The S&P 500 Index ($SPX) (SPY) on Friday closed up by +1.52%, the Dow Jones Industrials Index ($DOWI) (DIA) closed up by +1.89%, and the Nasdaq 100 Index ($IUXX) (QQQ) closed up by +1.54%. September E-mini S&P futures (ESU25) rose +1.52%, and September E-mini Nasdaq futures (NQU25) rose +1.55%.
Inventory indexes settled sharply increased on Friday, with the Dow Jones Industrials posting a brand new all-time excessive. Inventory costs jumped and bond yields tumbled after feedback from Fed Chair Powell opened the door for a Fed fee lower subsequent month. Fed Chair Powell mentioned draw back dangers to employment are rising, and the shifting stability of dangers might warrant adjusting financial coverage. The ten-year T-note yield fell to a 1-week low of 4.24% on the feedback, and the probabilities of a Fed fee lower on the September 29-30 FOMC assembly rose to 81% from 71% earlier than Powell spoke.
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Fed Chair Powell mentioned, “The soundness of the unemployment fee and different labor market measures permits us to proceed fastidiously as we take into account adjustments to our coverage stance. Nonetheless, with coverage in restrictive territory, the baseline outlook and the shifting stability of dangers might warrant adjusting our coverage stance.”
Feedback from Boston Fed President Susan Collins on Friday had been barely hawkish, as she famous that US financial development is slowing, however general financial fundamentals are strong, with upside dangers to inflation and draw back dangers to labor. She added that Fed coverage is modestly restrictive, which is suitable.
On the geopolitical entrance, US Vice President Vance mentioned negotiations over ending Russia’s warfare in Ukraine are targeted on safety ensures for Ukraine and territory Russia needs to regulate, together with Ukrainian territory that it at present is not occupying, because the US tries to dealer a peace deal between the 2 nations. The US is working to arrange a gathering between Presidents Putin and Zelensky, and if that assembly goes effectively, President Trump mentioned he’ll look to observe up with a trilateral summit with the leaders.
Relating to tariffs, President Trump widened metal and aluminum tariffs to incorporate greater than 400 shopper objects that include the metals, equivalent to bikes, auto elements, furnishings parts, and tableware. The change went into impact on Monday and didn’t exclude items already in transit. Final Friday, Mr. Trump mentioned, “I will be setting tariffs subsequent week and the week after on metal and on, I’d say chips – chips and semiconductors, we’ll be setting someday subsequent week, week after.” Mr. Trump final week mentioned he deliberate a 100% tariff on semiconductors however would exempt corporations that transfer chip manufacturing to the US. Mr. Trump additionally talked about 200% or 300% tariffs on chips.
In different current tariff information, Mr. Trump final Tuesday prolonged the tariff truce with China for one more 90 days till November. On August 6, Mr. Trump introduced that he’ll double tariffs on US imports from India to 50% from the present 25% tariff, on account of India’s purchases of Russian oil. On August 5, Mr. Trump mentioned that US tariffs on pharmaceutical imports could be introduced “inside the subsequent week or so.” In response to Bloomberg Economics, the common US tariff will rise to fifteen.2% if charges are carried out as introduced, up from 13.3% earlier, and considerably increased than the two.3% in 2024 earlier than the tariffs had been introduced.
Federal funds futures costs are discounting the probabilities for a -25 bp fee lower at 81% on the September 16-17 FOMC assembly, up from 71% Thursday. The markets are discounting the probabilities at 55% for a second -25 bp fee lower on the following assembly on October 28-29.
Earnings experiences point out that S&P 500 earnings for Q2 are on monitor to rise +9.1% y/y, significantly better than the pre-season expectations of +2.8% y/y and essentially the most in 4 years, in line with Bloomberg Intelligence. With over 94% of S&P 500 corporations having reported Q2 earnings, about 82% of corporations exceeded revenue estimates.
