Market Snapshot
| Dow | 45834.01 | -273.78 | (-0.59%) | | Nasdaq | 22141.10 | +98.03 | (0.44%) | | SP 500 | 6584.29 | -3.18 | (-0.05%) | | 10-yr Note |
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| | NYSE | Adv 934 | Dec 1796 | Vol 1.00 bln | | Nasdaq | Adv 1630 | Dec 2912 | Vol 9.12 bln |
Industry Watch
| Strong: Information Technology, Utilities, Consumer Discretionary, Communication Services |
| | Weak: Materials, Health Care, Industrials, Financials, Real Estate, Consumer Staples |
Moving the Market
Lack of conviction in the market as investors await new catalysts
Mega-cap strength preventing losses in the S&P 500 and Nasdaq Composite
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Mega-cap resilience offsets broader weakness ahead of Fed meeting
12-Sep-25 16:35 ET
Dow -273.78 at 45834.01, Nasdaq +98.03 at 22141.10, S&P -3.18 at 6584.29
[BRIEFING.COM] The stock market traded in a mixed fashion on the heels of yesterday's rate cut optimism-fueled rally, though strong performances across the mega-caps pushed the Nasdaq Composite (+0.4%) and S&P 500 (-0.1%) to fresh record highs.
The tech-heavy Nasdaq Composite benefitted the most from today's advance, establishing a new all-time high of 22,182.34 and a record closing high of 22,141.10.
The S&P 500 set a record high of 6,600.21 shortly before the close, but the index ran into some round number resistance at that mark and promptly retreated beneath its flatline.
Meanwhile, the DJIA (-0.5%) traded lower for the duration of the session, reflecting pockets of weakness in the broader market.
Only the utilities (+0.6%), consumer discretionary (+0.6%), information technology (+0.5%), and communication services (+0.2%) sectors closed with a gain, though these sectors (with the exception of the thinly traded utilities sector) have the highest concentration of mega-cap names.
Most notably, Tesla's (TSLA 395.94, +27.13, +7.36%) strong move saw it finish with a 12.9% gain for the week, helping to mask Amazon's (AMZN 228.15, -1.80, -0.78%) loss in the consumer discretionary sector.
Microsoft (MSFT 509.90, +8.89, +1.77%) and Apple (AAPL 234.07, +4.04, +1.76%) supported the information technology sector, which saw just modest strength in its chipmaker names, pushing the PHLX Semiconductor Index to a 0.2% gain.
Though not mega-caps themselves, Paramount Skydance's (PSKY 18.79, +1.33, +7.62%) potential majority-cash acquisition of Warner Bros. Discovery (WBD 18.91, +2.74, +16.94%) pushed both stocks higher for the second consecutive day in the communication services sector, despite a report from Bloomberg today that the transaction will likely face regulatory headwinds.
The sector's largest names, Alphabet (GOOG 241.28, +0.50, +0.21%) and Meta Platforms (META 755.59, +4.69, +0.62%), moved slightly higher late in the afternoon, helping the sector finish near session highs.
Ultimately, the market's heaviest components played a crucial role in limiting losses at the index level. The Vanguard Mega Cap Growth ETF closed with a 0.6% gain, and the market-weighted S&P 500 (-0.1%) outperformed the S&P 500 Equal Weighted Index (-0.8%).
While losses were relatively broad-based, they were also modest. Only the health care sector (-1.1%) closed with a loss wider than 1.0%. COVID vaccine stocks such as Moderna (MRNA 23.51, -1.88, -7.40%) and Pfizer (PFE 23.89, -0.97, -3.90%) dipped following a Washington Post report that suggested health officials from the Trump administration plan to link COVID vaccines to the deaths of 25 children.
The sector also faced pressure in its biotech names, with the iShares Biotechnology ETF slumping 2.0% today.
Outside of the S&P 500, smaller cap indices such as the Russell 2000 (-1.0%) and S&P Mid Cap 400 (-1.1%) underperformed after surging yesterday on bolstered rate cut expectations.
Looking ahead, attention now turns squarely to next week's FOMC meeting. A 25-basis point rate cut is fully priced in, but the updated dot plot and Fed Chair Powell's press conference will put the market's expectations of three total rate cuts by year-end to the test.
U.S. Treasuries retreated on Friday with longer tenors leading the slide, though even with today's underperformance, 10s and 30s added to their gains from the first week of September while 5s and shorter tenors finished the week in negative territory. The 2-year note yield settled up three basis points to 3.56% (+5 basis points this week) and the 10-year note yield settled up five basis points to 4.06% (-3 basis points this week).
