S&P 500 -0.40% lower at 6,370.17 US yields trade higher: 10-year +3.0 bps to 4.329%Gold -0.29% lower to $3,338.42 an ounceDXY +0.42% to 98.64Key data to move markets today
EU: German GDP.
US: Jackson Hole Symposium and a speech by Fed Chair Jerome Powell.
US Stock Indices
Dow Jones Industrial Average -0.34%.
Nasdaq 100 -0.46%.
S&P 500 -0.40%, with 9 of the 11 sectors of the S&P 500 down.
A sense of caution prevailed on Wall Street as investors awaited forthcoming remarks from Fed Chair Jerome Powell at Jackson Hole. This apprehension was amplified by a key manufacturing report, which stoked concerns about persistent inflationary pressures and consequently dimmed the outlook for potential interest rate cuts.
Walmart was a significant driver of the downturn, with its shares falling more than -4.49%. Despite a strong sales performance, the retailer's quarterly profit missed expectations. Furthermore, its CEO warned that tariffs are anticipated to adversely affect the company's performance in H2.
By the close of trading, the major stock indexes had settled lower after another session confined to a narrow range. The Dow Jones Industrial Average declined by -0.34%, ending a five-day period of minimal fluctuation where it rose or fell by less than 0.1%. The S&P 500 declined by -0.40% falling for a fifth consecutive day, its longest such slide since January. The Nasdaq Composite decreased by -0.34%.
According to LSEG I/B/E/S data, y/o/y earnings growth for the Russell 2000 in Q2 is projected to be +68.0%. This number jumps to 89.0% when excluding the Energy sector. Of the 1,676 companies in the Russell 2000 that have reported earnings to date for Q2 2025, 61.8% have reported earnings above analyst estimates, with 63.0% of companies reporting revenues exceeding analyst expectations. The y/o/y revenue growth is projected to be 2.6% in Q2, increasing to 3.2% when excluding the Energy sector.
The Consumer Staples sector, at 73.2%, is the sector with most companies reporting above estimates, while Technology with a surprise factor of 49.3%, is the sector that’s beaten earnings expectations by the highest surprise factor. Within Materials, 48.5% of companies have reported below estimates, and the Communication Services is the sector with the lowest surprise factor at -92.6%. The Russell 2000 surprise factor is 8.3%. The forward four-quarter price-to-earnings ratio (P/E) for the Russell 2000 sits at 26.5x.
In corporate news, International Paper announced a definitive agreement to divest its global cellulose fibers business for approximately $1.5 billion.
Boeing is reportedly in advanced negotiations for a substantial aircraft sale to China, potentially involving 500 planes.
AI firm Anthropic is nearing the completion of a new funding round expected to raise as much as $10 billion in capital.
Apple announced an increase in the subscription price for its Apple TV+ streaming service to $13 per month, marking the first such adjustment since 2023.
S&P 500 Best performing sector
Energy +0.71%, with Expand Energy +1.54 %, Chevron +1.52 %, and APA +1.43 %.
S&P 500 Worst performing sector
Consumer Staples -1.18%, with Walmart -4.49%, Costco Wholesale -2.50%, and Dollar General -2.05%.
Mega Caps
Alphabet +0.21 %, Amazon -0.83%, Apple -0.49%, Meta Platforms -1.15%, Microsoft -0.13%, Nvidia -0.24%, and Tesla -1.17%.
Information Technology
Best performer: Hewlett Packard Enterprise +3.71 %.
Worst performer: First Solar -6.99%.
Materials and Mining
Best performer: Packaging of America +6.17 %.
Worst performer: Dow -1.62%.
European Stock Indicest
CAC 40 -0.44%.
DAX +0.07 %.
FTSE 100 +0.23 %.
Corporate Earnings Reports
Posted on Thursday, 21st August
Walmart quarterly revenue +4.8% to $177.402 bn vs. $175.935 bn estimate.
EPS at $0.68 vs. $0.73 estimate.
Doug McMillon, President and CEO, said, “The top-line momentum we have in our business comes from how we’re innovating and executing. Connecting with our customers and members through digital experiences is helping to drive our business, and the way we’re deploying AI will make these experiences even better. We’re people-led and tech-powered, and I love how our associates continue to drive change and results for our company” — see report.
Intuit quarterly revenue +20.3% to $3.831 bn vs. $3.742 bn estimate.
EPS at $2.75 vs. $2.66 estimate.
Sasan Goodarzi, CEO, said, “We had an exceptional fiscal 2025 with 20 percent growth in the fourth quarter and 16 percent growth for the full year. Our virtual team of AI agents and AI-enabled human experts are powering success for consumers and businesses. We could not be more excited about the opportunity ahead.” — see report.
