The S&P 500 Index ($SPX) (SPY) today is up by +0.36%, the Dow Jones Industrials Index ($DOWI) (DIA) is up by +0.65%, and the Nasdaq 100 Index ($IUXX) (QQQ) is up by +0.20%. September E-mini S&P futures (ESU25) are up +0.40%, and September E-mini Nasdaq futures (NQU25) are up +0.25%.
Stock indexes are moving higher today after five consecutive sessions of declines. Short covering and position squaring are lifting stocks ahead of a speech later this morning from Fed Chair Powell at the Fed’s annual symposium at Jackson Hole, Wyoming. The markets are waiting to see if Mr. Powell stays cautious on inflation or tilts toward supporting a softer labor market.
Stocks may come under pressure today if Fed Chair Powell takes a hawkish tilt and expresses caution about cutting interest rates. Several Fed policymakers this week expressed concerns about inflation, with Cleveland Fed President Beth Hammack saying she’d oppose a Fed rate cut “if the meeting were tomorrow,” and Kansas City President Jeffrey Schmid and Chicago Fed President Goolsbee both said inflation remains too high. Solid US economic data and hawkish Fed commentary over the past week have reduced the chances of a 25 bp Fed rate cut at next month’s FOMC meeting to 71% from 93% last Thursday before the July PPI report.
Comments today from Boston Fed President Susan Collins were slightly hawkish when she said, US economic growth is slowing, but overall economic fundamentals are solid as she sees upside risks to inflation and downside risks on labor. She added that Fed policy is modestly restrictive, which is appropriate.
On the geopolitical front, US Vice President Vance said negotiations over ending Russia’s war in Ukraine are focused on security guarantees for Ukraine and territory Russia wants to control, including Ukrainian territory that it currently isn’t occupying, as the US tries to broker a peace deal between the two countries. The US is working to set up a meeting between Presidents Putin and Zelensky, and if that meeting goes well, President Trump said he’ll look to follow up with a trilateral summit with the leaders.
Regarding tariffs, President Trump widened steel and aluminum tariffs to include more than 400 consumer items that contain the metals, such as motorcycles, auto parts, furniture components, and tableware. The change went into effect on Monday and did not exclude goods already in transit. Last Friday, Mr. Trump said, “I’ll be setting tariffs next week and the week after on steel and on, I would say chips – chips and semiconductors, we’ll be setting sometime next week, week after.” Mr. Trump last week said he planned a 100% tariff on semiconductors but would exempt companies that move chip manufacturing to the US. Mr. Trump also mentioned 200% or 300% tariffs on chips.
In other recent tariff news, Mr. Trump last Tuesday extended the tariff truce with China for another 90 days until November. On August 6, Mr. Trump announced that he will double tariffs on US imports from India to 50% from the current 25% tariff, due to India’s purchases of Russian oil. On August 5, Mr. Trump said that US tariffs on pharmaceutical imports would be announced “within the next week or so.” According to Bloomberg Economics, the average US tariff will rise to 15.2% if rates are implemented as announced, up from 13.3% earlier, and significantly higher than the 2.3% in 2024 before the tariffs were announced.
Federal funds futures prices are discounting the chances for a -25 bp rate cut at 71% at the September 16-17 FOMC meeting, down from 93% last Thursday. The markets are discounting the chances at 50% for a second -25 bp rate cut at the following meeting on October 28-29.
Earnings reports indicate that S&P 500 earnings for Q2 are on track to rise +9.1% y/y, much better than the pre-season expectations of +2.8% y/y and the most in four years, according to Bloomberg Intelligence. With over 93% of S&P 500 firms having reported Q2 earnings, about 83% of companies exceeded profit estimates.
Overseas stock markets today are higher. The Euro Stoxx 50 is up +0.29%. China’s Shanghai Composite climbed to a new 10-year high and closed up +1.45%. Japan’s Nikkei Stock 225 recovered from a 1.5-week low and closed up +0.05%.
Interest Rates
September 10-year T-notes (ZNU5) today are up +4 ticks, and the 10-year T-note yield is down -2.2 bp to 4.306%. Sep T-notes are moving higher on short covering and position squaring ahead of comments later today from Fed Chair Powell at the Fed’s annual symposium in Jackson Hole, Wyoming. Gains in T-notes are limited by hawkish comments from Boston Fed President Susan Collins, who said modestly restrictive Fed policy is appropriate.
European government bond yields today are mixed. The 10-year German bund yield is down -0.9 bp to 2.748%. The 10-year UK gilt yield climbed to a 2.75-month high of 4.759% and is up +0.9 bp to 4.739%.
German Q2 GDP was revised lower to -0.3% q/q and -0.2% y/y from the previously reported -0.1% q/q and unchanged y/y.
Swaps are discounting the chances at 2% for a -25 bp rate cut by the ECB at the September 11 policy meeting.
US Stock Movers
Strength in chipmakers is supporting gains in the broader market. ON Semiconductor (ON), Intel (INTC), Texas Instruments (TXN), GlobalFoundries (GFS), Analog Devices (ADI), ASML Holding NV (ASML), and NXP Semiconductors NV (NXPI) are up more than +1%.
Ubiquiti (UI) is up more than +19% after reporting Q4 revenue of $759.2 million, well above the consensus of $621 million.
Zoom Communications (ZM) is up more than +6% after reporting Q2 revenue of $1.22 billion, better than the consensus of $1.20 billion, and raising its 2026 revenue forecast to $4.83 billion-$4.84 billion from a previous estimate of $4.80 billion-$4.81 billion, stronger than the consensus of $4.81 billion.
Ross Stores (ROST) is up more than +3% to lead gainers in the S&P 500 after reporting Q2 EPS of $1.56, above the consensus of $1.53. Chairman Wang sold 5 million shares in an overnight registered block trade between $116 and $118 per share.
PDD Holdings (PDD) is up more than +3% to lead gainers in the Nasdaq 100 on bullish optimism for Chinese stocks after the Shanghai Composite rallied to a new 10-year high today.
Esab Corp (ESAB) is up more than +2% after Loop Capital Markets upgraded the stock to buy from hold with a price target of $140.
Qxo Inc (QXO) is up more than +1% after Benchmark Company LLC initiated coverage on the stock with a recommendation of buy and a price target of $50..
Ulta Beauty (ULTA) is up more than +1% after Barclays upgraded the stock to overweight from equal weight with a price target of $589.
Intuit (INTU) is down more than -7% to lead losers in the S&P 500 and Nasdaq 100 after forecasting 2026 adjusted operating income of $8.61 billion-$8.69 billion, the midpoint below the consensus of $8.67 billion.
Workday (WDAY) is down more than -6% after reporting an unexpected -$5 million loss in Q2 professional services adjusted gross profit versus expectations of a $9.5 million profit.
Nvidia (NVDA) is down -0.60% to lead losers in the Dow Jones Industrials after reports the company has instructed component makers, including Samsung and Amkor, to stop production related to H20 AI chips for China.
Paramount Skydance (PSKY) is down more than -1% after Guggenheim Securities downgraded the stock to neutral from buy.
Earnings Reports(8/22/2025)
BJ’s Wholesale Club Holdings Inc (BJ), Buckle Inc/The (BKE), New Fortress Energy Inc (NFE), Ubiquiti Inc (UI).
On the date of publication, Rich Asplund did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
