Market Snapshot
| Dow | 45271.23 | -24.58 | (-0.05%) | | Nasdaq | 21497.73 | +218.10 | (1.02%) | | SP 500 | 6448.26 | +32.72 | (0.51%) | | 10-yr Note |
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| | NYSE | Adv 1456 | Dec 1274 | Vol 1.03 bln | | Nasdaq | Adv 2180 | Dec 2342 | Vol 7.51 bln |
Industry Watch
| Strong: Communication Services, Information Technology, Consumer Discretionary |
| | Weak: Energy, Utilities, Materials, Industrials, Financials, Health Care, Real Estate |
Moving the Market
Favorable ruling in the Alphabet (GOOG) antitrust case that will allow the company to retain its Chrome browser
Relative strength among other mega-cap names after yesterday's retreat
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Alphabet's rally enough for mixed finish despite broader market weakness
03-Sep-25 16:25 ET
Dow -24.58 at 45271.23, Nasdaq +218.10 at 21497.73, S&P +32.72 at 6448.26
[BRIEFING.COM] The stock market opened to substantial gains across its mega-cap components after a federal judge ruled that Alphabet (GOOG 231.10, +19.11, +9.01%) can retain its Chrome browser, though the broader market lagged behind, limiting index-level growth and keeping the major averages mixed.
The tech-heavy Nasdaq Composite (+1.0%) led the way, while the S&P 500 (+0.5%) secured a modest gain after slipping to its flatline, and the DJIA (-0.1%) spent the entirety of the session in negative territory.
Only three S&P 500 sectors finished (or spent any material amount of time) in positive territory, though the gains were concentrated enough in the market's largest names to carry the major averages.
Alphabet's rally pushed the communication services sector (+3.8%) to a record high level, while Apple (AAPL 238.47, +8.75, +3.81%) and the information technology sector (+0.5%) also benefited, as the ruling will allow Google to remain the default search engine on Apple's iPhone.
The consumer discretionary sector (+0.5%) benefitted from strong mega-cap leadership of its own, as Tesla (TSLA 334.09, +4.73, +1.44%) captured a nice gain.
The Vanguard Mega Cap Growth ETF finished the day with a 0.9% gain, and the market-weighted S&P 500 (+0.4%) decidedly outperformed the S&P 500 Equal Weighted Index (-0.4%), demonstrating the influence that the mega-cap cohort has over the broader market.
Outside of the mega-cap space, the consumer discretionary sector also benefited from relatively strong performances among retailer names. Though not a component of the sector, Macy's (M 16.28, +2.79, +20.68%) traded sharply higher after an impressive earnings beat today, though Dollar Tree (DLTR 102.03, -9.32, -8.37%) traded lower despite EPS and revenue beats of its own, with investors startled by flat Q3 guidance amid continued tariff volatility.
The SPDR S&P Retail ETF closed with a 0.5% gain for the day.
Seven other S&P 500 sectors closed lower, while some late-session buying activity saw the consumer staples sector finish flat. Though the majority of names sat out today's mega-cap-fueled rally, losses were relatively modest.
Only the energy sector (-2.3%) finished with a loss wider than 0.6%, with the sector facing pressure as crude oil settled today's session $1.60 lower, or -2.1%, to $64.00 per barrel. Reuters reported that OPEC+ may discuss an output increase at Sunday's meeting, which will include representatives from eight member nations.
Looking beyond the S&P 500, smaller cap names retreated, with the Russell 2000 finishing 0.2% lower and the S&P Mid Cap 400 finishing 0.4% lower.
Though Alphabet's antitrust ruling was the main catalyst behind today's actions, corporate headlines were relatively slim today. Monetary policy, however, received plenty of coverage as the market was inundated with headlines surrounding the FOMC.
Fed Governor Christopher Waller (FOMC voting member) told CNBC he supports a September rate cut, pointing to labor softness. Mr. Waller acknowledged the potential for a near-term inflation uptick but said he expects it to fall back to the 2.0% target within six to seven months.
A weaker-than-expected July JOLTS report added to evidence of a cooling labor market, strengthening expectations for policy easing.
St. Louis Fed President Alberto Musalem (FOMC voting member) also noted weakening labor conditions, though he cautioned that tariff-driven inflation could be more persistent than current forecasts suggest.
Atlanta Fed President Raphael Bostic (FOMC non-voting member) stated he could support a September cut if the job market deteriorates more than anticipated.