Zoom Communications quarterly revenue +4.7% to $1.217 bn vs. $1.198 bn estimate.
EPS at $1.53 vs. $1.38 estimate.
Eric S. Yuan, Founder and CEO, said, “AI is transforming the way we work together, and Zoom is at the forefront, driving innovation that helps people get more done, reduce costs, and deliver better experiences for customers and employees alike. We delivered an across-the-board strong Q2 marked by achieving our highest year-over-year revenue growth in 11 quarters and expanding GAAP operating margin year over year by 9 percentage points. With our robust performance, we are happy to raise our full year outlook for revenue, non-GAAP operating income, as well as free cash flow, which we now expect to be in the range of $1.74 billion to $1.78 billion.” — see report.
Commodities
Gold spot -0.29% to $3,338.42 an ounce.
Silver spot +0.73% to $38.17 an ounce.
West Texas Intermediate +0.54% to $63.48 a barrel.
Brent crude +0.94% to $67.58 a barrel.
Gold prices declined on Thursday, pressured by a strengthening US dollar.
Spot gold fell by -0.29% to $3,338.425 per ounce. This decrease corresponded with a +0.42% advance in the US dollar index. A stronger dollar typically makes the dollar-denominated metal more expensive for international buyers, which can subdue demand.
Oil prices advanced on Thursday, supported by escalating geopolitical tensions surrounding the stalled peace process between Russia and Ukraine, alongside US data indicating robust demand.
Brent crude futures rose by 63 cents, or +0.94%, to settle at $67.58 a barrel, a two-week high. US WTI crude futures gained 34 cents, or +0.54%, to close at $63.48 a barrel.
The gains mark a reversal from a decline over the previous two weeks, which was driven by hopes for a diplomatic end to the conflict. However, with Moscow and Kyiv blaming each other for the lack of progress in negotiations, market sentiment has shifted. Recent escalations, including a major Russian air attack near Ukraine's border with the EU and a reported Ukrainian strike on a Russian oil refinery, have reintroduced a risk premium. The uncertainty has renewed speculation about the potential for tighter international sanctions on Russia.
On the demand side, prices were supported by a report from the US Energy Information Administration on Wednesday. The data showed that US crude stockpiles fell by 6 million barrels in the week ending 15th August, signaling strong demand in the world's top oil-consuming nation.
Note: As of 5 pm EDT 21 August 2025
Currencies
EUR -0.34% to $1.1613.
GBP -0.33% to $1.3410.
Bitcoin -1.34% to $112,493.77.
Ethereum -1.95% to $4,240.86.
The US dollar strengthened on Thursday as financial markets positioned themselves ahead of a highly anticipated speech by Fed Chair Jerome Powell, scheduled for today. The prevailing market expectation is that Chair Powell will refrain from clearly signaling a September interest rate cut, as key economic data for August has not yet been released.
The theme for this year's annual Fed symposium in Jackson Hole, where Chair Powell will be speaking, is ‘Labor Markets in Transition.’
The dollar experienced intraday volatility following mixed economic reports. The currency temporarily retreated after data showed that new applications for US unemployment benefits rose last week by the most in roughly three months.
However, the dollar later resumed its rally after a separate report indicated that US business activity accelerated in August. This expansion was led by a significant resurgence in the manufacturing sector, which posted its strongest growth in new orders in 18 months.
By the end of the trading session, the US dollar index was up +0.42% at 98.60. The euro declined by -0.34% to $1.1613. The Japanese yen weakened by -0.70% against the dollar, trading at ¥148.33. British sterling fell by -0.33% to $1.3410.
Fixed Income
US 10-year Treasury +3.0 basis points to 4.329%.
German 10-year bund +4.0 basis points to 2.759%.
UK 10-year gilt +5.9 basis points to 4.732%.
US Treasury yields rose on Thursday as market participants reassessed the likelihood of a near-term Fed interest rate cut ahead of widely anticipated remarks from Fed Chair Jerome Powell.
The yield on the 10-year Treasury note increased by +3.0 bps to 4.329%. Similarly, the two-year note yield, highly sensitive to monetary policy expectations, climbed +3.3 basis points to 3.800%. On the long end of the maturity spectrum, the 30-year yield advanced by +2.2 bps to 4.920%.
The move in yields on Thursday followed a decline on Wednesday afternoon after the release of the minutes from the FOMC July meeting. The report confirmed that the two policymakers who dissented against the decision to hold rates steady had not garnered broader support for their position.
Auctions for short-term debt, including $100 billion in four-week bills and $85 billion in eight-week bills, were met with soft demand, causing them to price at yields higher than market expectations.
