August 25th Market Overview

Happy Monday

Market cooling off today after Friday's rally, tech holding up while broader indices pulled back.

Two big themes for this week imo: The govt's stake in Intel, and Nvidia earnings Wednesday that could determine sentiment on whether this AI boom continues or faces its first real test.

Let's dig in...

Today's Big Picture

Nvidia Earnings Wednesday 
The chip giant reports after the bell with Stifel raising its target to $212. Results will determine if the AI boom continues or faces its first real test across the entire technology sector.

Government Takes Company Stakes 
The Intel $INTC ( ▼ 0.77% ) deal isn't a one-off. Kevin Hassett confirmed this fits Trump's sovereign wealth fund strategy, with more deals promised across strategic sectors.

Fed Rate Cuts On Track 
Powell's Jackson Hole speech keeps September easing alive. Friday's PCE data becomes the key test for whether rate cut odds hold at current levels.

Sector Rotation Continues Keurig Dr Pepper 
$KDP ( ▼ 11.34% ) dropped on its $18 billion JDE Peet's acquisition while Technology and Communication Services outpaced defensive sectors in the ongoing growth rotation.

Market Overview

U.S. Stock Indexes

Stock Spotlight

Intel $INTC ( ▼ 0.77% ) gave back premarket gains as investors weighed government ownership implications. The stake conversion creates a template for industrial policy across strategic sectors.

CSX $CSX ( ▼ 4.92% ) fell after Warren Buffett ruled out acquisition plans despite meeting with the CEO about operational cooperation.

Nvidia $NVDA ( ▲ 1.33% ) 
climbed ahead of Wednesday's earnings. Stifel raised its target to $212 on accelerating GB300 platform demand.

Keurig Dr Pepper $KDP ( ▼ 11.34% ) 
dropped on its $18 billion JDE Peet's acquisition. The deal eventually splits the combined company back into separate coffee and beverage businesses.

Big Name Updates

PDD Holdings $PDD ( ▲ 0.81% ) crushed earnings expectations with ¥22.07 per share versus ¥15.50 estimates. Revenue matched consensus at ¥103.985 billion while operating margins compressed as the Chinese e-commerce giant reinvests in growth.

Apple $AAPL ( ▼ 0.09% ) gained despite lawsuits from Musk's X and xAI alleging anticompetitive practices. Bloomberg reports three-year iPhone redesign plans including a foldable model in 2026.

Alphabet $GOOGL ( ▲ 1.31% ) hit fresh 52-week highs across both share classes, with Class A reaching all-time levels not seen since the 2004 IPO.

Other Notable Company News

MP Materials $MP ( ▲ 5.75% ) advanced after Trump's government stake expansion comments, with the Pentagon already the rare earth miner's largest shareholder.

Aehr Test Systems $AEHR ( ▲ 35.91% ) secured follow-on orders for six AI processor testing systems from a major hyperscaler.

American Eagle $AEO ( ▼ 2.92% ) was downgraded by Bank of America citing tariff headwinds that could offset Sydney Sweeney partnership benefits.

Furniture retailers RH $RH ( ▼ 5.45% ) , Wayfair $W ( ▼ 5.87% ) , and Williams-Sonoma $WSM ( ▼ 2.37% ) declined on Trump's import tariff threats.

Sector Watch

Bond Market

The 10-year Treasury yield held steady at 4.286%, suggesting bond traders remain focused on Friday's PCE inflation data rather than daily equity movements. The stability supports the narrative that rate cuts remain on track.

Policy Watch

Trump's industrial policy took concrete shape with the Intel $INTC stake confirmation. Kevin Hassett's revelation that this fits into sovereign wealth fund planning signals a fundamental shift toward government as equity partner rather than just regulator.

• The furniture sector felt immediate impact from tariff threats, showing how quickly markets price policy risks

• European postal agencies are already pausing U.S. shipments ahead of the August 29 de minimis exemption end

• The Trump administration also halted construction on Orsted's Revolution Wind project off Rhode Island, impacting renewable energy infrastructure

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What to Watch

Nvidia Earnings Wednesday
The semiconductor giant's results will serve as a referendum on AI spending sustainability. Watch for GB300 platform guidance and any commentary about inference workload growth patterns.

PCE Inflation Data Friday 
The Fed's preferred inflation gauge will determine whether September rate cut odds hold or start declining. A hot reading could force traders to recalibrate easing expectations.

Government Stake Expansion
Trump's promise of more deals means companies in defense, semiconductors, and critical materials should expect partnership offers. Which sectors get prioritized will shape market positioning.

China Trade Response 
Beijing's stricter rare earth controls and ongoing negotiations with India suggest escalating trade tensions. Supply chain disruption risks are increasing across strategic materials.

Thanks for reading 🙂

- John