocks and sectors are off their earlier lows.
Looking within the Dow, 21 of its 30 components are lower. The biggest losers are NIKE (NKE 74.67, -2.70, -3.49%), NVIDIA (NVDA 169.31, -4.87, -2.80%), Goldman Sachs (GS 729.71, -15.54, -2.09%), and Amazon (AMZN 225.38, -3.62, -1.58%).
Boeing (BA 237.90, +3.22, +1.37%), meanwhile, is the winning standout following the news that Macquarie Air France announced an order for 30 737 MAX jets.
Constellation Brands under pressure after slashing FY26 EPS guidance, dragging down peers (STZ)
Constellation Brands (STZ -7%) is under pressure today after slashing its FY26 guidance this morning, sending shares to a new 5-year low. This beer, wine, and spirits company has been in rough shape, down 32% YTD, as it contends with a challenging and uncertain backdrop.
- The slashed guidance reflects the ongoing challenges the beer and spirits industry has been facing. Management pointed out dampened consumer demand and more volatile purchasing behavior since it presented its Q1 (May) results. More specifically, high-end beer rates decelerated sequentially, as both trip frequency and spend per trip declined. Also, high-end beer buy rate declines for Hispanic consumers were more pronounced than general market declines. The Hispanic consumer is roughly half of STZ's business, which has an outsized impact on its Beer Business compared to the broader beer category.
- The guidance cut was pretty significant. Comparable EPS is now expected to be $11.30-11.60, down from $12.60-12.90. Breaking it down, beer net sales growth is expected to decline -4% to -2%, versus prior guidance of +0-3%. That translates into enterprise organic net sales falling -6% to -4%, versus prior -2% to +1%. The cut reflects incremental macroeconomic headwinds weighing on consumer demand. Beer operating income is also expected to decline -9% to -7%, versus prior +0-2%, pressured by lower volumes, operating deleveraging, and tariffs. As a result, comparable enterprise operating income is now expected to decline -11% to -9%, versus prior -3% to -1%.
- We think investors are likely surprised by the significant slash to FY26 guidance, especially since the company reaffirmed its outlook on its Q1 (May) call in early July. Its Q1 results came in largely as expected, with management acknowledging ongoing consumer concern but noting no material change in behavior. At the time, management expressed confidence in achieving its guidance based on an expected sequential improvement in 2H26, particularly in its Beer Business, supported by cost-saving initiatives.
- The slashed guidance from STZ is putting pressure on others in the industry, with peers Anheuser-Busch (BUD -2.4%), AmBev (ABEV -2.4%), Boston Beer Co (SAM -1.9%), and Molson Coors Brewing (TAP -0.9%) all trading lower, reflecting investor concern of similar headwinds.
The slashed guidance reflects the ongoing challenges in the beer and spirits industry. While investors have likely anticipated a challenging environment, we think they were not expecting a substantial guidance cut, given that STZ reaffirmed its guidance in early July and expressed confidence in achieving it.
Kraft Heinz becomes latest to join separation trend; to split in two to hopefully revive growth
For the second time in two weeks, we have a major food/beverage company splitting into two independently traded stocks. Last week, it was Keurig Dr Pepper (KDP) splitting its refreshment beverage segment from its coffee segment. And today, Kraft Heinz (KHC) is joining the fray by splitting into two yet-to-be-named segments. The decision stemmed from a strategic review that was announced in May 2025. Investors have been wanting this to happen for a while.
- One segment will be temporarily called "Global Taste Elevation Co." which includes Taste Elevation and shelf-stable meals with $15.4 bln in 2024 sales and $4 bln in adjusted EBITDA. This company will include three billion-dollar brands (Heinz, Philadelphia and Kraft Mac & Cheese) with approximately 75% of sales coming from sauces, spreads and seasonings.
- Then there will be its "North American Grocery Co." which includes a portfolio of North America staples with $10.4 bln in sales and $2.3 bln in adjusted EBITDA. This company will also include three billion-dollar brands (Oscar Mayer, Kraft Singles and Lunchables). Approximately 75% of sales come from brands that are #1 or #2 in their respective categories. Current KHC CEO Carlos Abrams-Rivera will become CEO of this segment.
- The idea behind the separation is to revive growth, simplify operations, and better focus resources. KHC's top line growth has been weak in recent quarters with yr/yr sales declines in each of the past seven quarters. As a result, the stock has come under pressure for much of the past year, which likely prompted the strategic review.
This definitely seems to be a trend as food/beverage companies get squeezed on both ends: facing rising cost pressures from tariffs while also being impacted by a weaker consumer. In addition to the KDP announcement last week, Kellogg split into two in 2023: Kellanova (snacks) and WK Kellogg (cereal). The latter of which is being acquired by Italian food group, Ferrero.
And there may be more to come. The WSJ reported this morning that activist investor Elliott Investment Mgmt has built a huge $4 bln stake in PepsiCo (PEP). Investors have been clamoring for years that PEP needs to separate its lucrative snacks business from its struggling soda business. Thus far, PEP has rebuffed those efforts. However, given the new macro pressures and these recent separations, the Elliott Mgmt team might be able to pressure PEP into a split.