- Nasdaq Composite: +14.7% YTD
- S&P 500: +12.0% YTD
- DJIA: +7.7% YTD
- Russell 2000: +7.5% YTD
- S&P Mid Cap 400: +5.2% YTD
Reviewing today's data:
- The preliminary University of Michigan Consumer Sentiment reading for September checked in at 55.4 (Briefing.com consensus: 59.2) versus the final reading of 58.2 for August. In the same period a year ago, the index stood at 70.1.
- The key takeaway from the report is that the pullback in consumer sentiment was paced by fading economic views among lower-income and middle-income consumers.
Major averages on track for modest week-to-date gains
12-Sep-25 15:25 ET
Dow -195.41 at 45912.38, Nasdaq +116.74 at 22159.81, S&P +6.61 at 6594.08
[BRIEFING.COM] As the market enters the final half hour of the session, the S&P 500 (+0.1%), Nasdaq Composite (+0.6%), and DJIA (-0.4%) sit mixed, as they have for the majority of today's action.
As it stands, the major averages still hold gains over 1.0% week-to-date.
Bloomberg reports that one of Apple's (AAPL 234.08, +4.05, +1.76%) most senior AI and search executives, Robby Walker, is leaving the company.
Communication services sector makes late advance
12-Sep-25 15:05 ET
Dow -184.01 at 45923.78, Nasdaq +135.99 at 22179.06, S&P +10.68 at 6598.15
[BRIEFING.COM] The S&P 500 (+0.2%) and Nasdaq Composite (+0.5%) trade just beneath their session highs, while the DJIA (-0.3%) has slightly narrowed its loss.
The communication services sector (+0.3%) now holds a modest gain, with Paramount Skydance (PSKY 18.67, +1.21, +6.93%) and Warner Bros. Discovery (WBD 19.30, +3.13, +19.36%) widening their gains while Alphabet (GOOG 241.98, +1.20, +0.50%) and Meta Platforms (META 755.18, +4.28, +0.57%) see some late-session growth.
In the information technology sector (+0.7%), Bloomberg reports that the executives of OpenAI and NVIDIA (NVDA 177.90, +0.73, +0.41%) and CoreWeave (CRWV 110.68, -2.01, -1.78%) will reveal major UK data center investment plans.
S&P 500 edges higher as Kroger and Kenvue rise; Moderna slumps on vaccine report
12-Sep-25 14:30 ET
Dow -186.82 at 45920.97, Nasdaq +109.27 at 22152.34, S&P +6.76 at 6594.23
[BRIEFING.COM] The S&P 500 (+0.10%) is in second place on Friday afternoon, up about 7 points.
Briefly, S&P 500 constituents NRG Energy (NRG 163.62, +5.70, +3.61%), Kroger (KR 68.59, +1.36, +2.02%), and Kenvue (KVUE 19.24, +0.39, +2.10%) pepper the top of the standings. KR caught a bullish Guggenheim note this morning, and KVUE was the subject of a Reuters report suggesting the company had lobbied RFK Jr. to not draw conclusions between Tylenol and autism.
Meanwhile, Moderna (MRNA 23.35, -2.04, -8.03%) is today's top laggard as COVID vaccine stocks dip following a Washington Post report which suggested health officials from the Trump administration plan to link COVID vaccines to deaths of 25 children.
Gold extends weekly gain as softer data, Fed cut bets lift metal
12-Sep-25 14:00 ET
Dow -194.97 at 45912.82, Nasdaq +113.93 at 22157.00, S&P +6.89 at 6594.36
[BRIEFING.COM] With about two hours to go on Friday the tech-heavy Nasdaq Composite (+0.52%) is in first place, up more than 113 points.
Gold futures settled $12.80 higher (+0.3%) at $3,686.40/oz, extending weekly gains to +0.9% as softer U.S. labor data, a surprise drop in producer prices, and rising bets on Fed rate cuts pressured the dollar and Treasury yields, boosting demand for the metal.
Meanwhile, the U.S. Dollar Index is up about +0.1% to $97.60.
RH stock drops after tariff costs drive revenue guidance cut and margin pressure (RH)
RH (RH) is trading lower today after reporting its Q2 (Jul) results last night. The luxury home furnishings retailer posted a sharp EPS miss while revenue rose 8.4% yr/yr to $899.2 mln, slightly below consensus. The bigger reaction stems from revised guidance, with full year revenue growth now expected at 9-11%, down from 10-13%.
- Revenue +8.4% yr/yr with demand +13.7%, showing resilience despite tariffs and a weak housing market. Margins improved: adj. op margin +340 bps to 15.1%, adj. EBITDA +340 bps to 20.6%. Net income +79% with $81 mln FCF.
