Stock Market Live August 25: Investors Hold Breath Awaiting Nvidia Earnings, S&P 500 (VOO) Edges Lower
Investing
- On Friday, the U.S. government officially made its 10% investment in Intel — which could rise to 15%.
- Rival chipmaker Nvidia reports this coming Wednesday, followed by Marvell on Thursday.
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The Vanguard S&P 500 ETF closed Monday at 590.66, down 0.4%.
Investment bank Stifel raised its price target on Nvidia to $212 ahead of Q2 earnings, while reiterating its buy rating on the AI semiconductors giant. Stifel forecasts an earnings beat for Nvidia and raised guidance as well, based on H20 AI chip shipments to China and demand for more advanced GB200 and GB300 chips.
Nvidia stock is up 2%, and the Voo is paring its losses, now down less than 0.1%.
BofA Securities analyst Christopher Nardone downgraded American Eagle Outfitters (NYSE: AEO) to underperform with a $10 price target this morning. “Normalized earnings” look farther off, says the analyst, with tariff costs and lower sales at Aerie weighing on profits in 2025.
Nardone forecasts a $0.65 per share profit this year, and $0.95 next year, and warns AE’s dividend is increasingly at risk. The stock is down more than 3%.
Raymond James analyst Savanthi Syth downgraded American Airlines (Nasdaq: AAL) stock to market perform this morning on valuation concerns, nothing that “the stock approaches our prior $14 target price.” Syth does see the potential for troubles at Spirit Airlines to boost American’s fortunes, but doesn’t expect “outsized benefits” unless Spirit actually goes out of business entirely.
American Airlines shares are trading down about 2% in the first few minutes of trading. The Voo is now down 0.2%.
This article will be updated throughout the day, so check back often for more daily updates.
The Vanguard S&P 500 ETF (NYSEMKT: VOO) is set to open 0.3% lower on Monday after scoring a big 1.5% gain on Friday, as traders digest their winnings and wonder “what’s next?” this week. Prospects for a September reduction in interest rates rose to 84% Friday after Fed Chairman Jerome Powell expressed openness to the idea of cutting rates, but that decision still remains about three weeks off.
The next Federal Open Market Committee (FOMC) meeting is scheduled for September 16-17.
More immediately, investors are looking ahead to earnings reports from Nvidia (Nasdaq: NVDA) on Wednesday, and then Dell (NYSE: DELL) and Marvell (Nasdaq: MRVL) on Thursday, as indications of the tech sector’s health. Then on Friday, we’ll hear from the U.S. Bureau of Economic Analysis (BEA), reporting the Personal Consumption Expenditures (PCE) price index for July, which is the Fed’s preferred gauge of the annual inflation rate.
“Core” PCE is expected to rise slightly from June, up 0.1 percentage point to 2.9%.
In other news, the rumors proved true. On Friday, Commerce Secretary Howard Lutnick confirmed that the U.S. government has taken a 10% stake in Intel (Nasdaq: INTC) stock. The government paid $8.9 billion to acquire 433.3 million Intel shares at $20.47 per share, a discount to its then-current market price.
$5.7 billion of the payment came from “grants under the CHIPS Act that had been awarded but not paid,” reports CNBC. The remaining $3.2 billion will come from other government awards. The government also has a warrant to buy a further 5% of Intel shares should Intel lose majority ownership of its contract chipmaking business.
Earnings
Earnings reports are typically light on Monday. Today our biggest news comes from Temu-owner Pinduoduo (Nasdaq: PDD), which soundly beat forecasts with a report of RMB22.07 in Q2 earnings. Revenue was a smaller beat, RMB 104 billion versus the RMB103.2 billion expectations.
Pinduoduo shares, which are not an S&P 500 component, are down 2.5% premarket.
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