Beyond the policy debate, Fed independence was in the spotlight. Fed Governor Waller emphasized the central bank's independence when asked generally about governance, though he avoided direct comment on the mortgage fraud allegations facing Fed Governor Lisa Cook (FOMC voting member).
CNBC also reported that Senator Thom Tillis (R-NC) will not consider any replacement nominee for Cook until her case is resolved in court.
Rate expectations firmed further, with the CME FedWatch Tool now assigning a 95.6% probability to a 25-basis-point cut in September, up from 92.7% yesterday.
Ultimately, Tuesday's action underscored how heavily the market leans on its largest names for support. While Fed commentary and soft labor data strengthened conviction in a September rate cut, the broader market remains cautious, leaving mega-cap momentum as the primary driver of index-level gains.
U.S. Treasuries ended Wednesday with solid gains across the curve that wiped out the market's losses from the start of the week. The 2-year note yield settled down five basis points to 3.61%, and the 10-year note yield settled down seven basis points to 4.21%.
- Nasdaq Composite: +11.3% YTD
- S&P 500: +9.6% YTD
- DJIA: +6.4% YTD
- Russell 2000: +5.4% YTD
- S&P Mid Cap 400: +3.6% YTD
Reviewing today's data:
- Weekly MBA Mortgage Applications Index -1.2%; Prior -0.5%
- July Factory Orders -1.3% (Briefing.com consensus -1.4%); Prior -4.8%
- The key takeaway from the report is that the weakness in factory orders in July was concentrated in the transportation space, so the weakness was not as acute as the headline might suggest. New orders for primary metals (+1.6%), machinery (+1.9%), computers and electronic products (+1.2%), and electrical equipment, appliances, and components (+1.9%) were all up in a good sign for factory order activity.
- July JOLTS - Job Openings 7.181 mln; Prior was revised to 7.357 mln from 7.437 mln
- The Fed's Beige Book had some stagflation undertones, as eleven Districts described little or no net change in overall employment levels, while one District described a modest decline. Half of the Districts described modest growth in wages, while most of the others reported moderate growth. Two Districts noted little or no change in wages.
Most Districts reported that their firms were expecting price increases to continue in the months ahead, with three of those Districts noting that the pace of price increases was expected to rise further.
Major averages near session lows just before the close
03-Sep-25 15:25 ET
Dow -236.22 at 45059.59, Nasdaq +121.34 at 21400.97, S&P +6.83 at 6422.37
[BRIEFING.COM] The S&P 500 (+0.1%) defends its baseline while the tech-heavy Nasdaq Composite (+0.5%) holds on to about half of its previous gain, and the DJIA (-0.5%) continues to lag as the market enters the final half hour of trading.
A multitude of Fed headlines have crossed the wires today, with CNBC recently reporting that Senator Tillis (R-NC) won't consider anyone the president nominates to replace Fed Governor Cook until her case is adjudicated by the court.
The market will receive a mixed bag of earnings reports after the close today, including releases from American Eagle (AEO 13.76, +0.25, +1.85%), Salesforce (CRM 255.86, +3.00, +1.19%), and the first earnings report from Figma (FIG 66.33, +0.76, +1.16%) after its IPO debut in late July.
Mega-cap names see early gains eroded
03-Sep-25 14:50 ET
Dow -216.05 at 45079.76, Nasdaq +111.18 at 21390.81, S&P +5.59 at 6421.13
[BRIEFING.COM] The S&P 500 (+0.1%) now trades just above its flatline, while the Nasdaq Composite (+0.5%) and DJIA (-0.6%) also plot new session lows as early gains across mega-cap names are steadily eroded.
Alphabet (GOOG 228.96, +16.96, +8.00%), and by virtue, the communication services sector (+3.1%), still hold the bulk of their early advance, but the information technology (+0.2%) and consumer discretionary (+0.2%) sectors have seen their gains substantially narrowed.
Within the technology sector, chipmakers are a relative weakness, as the PHLX Semiconductor Index is down 0.9% today. NVIDIA (NVDA 169.41, -1.37, -0.80%) trades lower for consecutive days this week, moving further below its 50-day moving average (171.56).
As for the consumer discretionary sector, Tesla (TSLA 336.04, +6.68, +2.03%) has seen nearly half of its early gain taken off the table, while Amazon (AMZN 224.58, -0.76, -0.34%) moves below its baseline.
