August 29th Market Overview

Happy Friday

We are hitting the brakes before the long weekend. The AI darlings are on a cooldown , and the Fed’s preferred inflation gauge stayed stuck at 2.9%, and Caterpillar just stamped a nearly $2 billion price tag on this year’s tariff bill.

Markets may be red today, but August still walks off with a four-month winning streak. Not a bad souvenir for Labor Day 🍺

Remember market is closed on Monday :-)

Let's dig in...

Today's Big Picture

Inflation Print Keeps Cut Bets Alive
Core PCE held at 2.9 % y/y and headline PCE at 2.6 %, matching estimates yet marking the highest core reading since February. Futures still imply an 89 % chance of a September rate cut, leaving the next jobs report as the market’s swing factor.

AI Trade Cools Into Month-End 
A cluster of cautious headlines…Nvidia extending its pullback, Dell Technologies $DELL guiding conservatively, and Marvell Technology trimming revenue expectations. All this knocked the Nasdaq lower and triggered some profit-taking after four strong months.

Tariff Costs Turn Concrete Caterpillar
$CAT warned its 2025 tariff bill could hit $1.8 billion, the de minimis exemption ended for all e-commerce imports, and the Commerce Department tightened chip-equipment rules for Samsung and SK Hynix plants in China—confirming trade policy is moving from rhetoric to real expense.

Market Overview

U.S. Stock Indexes

Stock Spotlight

Nvidia $NVDA ( ▼ 3.41% ) 
pulled back again after the WSJ highlighted fresh Chinese competition and lingering export restrictions. Management’s prior report of fifty-plus percent revenue growth still supports the longer-term story, but traders locking in gains ahead of the long weekend.

Alibaba $BABA ( ▲ 12.8% ) 
U.S.–listed shares jumped on news the company has a domestically manufactured AI chip in testing—Beijing’s boldest move yet to replace restricted Nvidia hardware. The headline overshadowed a margin hit from China’s food-delivery price war.

Caterpillar $CAT ( ▼ 3.52% ) 
The equipment maker said tariffs could cost between $1.5 billion and $1.8 billion this year, resetting earnings expectations and pressuring the wider industrial complex.

Dell Technologies $DELL ( ▼ 8.84% ) 
A strong past quarter was eclipsed by a softer earnings outlook as management warned that AI-server demand will be lumpy. The guidance reinforced the day’s caution across semiconductor and hardware names.

Big Name Updates

Alphabet $GOOGL ( ▲ 0.7% ) 
Both share classes closed at all-time highs, joining the short list of S&P names printing fresh records despite a choppy tape.

JPMorgan Chase $JPM ( ▲ 0.1% ) 
The nation’s largest bank also reached a record, capping a month in which broad financial ETFs logged their strongest gains of the year.

Kraft Heinz $KHC ( ▲ 2.72% ) 
Shares firmed after a Wall Street Journal report said the board is nearing a decision to split the legacy Kraft brands from Heinz condiments, undoing a decade-old merger.

Other Notable Company News

Petco Health & Wellness $WOOF ( ▲ 21.21% )
raised full-year EBITDA guidance after a stronger quarter, sending the stock sharply higher.

Celsius $CELH ( ▲ 5.43% ) 
climbed after PepsiCo increased its ownership stake to eleven percent, reinforcing the energy-drink maker’s distribution edge.

Autodesk $ADSK ( ▲ 8.79% ) 
beat top- and bottom-line estimates and raised current-quarter guidance, crediting robust demand for cloud-based design tools.

Ulta Beauty $ULTA ( ▼ 7.04% ) 
reaffirmed a higher earnings outlook after a solid quarter, though intraday gains faded as profit-taking set in across discretionary names.

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Sector Watch

Bond Market

Treasury yields held steady around 4.23% after the PCE reading, with markets more focused on Fed independence concerns than the inflation uptick. Gold closed at record levels above $3,500 as safe haven demand accelerated.

• Bank of America raised its six-year gold forecast by 6% to $3,049 per ounce, citing structural deficits and political pressure on the Fed
  

• SPDR S&P Bank ETF $KBE gained over 9% in August, tracking for best month since November as rate cut expectations build
  

• Regional banking ETF $KRE up nearly 10% monthly, both on pace for fourth straight winning month

Policy Watch

Fed Independence Battle Escalates

Federal Reserve Governor Lisa Cook appeared in court seeking a restraining order against Trump, with the hearing ending after two hours without a ruling. The constitutional battle over central bank governance creates awkward uncertainty that markets are beginning to price into safe haven assets.

Trade Policy Tightens Further

• The de minimis rule officially ended today, subjecting all e-commerce packages to tariffs regardless of value

• White House offered India a 25% discount on oil purchases if it stops buying Russian energy

• Commerce Department announced changes to licensing for Samsung $005930 and SK Hynix chip facilities in China

China Responds to Pressure

Chinese commercial banks including China Minsheng Banking and Huaxia Bank are tightening oversight of credit card funding for stock investments as retail investors pile into the nation's trillion-dollar market rally.

What to Watch

August Jobs Report

The final employment data before the Fed's September meeting arrives next Friday. A weaker-than-expected report could solidify rate cut expectations, while surprising strength might complicate Powell's decision-making process.

Technology Earnings Next Week

Broadcom $AVGO ( ▼ 3.68% ) reports after Thursday's close, providing another critical look at AI infrastructure demand. Salesforce $CRM ( ▲ 0.68% ) results will gauge corporate software spending appetite in the current environment.

Geopolitical Summit

Leaders from China, India, and Russia convene for the Shanghai Cooperation Organization summit this weekend. Watch for announcements on trade alliances or coordinated responses to U.S. tariff policies that could reshape global economic relationships.

Thanks for reading 🙂

- John

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