August 14th Market Overview

Happy Thursday

Markets took a big inflation hit this morning and somehow finished green, that's the kind of juice you want to see in a bull market. PPI jumped 0.9% versus the 0.2% everyone expected, killing Fed “jumbo” cut hopes. Small caps got crushed while the big names held up just fine.

Let's dig in...

Summary

Markets took inflation punch and got back up 
with PPI jumping four times expectations yet indexes recovered from early losses to close higher, proving this bull market has some power.

Hot inflation kills big Fed cut hopes 
as the PPI surprise made traders realize the Fed won't cut rates aggressively - higher inflation means the Fed needs to keep rates higher to cool the economy, not lower them.

Intel could get government money 
as the Trump administration considers taking a stake in the chipmaker for national security reasons, potentially giving the struggling company crucial federal backing.

Amazon is eating food delivery's lunch $AMZN ( ▲ 0.2% ) 
expanding grocery service nationwide, sending DoorDash $DASH, Instacart $CART, Kroger $KR, and Walmart $WMT all lower on the competitive threat.

Market Overview

U.S. Stock Indexes, Past Three Sessions

Stock Spotlight

Berkshire Hathaway added 5 million shares of UnitedHealth Group $UNH ( ▲ 1.47% ) according to regulatory filings. Warren Buffett's conglomerate continues building its healthcare position in the insurance giant.

Intel $INTC ( ▼ 3.66% ) jumped on reports the Trump administration is considering taking a strategic stake in the chipmaker for national security reasons. The potential government backing could provide crucial support for Intel's struggling foundry business.

Nike $NKE ( ▲ 0.6% ) and Lululemon $LULU ( ▲ 2.6% ) both fell on inflation concerns as rising costs threaten consumer spending on premium athletic wear.

Cisco $CSCO ( ▲ 1.13% ) slipped in after-hours trading despite beating quarterly expectations. Forward guidance met expectations rather than raising them.

Big Name Updates

Deere $DE ( ▲ 0.48% ) cut its net income forecast after tariff costs doubled expectations. Steel and aluminum duties are hitting the farm equipment giant harder than anticipated.

Tapestry $TPG ( ▼ 0.7% ) dropped despite beating earnings after warning tariff costs will slash full-year profits. Even luxury goods aren't immune to trade tensions.

CoreWeave $CRWV ( ▼ 3.17% ) tumbled after reporting a steeper-than-expected loss per share despite revenue growth. Investors questioned the AI cloud provider's path to profitability.

Other Notable Company News

Bullish $BLSH ( ▼ 8.87% ) soared in its public debut, closing well above its IPO price. Strong appetite for regulated crypto exposure continues.

JD.com $JD ( ▲ 0.22% ) fell despite topping revenue estimates as quarterly profits declined due to food delivery expansion costs in China.

Brinker International $EAT ( ▼ 1.45% ) beat expectations reflecting Chili's successful turnaround under CEO Kevin Hochman.

Sector Watch

Bond Market

Yields moved higher across the curve following the PPI surprise, with the 10-year settling around 4.29%. Duration-heavy sectors like real estate and utilities took the biggest hits as bond traders walked back expectations for aggressive Fed easing.

• "Higher for longer" narrative returned to market conversation

• The dollar gained against most currencies but weakened versus the yen after Treasury Secretary comments on Bank of Japan policy

• Rate-sensitive sectors faced immediate pressure from the yield spike

Policy Watch

Fed officials rule out 50 basis point cut. 
San Francisco's Mary Daly said a larger move could "send the wrong urgency signal" about labor markets. St. Louis Fed's Alberto Musalem cited labor tightness concerns despite some inflation progress.

Treasury Secretary Scott Bessent 
confirmed the U.S. won't buy more crypto for strategic reserves and criticized the Bank of Japan for falling "behind the curve" on inflation. He also outlined the administration's EU trade deal framework.

Tariff costs hitting corporate earnings. 
Companies across sectors are quantifying hundreds of millions in additional expenses, from burger chains replacing Brazilian suppliers to luxury brands hedging import exposure.

September Fed meeting remains on track 
for a 25 basis point cut, but today's hot PPI data gives hawks more ammunition for a cautious approach.

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What to Watch

Consumer inflation data Friday 
All eyes turn to July CPI after today's hot PPI reading. A similarly strong print could challenge rate cut odds and pressure equity multiples.

Fed minutes release next Wednesday
Will offer clarity on where each member stands after recent data. Look for language on "urgency" around rate cuts and growth versus inflation risk balance.

Retail earnings season kickoff next week 
Major retailers Walmart $WMT, Target $TGT, and Home Depot $HD will show consumer resilience amid inflationary pressure and discretionary spending patterns.

Corporate tariff guidance 
More companies expected to quantify trade policy impacts in earnings calls, following today's warnings from Deere $DE and Tapestry $TPG.

Intel government stake developments 
Watch for official announcements on the Trump administration's potential strategic investment in the chipmaker for national security reasons.

Thanks for reading 🙂

- John