Fed Beige Book finds little change in U.S. economic activity; tariffs, uncertainty weigh on outlook
03-Sep-25 14:30 ET
Dow -231.75 at 45064.06, Nasdaq +115.81 at 21395.44, S&P +5.40 at 6420.94
[BRIEFING.COM] The broader market held its bottom-of-the-range lines following the release of the Fed's Beige Book, published at the bottom of the hour; the report found that most of the twelve Federal Reserve Districts reported little or no change in economic activity since the prior Beige Book period—the four Districts that differed reported modest growth. Contacts frequently cited economic uncertainty and tariffs as negative factors. Currently, the S&P 500 (+0.08%) is firmly in second place, up about 5 points.
- Among other notable points from the report, eleven Districts described little or no net change in overall employment levels, while one District described a modest decline. Half of the Districts described modest growth in wages, while most of the others reported moderate growth. Two Districts noted little or no change in wages.
- Ten Districts characterized price growth as moderate or modest. The other two Districts described strong input price growth that outpaced moderate or modest selling price growth. Nearly all Districts noted tariff-related price increases, with contacts from many Districts reporting that tariffs were especially impactful on the prices of inputs.
- Most Districts reported that their firms were expecting price increases to continue in the months ahead, with three of those Districts noting that the pace of price increases was expected to rise further.
- Overall, sentiment was mixed among the Districts. Most firms either reported little to no change in optimism or expressed differing expectations about the direction of change from their contacts.
Currently, the yield on the benchmark 10-yr treasury note is down about five basis points to 4.210%.
Gold rallies to $3,635 as softer jobs data, policy concerns fuel safe-haven demand
03-Sep-25 13:55 ET
Dow -290.16 at 45005.65, Nasdaq +139.51 at 21419.14, S&P +5.00 at 6420.54
[BRIEFING.COM] With about two hours to go on Wednesday the tech-heavy Nasdaq Composite (+0.66%) holds a decent lead on the majors, this ahead of the Fed's latest Beige Book which is due out at the top of the hour.
Gold futures settled $43.30 higher (+1.2%) at $3,635.50/oz, driven by a mix of factors. Softer U.S. labor data strengthened expectations of a 25-basis-point Fed rate cut later this month, with probabilities nearing 98%. Simultaneously, escalating concerns, from central bank independence being jeopardized to widening global fiscal deficits and soaring long-term bond yields, have reignited safe-haven demand. This is compounded by sustained buying from foreign central banks and ETF inflows into SPDR Gold Trust, pushing holdings to multi-year highs. The confluence of anticipated monetary easing, policy unrest, and flight-to-safety buying underlies gold's latest rally.
Meanwhile, the U.S. Dollar Index is now -0.2% lower to $98.13.
Zscaler lower despite upside Q4 results; EPS guidance not as robust (ZS)
Zscaler (ZS) is trading lower after reporting its Q4 (Jul) results last nights. This cloud-based cybersecurity company delivered a solid EPS beat while revenue increased 21.3% yr/yr to 719.23 mln. The company also issued Q1 and FY26 EPS guidance in-line with consensus estimates while revenue was above.
- The company is seeing growing demand for its cyber and AI security, particularly in its new AI Guard and Gen AI security offerings as the rapid adoption of AI creates new security challenges. As a result, annual recurring revenue (ARR) increased 22% yr/yr and surpassed $3 bln. Its remaining performance obligation (RPO) grew approximately 31% year-over-year to $5.8 bln, with approximately 46% classified as current RPO.
- The company has three growth vectors, AI security, Zero Trust Everywhere and Data Security Everywhere, which together surpassed $1 bln in ARR in Q4. Company expects growth in these areas to continue, and to accelerate adoption it recently introduced Z-Flex, which generated $100 mln in TCV bookings, representing over 50% sequential growth.
- Gross margin was 79.3% on a one-time lower-margin government deployment and is expected to return to ~80% in Q1. Operating margin rose to 22.1%, up 60 bps yr/yr and a quarterly record.
- Company now uses ARR as primary growth metric. FY26 ARR guidance: $3.676-3.698B (~22% growth). Revenue guidance for Q1 and FY26: $772-774 mln and $3.265-3.284 bln (~22--23%). Revenue growth has not fallen below 21% in the last five years.