Briefing.com is generally a fan when companies separate as it allows each segment to focus more on its own needs. It also often results in better trading multiples when good segments are free from struggling segments weighing them down. On a final note, KHC is trading lower on the news. Perhaps investors would have preferred that the strategic review had resulted in an outright sale of the company.
Ulta Beauty lower despite beat-and-raise Q2 report; cautious tone for 2H26 weighing on shares (ULTA)
Ulta Beauty (ULTA -6%) is trading lower today after reporting its Q2 (Jul) results last night. This retailer of beauty products delivered its top and bottom line above expectations. The company is no stranger EPS beats and extended its streak to four consecutive quarters of double-digit upside. Revenue was also strong, growing 9.3% yr/yr to $2.79 bln, coming in above expectations and marking its highest growth rate in 5 quarters. While management raised its FY26 guidance for EPS, revenue, and comps, we think its cautious tone is driving the negative reaction. It highlighted ongoing uncertainty around consumer spend, and notably, its comp guidance of +2.5-3.5% implies flat-to-low single-digit growth in the second half.
- Revenue was boosted by ULTA's impressive comp of +6.7%, accelerating from +2.9% in Q1 (April). It was nice to see its comp driven mostly by traffic compared to average ticket, which were +3.7% and +2.9% respectively. In terms of the cadence of comps, growth was strongest in May and July, primarily reflecting shifts in the timing of key promotional events, with both store and digital channels contributing.
- Strength was broad based across all of its categories. Fragrance continues to stand out, delivering robust double-digit growth, driven by Mother's day and Father's Day events, as well as new product launches. Its skincare and wellness category also continued its momentum, growing in the high-single digit range, led by growth in body care and wellness, with improving trends across its mass and prestige segments. Encouragingly, makeup and haircare categories accelerated in the quarter, both delivering mid-single digit comp growth.
- Another item worth highlighting was the late acquisition of Space NK, a specialty beauty retailer based in the UK. Only one week was included in this report, but it gives ULTA an entry point into international markets. Management noted this was a less capital-intensive way to tap one of the largest beauty markets while gaining learnings in high street retail.
- Moving on to what we think is causing the negative reaction. While management emphasized that beauty engagement remains healthy and continues to provide a sense of comfort to consumers in a dynamic macro environment, its outlook for comps shows a moderation in the back half. Management described the guidance as prudently cautious, so there could be some conservatism embedded in the guide.
Overall, we thought ULTA's Q2 was impressive across the board, but the cautious tone around 2H26, particularly in comps, is driving today's weakness. With the stock having rebounded strongly off April lows and setting a new 52-wk high yesterday, it's also possible investors are taking their profits and stepping aside to see how the second half plays out.
Marvell's record Q2 revenue marred by flat Q3 outlook, XPU revenue timing concerns (MRVL)
Marvell's (MRVL) Q2 earnings report has elicited a steep selloff in the stock, as the semiconductor company delivered disappointing in-line EPS of $0.67 -- falling short of its historical pattern of modest beats -- while revenue of $2.006 bln slightly missed consensus expectations. Compounding the frustration, management issued underwhelming in-line guidance for Q3, which failed to inspire confidence and has directly contributed to the stock's plunge, reflecting broader concerns about near-term growth deceleration
While MRVL notched a record Q2 revenue milestone, propelled by robust AI demand for its custom silicon accelerators and electro-optics interconnects, as well as an accelerating recovery in enterprise networking and carrier infrastructure end markets, the pace of expansion in its pivotal Data Center segment showed signs of moderation.
- Specifically, Data Center revenue surged 69% yr/yr to $1.491 bln, accounting for 74% of total sales and highlighting MRVL's entrenched position in hyperscale AI infrastructure, yet this marked a sequential deceleration from Q1's 76% growth rate, attributable to transitional dynamics in program ramps and inventory adjustments at key customers. This underlying slowdown, despite overall topline strength, signals potential lumpiness in AI-related deployments, where explosive year-over-year gains mask quarter-to-quarter volatility as customers navigate capacity buildouts and technology transitions.
- Looking ahead, MRVL anticipates a qtr/qtr decline in custom silicon revenue for Q3, which is expected to offset robust growth in electro-optics products, resulting in broadly flat sequential Data Center revenue -- a stark contrast to the segment's prior momentum and a key factor in the muted guidance. Management attributes this dip to temporary fluctuations tied to delivery timing and supply chain optimizations, particularly around advanced node transitions, rather than any erosion in underlying demand.
- Reassuringly, the company forecasted a meaningful rebound in Q4, with custom silicon poised to deliver substantially stronger performance, underscoring that this represents a short-term hiccup in an otherwise accelerating AI trajectory.
- The disappointing Q3 guidance, coupled with a lack of granular clarity during the Q2 earnings call, has amplified uncertainty around MRVL's high-profile XPUs with Amazon (AMZN) and Microsoft (MSFT), two cornerstone contracts that were anticipated to catalyze significant revenue inflection. These deals -- encompassing custom AI accelerators like AMZN's Trainium series and MSFT's Maia platforms -- were secured as multi-year design wins emphasizing MRVL's expertise in tailored, power-efficient silicon for cloud-scale AI training and inference, with initial ramps expected to contribute meaningfully to FY26 Data Center growth.