- Strong international performance with RH England demand up 76% and online demand up 34%. RH Paris off to a strong start with day-by-day traffic exceeding RH New York.
- Tariffs are a growing headwind with $30 mln incremental cost added to its outlook. Tariffs also resulted in a delay of its Fall Interiors sourcebook and shifts $40 mln revenue into 2H. Also, new 50% India tariffs impact 7% of business and a U.S. furniture investigation adds more uncertainty.
- As a result, full-year operating margin is now expected at 13-14% versus 14-15% previously, adjusted EBITDA at 19-20% versus 20-21%, and free cash flow at $250-300 mln, down $50 mln. The outlook also factors in about a 200 bps drag from international expansion and a 90 bps drag from tariffs.
Briefing.com Analyst Insight
RH continues to show underlying demand strength, and its affluent customer base has proven resilient, even as housing turnover sits at multi-decade lows. However, the incremental tariff burden and added uncertainty from a potential new investigation are difficult to ignore in the near term. While RH's scale and positioning could ultimately allow it to capitalize on tariffs relative to smaller peers and benefit from a housing recovery down the line, the current reality is one of pressured margins and reduced free cash flow. Longer term, its international expansion strategy adds growth optionality, but near-term profitability headwinds are weighing on sentiment.
Warner Bros/Paramount Skydance merger would shake up Hollywood, but deal faces hurdles (WBD)
Paramount Skydance (PSKY) is reportedly preparing a majority cash bid to acquire Warner Bros. Discovery (WBD), sending shares of WBD soaring more than 40% since the Wall Street Journal broke the news yesterday, while PSKY has also surged over 20%. The bid, reportedly backed by the Ellison family, has ignited strong investor enthusiasm as the market anticipates potential synergies, cost savings, and the creation of a media powerhouse better equipped to compete with giants like Disney (DIS), Netflix (NFLX), and Comcast (CMCSA).
- Investors are reacting favorably to the possibility of a deal given the potential for consolidation of valuable IP, increased scale in both streaming and theatrical film production, and cost rationalization across overlapping business units. The combined company would unite two of Hollywood’s major studios -- Paramount Pictures and Warner Bros. -- creating a formidable force in both content creation and distribution.
- The strategic logic centers around achieving scale in an increasingly competitive and fragmented media landscape, where legacy players are battling to remain relevant amid rising content costs and subscriber churn.
- If consummated, a merger could fundamentally alter the competitive dynamics of the entertainment industry. The combined libraries of both companies would significantly enhance their direct-to-consumer streaming offerings, potentially positioning them to better fend off subscriber erosion and slow growth at platforms like Paramount+ and Max.
- For rivals like DIS, NFLX, and CMCSA, a PSKY-WBD union could present both a threat -- through sheer content scale -- and a call to further consolidate or pursue aggressive strategic pivots.
- However, Bloomberg reported this morning that such a deal would likely face intense regulatory scrutiny, casting doubt on the feasibility of the merger. The combination would significantly reduce competition in film and TV content production, triggering concerns from antitrust regulators -- especially as it would consolidate control over multiple major cable and streaming properties.
- Additionally, WBD’s owner, David Ellison -- son of Oracle (ORCL) co-founder Larry Ellison -- had already been pursuing a plan to split WBD into two standalone units: one focused on streaming and film, the other on traditional cable networks like TNT and Cartoon Network. Ellison has expressed confidence in the long-term value unlocked by such a split, which could dampen his enthusiasm for a full-scale merger with Skydance, at least in the near term.
Briefing.com Insight:
The reported bid from PSKY to acquire WBD represents a potentially transformative deal that could reshape the media and entertainment landscape. While the market has responded enthusiastically to the news, substantial regulatory and political obstacles remain, casting uncertainty over whether such a high-stakes merger will ever materialize.
Adobe posts upside Q3 results, but AI growth questions linger as revenue outlook disappoints (ADBE)
Adobe (ADBE) delivered a strong Q3 performance, beating EPS and revenue expectations and posting record quarterly revenue, driven by AI-enhanced growth in its subscription business. However, shares are trading lower today as investors digest mixed guidance and continue to weigh ADBE's long-term AI potential amid rising competitive pressures.
- ADBE issued upside Q4 EPS guidance, reflecting continued cost discipline and operating leverage, but its Q4 revenue guidance came in merely in-line. This reinforces the market’s desire for clearer signals that AI is accelerating top-line growth, not just bolstering margins. Concerns have grown around rising competition from third-party generative AI platforms that could threaten Adobe’s dominance in creative software
- AI-influenced Annualized Recurring Revenue (ARR) topped $5.0 bln, a key milestone that highlights growing adoption of ADBE’s AI-powered tools, including Firefly, Sensei AI, and GenStudio. These tools are central to ADBE’s strategy to infuse generative AI across its Creative Cloud, Document Cloud, and Experience Cloud platforms.