Briefing.com Analyst Insight
Despite the strong Q4 report, shares are trading lower. The stock has really been on an impressive run, so its possible investors may be taking profits. Also, investors may have wanted to see more with its EPS guidance for Q1 and FY26. EPS guidance was in line with expectations, and given the company's history of earnings beats and typically guiding above consensus, this likely tempered enthusiasm. Still, the company hasn't missed expectations in 5 years, and the risks/opportunities created by rapid AI adoption bode well for the company.
Campbell Soup higher after Q4 EPS beat, but tariffs cloud FY26 outlook (CPB)
Campbell Soup (CPB) is trading higher after reporting its Q4 (Jul) results this morning. EPS topped consensus estimates, extending its streak, while revenue was roughly in line. Revenue grew 1.2% yr/yr to $2.32 bln, a slower pace than recent quarters. For FY26, the company guided EPS to $2.40-2.55 and revenue growth of down 2% to flat. Organic sales are expected to range from -1% to +1%, reflecting continued momentum in Meals & Beverages and an expected stabilization in Snacks in 2H26.
- Its Meals & Beverages segment reported net sales of flat yr/yr at $1.20 bln, while organic sales fell 3% on a 4% volume/mix decline. Still, consumption rose 1% in the quarter as at-home cooking trends stayed strong, helping offset the timing reversal of shipments from Q3.
- Its Snacks segment continues to lag, though it showed sequential improvement. Net sales grew 2% yr/yr to $1.12 bln, but organic sales fell 2% as a 5% volume/mix decline outweighed a 2% price lift. Weaknesses in Snyder's pretzels and partner brands remained a drag, though Goldfish and Cape Cod were bright spots, driving share gains and healthier consumption.
- Tariffs proved to be a headwind toward its profitability. Adjusted EPS of $0.62 included a $0.06 lift from an extra week, but tariffs and divestitures both carried a $0.02 negative impact. EBIT margin slipped 50 bps, with tariffs driving 30 bps of the hit. Gross margin fell 90 bps to 30.5% on cost inflation and supply chain costs.
- In terms of the guidance and anticipated costs, tariffs are expected to represent ~4% of COGS, with section 232 steel/aluminum driving ~60% of the hit. FY26 adjusted EBIT is forecast to fall 13-9%, while adjusted EPS is expected to be down 18-12%. About two-thirds of the decline in EPS is tariff-related, with the rest tied to base business performance.
Briefing.com Analyst Insight
Campbell Soup continues to benefit from steady at-home demand in Meals & Beverages, but mounting tariff costs cloud the FY26 outlook. With margins under pressure and EPS set for a double-digit drop, near-term challenges remain. Still, sequential improvement in Snacks and expected stabilization in 2H26 are encouraging. And with the stock trading near lows, we think the earnings beat, momentum in Meals & Beverages, and signs of progress in Snacks were enough to get shares moving.
Dollar Tree pulls back despite upbeat Q2 report; concerns remain about 2H (DLTR)
Dollar Tree posted solid Q2 (Jul) results, delivering a beat on both EPS and revenue, and raised FY26 guidance across the board. It also lifted full-year comp sales guidance to +4-6% (from +3-5%). However, a flat Q3 EPS outlook and continued tariff volatility tempered investor enthusiasm.
- A major milestone was achieved with the July 5 sale of Family Dollar, allowing DLTR to focus entirely on its core Dollar Tree brand. Management says this focus is already improving execution, pricing, and product mix.
- Q2 same-store sales rose +6.5%, beating guidance for the second straight quarter—despite no major holidays or events. Growth was well-balanced between traffic and ticket and across consumables and discretionary.
- Standouts included seasonal items, party balloons, and personal care. Notably, higher-income shoppers ($100K+ households) now make up nearly two-thirds of new customers.
- CEO Michael Creedon Jr., less than a year into the role, is prioritizing clean stores, stocked shelves, and an expanded assortment—all of which are driving traffic and trade-up behavior.
- On the cost side, tariff volatility remains a key headwind. China tariffs are at 30% (still not finalized), and rates from Vietnam, India, and Bangladesh have jumped since June. DLTR is responding by shifting sourcing, cutting unprofitable SKUs, and selectively raising prices.
Briefing.com Analysis:
DLTR's Q2 performance was strong, especially on comps and customer mix. However, the flat Q3 EPS guidance, ongoing tariff uncertainty, and cautious tone around consumer behavior have investors a bit cautious heading into 2H.
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.
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