- However, the timing of substantial revenue recognition appears delayed beyond initial projections, potentially shifting from FY26 into FY27 due to protracted validation phases, supply constraints on advanced packaging, and customer-side deployment delays amid broader AI ecosystem maturation; this opacity not only tempers near-term expectations but also raises questions about execution risks in a fiercely competitive landscape.
- Amid the Data Center headwinds, MRVL's Enterprise Networking and Carrier Infrastructure markets stood out as beacons of strength in Q2, with revenue expanding 28% yr/yr in Enterprise Networking to approximately $450 mln and surging 71% in Carrier Infrastructure to around $350 mln, collectively signaling a robust inflection in these recovering segments.
- For Enterprise Networking, the growth is driven by renewed capital spending on 800G/1.6T Ethernet switches and data center interconnects, as enterprises upgrade legacy infrastructure to support hybrid cloud and AI workloads, bolstered by MRVL's Prestera and Teralynx platforms that offer superior bandwidth efficiency and lower latency. In Carrier Infrastructure, the acceleration stems from 5G densification and edge computing initiatives, where operators are deploying MRVL's OCTEON processors for baseband and fronthaul applications, aided by favorable industry cycles including spectrum auctions and fiber optic expansions.
MRVL's Q2 results, while achieving a revenue record, were overshadowed by the in-line EPS delivery and slight revenue shortfall, but the true catalyst for today's steep stock decline lies in the disappointing Q3 guidance and evident slowdown in Data Center growth momentum. Investors, accustomed to AI-fueled beats, are wary of the near-term flatness in this core segment, exacerbated by uncertainties in custom silicon ramps and XPU contract timelines with major hyperscalers.
Autodesk designs strong Q2 beat-and-raise report, fueled by data center construction activity (ADSK)
Autodesk (ADSK) is surging in the wake of its Q2 earnings report, as the leading provider of design and engineering software comfortably exceeded consensus expectations for both EPS and revenue, with the latter expanding by over 17% yr/yr to $1.76 bln -- the company's strongest yr/yr growth in more than three years. Management further bolstered investor confidence by issuing upside guidance for Q3, projecting revenue of $1.80-$1.81 bln and EPS of $2.48-$2.51, while raising its FY26 outlook across all key metrics.
These revisions reflect accelerating end-market demand, with particular strength in data center construction, infrastructure, and manufacturing, where customers are increasingly adopting ADSK's cloud-enabled platforms to drive efficiency and innovation in complex projects.
- A critical forward-looking indicator for ADSK's subscription-heavy model, billings surged to $1.678 bln in Q2, marking a 36% yr/yr increase and an acceleration from Q1's 29% growth, signaling robust pipeline health and customer commitment. This outperformance stems from several tailwinds, including the ongoing shift to annual billing for multi-year contracts, which contributed approximately $129 mln to the quarter's billings, and favorable foreign exchange dynamics.
- More fundamentally, the acceleration highlights accelerating adoption of ADSK's cloud-based offerings, such as Fusion for collaborative product design and Construction Cloud for streamlined project management, which are gaining traction among enterprises seeking scalable, data-integrated workflows. Additionally, rising integration of AI enhancements -- ranging from generative design tools in Fusion to automated constraint-solving features -- has boosted productivity and user retention, with management noting high acceptance rates for these capabilities.
- The Architecture, Engineering, Construction, and Operations (AECO) segment emerged as a clear standout in Q2, with revenue leaping 24% in constant currency to $878 mln, outpacing the company's overall growth and underscoring its role as a high-margin growth engine. This performance is largely attributable to sustained capital investments in data centers, driven by AI and cloud infrastructure buildouts, as well as infrastructure projects tied to government spending and industrial expansion, which have more than offset persistent softness in commercial real estate.
- ADSK's AutoCAD and AutoCAD LT suite, along with its Manufacturing (MFG) business, both posted healthy revenue growth of 14% yr/yr in Q2, reflecting steady demand for core design tools amid broader industrial resilience.
- For AutoCAD and AutoCAD LT, which generated $440 mln in revenue, the expansion is fueled by persistent adoption among small-to-medium enterprises and freelancers for 2D/3D drafting needs, bolstered by seamless integration with cloud extensions and AI-assisted automation features that streamline workflows and reduce errors. In the MFG segment, revenue reached $334 mln, driven by manufacturers' focus on digital twins and supply chain optimization in the face of geopolitical volatility; tools like Inventor and Fusion are enabling faster prototyping and simulation, particularly in automotive and aerospace subsectors where efficiency gains are paramount.
ADSK's Q2 results exemplify a company firing on all cylinders, with accelerating billings growth serving as a compelling proxy for future revenue durability in its subscription ecosystem. This momentum is partly propelled by robust data center construction activity, where surging AI infrastructure investments are amplifying demand for ADSK's specialized tools, alongside broader tailwinds in infrastructure and manufacturing. |