- While Firefly has seen early traction with over 9 billion generations to date, and GenStudio is gaining enterprise interest, investors remain focused on whether these solutions will drive meaningful monetization and durable growth.
- Digital Media segment revenue rose 11% yr/yr in constant currency to $4.46 bln, above guidance of $4.37-$4.40 bln. Key growth drivers included strong Creative Cloud adoption, boosted by AI integrations, and solid performance in Document Cloud, especially among enterprise customers. Digital Media ARR rose 12% yr/yr to $18.59 billion exiting the quarter, reflecting a healthy mix of new customer acquisition and net expansion from existing accounts.
- The Digital Experience segment also performed well, with revenue up 9% yr/yr in constant currency to $1.48 bln, slightly above its $1.45-$1.47 bln guidance range. Strength in enterprise customer demand for real-time customer data, personalization, and analytics drove results, aided by ADBE's continued cloud transition and integrations with AI-powered insights.
Briefing.com Analyst Insight:
ADBE turned in a solid Q3, marked by record revenue and some signs that its AI strategy is starting to gain traction. However, the flat revenue outlook for Q4 indicates that AI-related demand has yet to fully deliver the top-line breakout that bulls are hoping for. ADBE’s deep integration of AI into core products is a long-term positive, but with competitive pressures rising, the company must prove that its innovation will translate into consistent, above-trend growth.
Opendoor Soars on Leadership Shakeup, $40M Investment, and Return of Founders (OPEN)
Opendoor surged after announcing a major leadership shakeup that has reignited investor interest in the struggling real estate tech platform. The company named Kaz Nejatian, current COO of Shopify (SHOP), as its new CEO — a move widely seen as a strong vote of confidence in Opendoor's potential.
- Nejatian brings deep AI-native and fintech experience, having previously founded Kash, an early mobile payments platform later acquired by a top US fintech firm.
- Opendoor describes him as a transformational leader well-suited to unlock its unique data and assets at scale.
- Former CEO Carrie Wheeler resigned last month, paving the way for this high-profile hire.
In a further boost to sentiment, co-founders Keith Rabois and Eric Wu are returning to the board, with Rabois taking on the role of Chairman. Their return is viewed as a critical step in bringing renewed strategic vision and operational rigor.
Adding to the momentum, Khosla Ventures and Eric Wu have committed $40 mln in equity capital through a private investment — a strong signal of internal confidence.
Briefing.com Analyst Insight -- Why the stock is popping:
- New leadership with tech and AI credibility — Nejatian's move from Shopify implies he sees real long-term value in Opendoor.
- Return of co-founders is fueling hopes of a turnaround.
- Fresh capital infusion shows belief from insiders and longtime supporters. After a tough stretch in a challenging housing market, this leadership reset could mark a key inflection point for Opendoor.
Delta Air Lines raises Q3 revenue outlook on strong travel demand and capacity discipline (DAL)
Delta Air Lines (DAL) reaffirmed its Q3 guidance while raising the lower end of its adjusted revenue outlook to $14.9-$15.2 bln, equating to growth of 2-4% yr/yr. The prior outlook called for flat-to-4% growth, and today’s update reflects improved booking trends, industry supply rationalization, and continued strength in premium demand. The reaffirmation and upward revision send a bullish signal for both DAL and the broader airline industry heading into the fall.
- DAL specifically called out better-than-expected demand trends and capacity discipline across the U.S. airline sector as key drivers behind the improved Q3 outlook. These tailwinds are expected to bolster unit revenue (TRASM), which has been under pressure in recent quarters due to intense pricing competition and overcapacity in some markets. DAL’s updated view implies that the worst of the domestic revenue softness may be behind it.
- Today’s update follows DAL’s Q2 earnings release on June 10, when the company reinstated its FY25 guidance after pausing it earlier this year due to uncertainty surrounding proposed tariffs. That reinstatement, coupled with today’s strengthened Q3 outlook, suggests rising management confidence in operational execution and market conditions.
- One standout trend continues to be DAL’s success in premium cabins, which command higher margins and have shown resilience across economic cycles. Alongside United Airlines (UAL), DAL has leaned into this segment by catering to younger, affluent travelers -- a strategy that continues to pay off as traditional business travel recovery remains mixed.
