Early Look

Monday, August 25, 2025

U.S. futures are looking slightly lower, seeing a little pullback after surging Friday after Powell-led rally on September cut expectations. Wall Street’s enters the final week of August at an all-time high for the Dow Jones Industrial Average and back near all-time highs for the S&P 500 and Nasdaq as investors piled into stocks on Friday after U.S. Federal Reserve Chair Jerome Powell hinted at a near-term interest-rate cut during his Jackson Hole Symposium speech. Traders boosted bets on a September rate cut after Powell’s comments, now placing a nearly 90% chance of a reduction, versus about 75% before Powell’s remarks. Ten of the 11 S&P 500 sub-sectors traded higher, with consumer discretionary (XLY) biggest gainer, while Consumer Staples slipped. Interest rate sensitive sectors were among the biggest winners on Friday, as the Smallcap Russell 2000 hit its best levels of the year with gains in Homebuilders, Solar, dividend paying stocks and banks surging. Powell’s comments opened the door for a potential rate cut at the Fed’s September 16-17 meeting, although he stressed the importance of jobs and inflation data due before then. For the week, the S&P 500 climbed 0.3%, the Dow climbed 1.5% and the Nasdaq fell 0.6%. Now this week’s attention turns to NVIDIA (NVDA), earnings, PCE inflation data, a heavy dose of software earnings and the start of Wall Street conference season. The Personal Consumption Expenditures (PCE) Price index – the U.S. Federal Reserve’s preferred inflation gauge – is due to be released on Friday, while official nonfarm payrolls data is expected next week. In Asian markets, The Nikkei Index rose 174 points to 42,807, the Shanghai Index gains 57 points to 3,883, and the Hang Seng Index jumps 490 points to 25,829. In Europe, the German DAX is down -56 points to 24,306, while the FTSE 100 was closed.

A few warnings signs remain, but investors continue to overlook them: @GlobalMktObserv noted on “X”, “the NASDAQ market cap relative to US GDP has hit 127%, an ALL-TIME RECORD. The ratio has risen ~50 percentage points since the 2022 bear market low. This is almost TWICE the level seen at the 2000 Dot-Com Bubble peak.” It also noted, “equities ‘SELL SIGNAL’ triggered for the 2nd month: Institutional investors’ cash as a share of assets hit 3.9% in August, up from 3.8% in July. Cash allocations at or below 4% historically indicate a “SELL SIGNAL” for global equities – BofA.”

• The Dow Jones Industrial Average rose 846.24 points, or 1.89%, to 45,631.74
• The Nasdaq Composite spiked 396.22 points, or 1.88%, to 21,496.54
• The Russell 2000 Index surged 87.85 points, or 3.86%, to 2,361.95

• 10:00 AM ET                New Home Sales M/M for July
• 10:30 AM ET                Dallas fed Manufacturing Index for August

• Earnings After the Close: FSCO HEI SMTC SNT

• Fitch affirms UK at AA with stable O/L; growth remains subdued: weak productivity constrains potential; sees moderate fiscal consolidation; challenging spending plans from 2026; political risks to budget execution; high debt constrains fiscal space; fall in inflation expected.

• Keurig Dr Pepper (KDP) announced it will acquire JDE Peet’s N.V. (JDEPY) for €15.7B ($17.1B) in an all-cash transaction, paying €31.85 per share. The deal represents a 33% premium to JDE Peet’s 90-day volume-weighted average stock price.
• American Eagle (AEO) downgraded to Underperform from Neutral at Bank America saying they see a longer path to a more normalized earnings profile in this environment. We cut our F25/F26 EPS estimates by 8%/30% to $0.65/$0.95 to reflect the impact of higher tariffs and lower Aerie sales.
• Porsche (POAHY) has abandoned plans to produce high-performance batteries at its Cellforce subsidiary and expects to cut 200 of nearly 300 jobs at the unit, Reuters reported.

• Orsted (DNNGY) shares tumbled after the U.S. government ordered to halt construction of the near-complete Revolution Wind project. Orsted announced an emergency rights issue of DKK 60 billion ($9.4 billion) earlier in August to help fund a U.S. project sending shares more than 30% lower since. (also watch shares of BWEN, GEV, TPIC among others in the wind names).
• Rocket Lab (RKLB) announced it is boosting its U.S. investments to expand semiconductor manufacturing capacity and provide supply chain security for space-grade solar cells and electro-optical sensors for national security space missions.

• BeOne Medicines Ltd. (ONC) said it entered into an agreement to sell its royalty rights on the worldwide sales, excluding China, of Amgen’s IMDELLTRA(R) for up to $950 million to Royalty Pharma (RPRX). Under the terms of the agreement, BeOne will receive an upfront payment of $885 million, with the option to sell remaining royalties within 12 months for up to $65 million.
• Dyne Therapeutics (DYN) upgraded to Strong Buy from Outperform at Raymond James
• Royalty Pharma plc (RPRX) announced that it has acquired a royalty interest in Amgen’s (AMGN) Imdelltra, a first-in-class DLL3 targeting bispecific T-cell engager, from BeOne Medicines for $885M upfront. The agreement includes an option for BeOne to sell additional Imdelltra royalties to Royalty Pharma for up to $65 million within the next 12 months.

• Fabrinet (FN) upgraded to Overweight from Neutral at JPMorgan and raise tgt to $345 from $318 saying the post-earnings pullback in the shares provides an attractive entry point.
• Okta (OKTA) upgraded to Buy from Hold at Truist and raise tgt to $125 from $100, ahead of fiscal Q2 earnings due on Tuesday as believes Okta is approaching an inflection point as headwinds from seat count pressure and go-to-market changes are seen abating in the second half of FY26.
• SentinelOne (S) downgraded to Neutral from Buy and removed the firm’s price target on the shares as sees increasing competitive pressure from larger platform vendors in the security space and thinks Street estimates for the second half of FY26 and FY27 are too high.
• Taiwan Semi (TSM) cuts Chinese tools from cutting-edge chip production; the world’s top chipmaker shifts 2-nm tool sourcing as American investment accelerates.
• Temu’s owner PDD Holdings (PDD) shares rise after Q2 revenue of 103.98 billion yuan ($14.53 billion) was slightly above the 103.34 billion yuan estimate; Q2 adjusted net income attributable to PDD’s shareholders stood at 32.71 billion yuan during the quarter, compared with 34.43 billion yuan a year earlier.
• President Donald Trump berated NBC and ABC as “two of the worst and most biased networks in history,” adding he’d support the FCC in revoking licenses to their television stations.