In contrast, an $8 billion auction of 30-year Treasury Inflation-Protected Securities (TIPS) saw strong demand, achieving a bid-to-cover ratio of 2.78x, which was higher than the last offering and the average of the last six auctions. The bond priced at 2.65%, a rate lower than what was forecast at the bid deadline.
Looking ahead, the US Treasury Department also announced its auction schedule for the upcoming week, which includes the sale of $69 billion in two-year notes, $28 billion in two-year TIPS, $70 billion in five-year notes, and $44 billion in seven-year notes.
Fed funds futures traders are now pricing in a 75.0% probability of a rate cut in September, down from 92.1% last week, according to CME Group's FedWatch Tool. Traders are currently anticipating 48.2 bps of cuts by year-end, lower than the 57.0 bps expected last week.
Across the Atlantic, eurozone government bond yields rose on Thursday as financial markets assessed stronger-than-expected business activity data.
The positive economic data from the eurozone indicated that new business orders increased in August for the first time since May 2024. This development supported the fastest expansion in overall activity in 15 months, despite persistent weakness in exports. Similarly, business activity in the UK surpassed expectations, with PMIs showing the strongest monthly growth in a year, driven by a rebound in the dominant services sector.
In Thursday's session, Germany's 10-year bond yield increased by +4.0 bps to 2.759%, and the rate-sensitive 2-year yield rose by +3.5 bps to 1.971%. Yields on 30-year bonds advanced by +3.6 bps to 3.328%.
In the UK, the 10-year gilt yield increased by +5.9 bps to 4.732%. Italy's 10-year yield experienced a +6.1 bps increase to 3.589%, which widened the spread between Italian and German 10-year yields to 83.0 bps.
Looking ahead, market participants are focused on a speech by Fed Chair Powell today. His remarks will be closely analyzed for insights into the potential for a September interest rate cut by the FOMC.
Note: As of 5 pm EDT 21 August 2025
Global Macro Updates
Jackson Hole sees a hawkish shift in Fedspeak. On Thursday, several Fed officials offered diverse views on the outlook for monetary policy, highlighting the debate within the central bank ahead of its September meeting.
Speaking from the Jackson Hole economic symposium, Cleveland Fed President Beth Hammack stated that if the policy meeting were held tomorrow, she would not vote for an interest rate cut. The non-voting member argued that inflation remains too high and has recently been trending upward, according to Bloomberg.
Echoing a similarly cautious tone in an interview with CNBC, Kansas City Fed President Jeffrey Schmid, a voting member this year, expressed skepticism about a September reduction. He remarked that while the Fed is in a "really good spot," very definitive data is required to justify a move lower. Schmid warned that progress on inflation may be stalling and that the central bank still has "some work to do," noting his estimate for inflation is closer to 3% than the 2% target.
In contrast, Atlanta Fed President Raphael Bostic reiterated that his baseline forecast still includes one rate cut this year. The non-voter, cited by Reuters, Bostic characterized the current federal funds rate target range as 'marginally restrictive.' This statement comes amidst ongoing discussions regarding the necessity of a rate cut. He anticipates 'relatively tepid' overall growth this year, followed by a rebound next year as businesses gain more clarity on the general direction of US economic policy.
US - EU deal framework announced. A framework agreement between the US and the EU has established a new trade deal, which analysts suggest is markedly imbalanced and underscores Europe's current geopolitical vulnerabilities.
Under the terms of the agreement, the US will cap tariffs at 15% on a majority of EU goods, including significant reductions for automobiles (from 27.5%), as well as for pharmaceuticals, semiconductors, and lumber. In contrast, the EU is required to eliminate all industrial tariffs on US imports and grant preferential market access to American seafood and agricultural products. Notably, tariffs on steel and aluminum will remain at a rate of 50%, with only vague promises of future supply chain cooperation.
According to analysts, this ostensibly ‘reciprocal’ deal reflects Europe's significant reliance on American military security, particularly as the continent undertakes rearmament efforts. This dependency has reportedly compelled the EU to make substantial, albeit unenforceable, commitments, including the purchase of $750 billion in US energy and $600 billion in American investments by 2028.
Furthermore, analysts highlighted the non-binding nature of the agreement, characterizing the EU's position as one of ‘damage control.’ The framework may also introduce flexibilities in EU regulations, such as the Carbon Border Adjustment Mechanism (CBAM) and the Corporate Sustainability Due Diligence Directive (CSDDD), which could reduce bureaucracy for US firms but also risk future trade escalations.
For the US, the agreement is positioned to generate tariff revenue that could help address fiscal gaps, while the reduction in trade uncertainty is expected to benefit business planning. However, the inherent imbalance of the pact may undermine long-term transatlantic equity. The EU's significant financial pledges towards US-made AI chips and military equipment are viewed less as signs of a genuine partnership and more as indicators of a deepening strategic dependency.
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