Briefing.com Analyst Insight:
DAL’s move to raise the lower end of Q3 revenue guidance reflects a meaningful improvement in the domestic travel environment and confirms a more constructive pricing backdrop. With summer travel demand holding firm and industry-wide capacity growth becoming more rational, DAL appears well-positioned to leverage its network strength and operational efficiency in the back half of the year. The stock reaction may be modest in the short term given recent gains, but today’s reaffirmation reinforces DAL’s status as a best-in-class operator in a gradually normalizing airline market.
The Big Picture
Last Updated: 12-Sep-25 14:54 ET | Archive
A record $7 trillion+ in money market funds is facing pay cuts
Briefing.com Summary:
*Real returns for money market funds are eroding with inflation near 3% and rate cuts on the way.
*Liquidity and safety keep money market funds attractive, but yield compression will drive partial outflows.
*Cash migration depends on confidence that rate cuts sustain growth without reigniting inflation.
Can you hear it with the major indices rallying to new record highs? That is the sound of rate cuts coming. But even if you can't hear it, you can see it in the fed funds futures market.
There is a 100% probability of at least a 25-basis-point cut to 4.00-4.25% at the September FOMC meeting, an 86.3% probability of at least a 25-basis-point cut to 3.75-4.00% at the October meeting, and an 80.9% probability of at least a 25-basis-point rate cut at the December meeting, according to the CME FedWatch Tool.
That is rather remarkable with inflation hovering closer to 3.0% than 2.0%, and the Atlanta Fed GDPNow model estimating real GDP growth of 3.1% on an annualized basis for the third quarter. That hasn't typically been a combination screaming for rate cuts, but with nonfarm payroll growth slowing to stall speed in recent months, Fed officials are sounding more motivated by the employment side of their mandate to justify a rate cut, at least at the September FOMC meeting.
The stock market is loving the idea, partly because the Treasury market has been pricing in the idea, too, leading to lower market rates that have provided stocks with some extra valuation allowance on the premise that the lower rates will facilitate ongoing economic and earnings growth.
The stock market, though, may also just be loving the idea that there are gobs of cash on the sidelines that may soon be looking for a higher-yielding home.
Seven Trillion and Counting
Currently, there is over $7 trillion sitting in money market mutual funds. That is an all-time high, and it is roughly 13% of the S&P 500's market capitalization.
Assets in money market funds surged during the COVID crisis and subsequently accelerated with the normalization of interest rates that followed the Fed's rate-hike campaign in 2022 and 2023. In turn, they have surged with the stock market and home price appreciation that have been huge wealth-generating engines.
Separately, assets in money market funds have surged as part of a safe-haven trade tied to concerns about geopolitics, tariffs, and valuations. Money market funds offer a place to park cash and still generate income in a nearly risk-free way with higher yields than one would get in a normal savings account. Generally speaking, prime money market funds yield something on the order of 3.8% to 4.4% these days.
Money market funds typically invest in high-quality instruments with a shorter duration, like T-bills, certificates of deposit, commercial paper, and repurchase agreements, all of which can be easily exchanged for cash.
Briefing.com Analyst Insight
Where the Federal Reserve's policy rate goes, rates on shorter-duration instruments typically follow. One can infer, then, with the fed funds futures market pricing in three rate cuts before the end of the year, that the yields on money market funds are apt to be coming down in the months ahead, assuming the market has things right.
The far right side of the chart above shows a trendline break between the 3-month T-bill yield and the effective fed funds rate. The chart below captures that break in closer detail, and what it reveals is a market frontrunning the rate cut(s).
It is notable that the inflation rate is closer to 3.0%, so returns on money market funds are coming down on an inflation-adjusted basis, diminishing some of their appeal when real rates were higher. It is an inflection point that will send some (not all) money market fund investors looking elsewhere for higher real rates of return.
The ongoing appeal of money market funds is that they are highly liquid, nearly risk-free, and still offer a better return than anything one can get in a basic savings account, which is why "all" investors won't be fleeing money market funds simply because the Fed is cutting rates. Also, they are good parking spots for investors with more immediate cash needs.
We would expect some migration to other parts of the market, however, that have higher-yielding appeal. That would include Treasuries with longer duration, corporate bonds, and, yes, the stock market, which holds much more risk but appealing return potential on a nominal and real basis.
To be sure, no one is scurrying out of their money market fund to capture a 1.49% dividend yield for the S&P 500. The rotation out of money market funds to the stock market would be about total return and an expectation that the stock market will retain its bullish bias.
With $7 trillion-plus facing pay cuts, so to speak, higher returns will be sought elsewhere. That may just work in the stock market's favor if confidence in the rate cut approach is corroborated by the future data.
-- Patrick J. O'Hare, Briefing.com
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