Abroad inventory markets on Friday settled increased. The Euro Stoxx 50 rallied to a 5-month excessive and closed up +0.48%. China’s Shanghai Composite climbed to a brand new 10-year excessive and closed up +1.45%. Japan’s Nikkei Inventory 225 recovered from a 1.5-week low and closed up +0.05%.
Curiosity Charges
September 10-year T-notes (ZNU5) on Friday closed up +19 ticks, and the 10-year T-note yield fell -7.2 bp to 4.256%. Sep T-notes rallied to a 1-week excessive Friday, and the 1-year T-note yield dropped to a 1-week low of 4.240%. T-note costs jumped Friday on dovish feedback from Fed Chair Powell, who mentioned draw back dangers to employment are rising and the shifting stability of dangers might warrant adjusting financial coverage. Powell’s feedback boosted the probabilities for a 25 bp Fed fee lower to 81% on the September 29-30 FOMC assembly from 71% on Thursday.
Positive factors in T-notes are restricted by hawkish feedback from Boston Fed President Susan Collins, who mentioned modestly restrictive Fed coverage is suitable. Additionally, rising inflation expectations are bearish for T-notes after the 10-year breakeven inflation fee rose to a 3-week excessive on Friday at 2.421%.
European authorities bond yields on Friday moved decrease. The ten-year German bund yield fell -3.5 bp to 2.722%. The ten-year UK gilt yield fell from a 2.75-month excessive of 4.759% and completed down -3.7 bp to 4.693%.
German Q2 GDP was revised decrease to -0.3% q/q and -0.2% y/y from the beforehand reported -0.1% q/q and unchanged y/y.
Swaps are discounting the probabilities at 2% for a -25 bp fee lower by the ECB on the September 11 coverage assembly.
US Inventory Movers
Power in chipmakers supported good points within the broader market. ON Semiconductor (ON) closed up greater than +6% and GlobalFoundries (GFS) and Intel (INTC) closed up greater than +5%. Additionally, NXP Semiconductors NV (NXPI) and Microchip Know-how (MCHP) closed up greater than +4%, and ARM Holdings Plc (ARM) closed up greater than +3%. As well as, Superior Micro Units (AMD), Texas Devices (TXN), Marvell Know-how (MRVL), ASML Holding NV (ASML), and Qualcomm (QCOM) closed up greater than +2%.
The Magnificent Seven megacap expertise shares rallied Friday, a bullish issue for the general market. Tesla (TSLA) closed up greater than +6%, and Alphabet (GOOGL) and Amazon.com (AMZN) closed up greater than +3%. Additionally, Meta Platforms (META) closed up greater than +2%, and Apple (AAPL) and Nvidia (NVDA) closed up greater than +1%. As well as, Microsoft (MSFT) closed up +0.59%.
Financial optimism boosted airways and cruise line operators on Friday. Norwegian Cruise Line Holdings (NCLH), American Airways Group (AAL), and Alaska Air Group (ALK) closed up greater than +7%. Additionally, Carnival (CCL), Delta Air Traces (DAL), and Royal Caribbean Cruises Ltd (RCL) closed up greater than +6%. As well as, United Airways Holdings (UAL) and Southwest Airways (LUV) closed up greater than +5%.
Homebuilders and residential constructing provides moved increased Friday after the 10-year T-note yield fell to a 1-week low, a supportive issue for housing demand. Builders FirstSource (BLDR) closed up greater than +8%, and Mohawk Industries (MHK) closed up greater than +7%. Additionally, Lennar (LEN), PulteGroup (PHM), DR Horton (DHI), and Toll Brothers (TOL) closed up greater than +5%.
Ubiquiti (UI) closed up greater than +29% after reporting This autumn income of $759.2 million, effectively above the consensus of $621 million.
Zoom Communications (ZM) closed up greater than +12% after reporting Q2 income of $1.22 billion, higher than the consensus of $1.20 billion, and elevating its 2026 income forecast to $4.83 billion-$4.84 billion from a earlier estimate of $4.80 billion-$4.81 billion, stronger than the consensus of $4.81 billion.
Qxo Inc (QXO) closed up greater than +7% after Benchmark Firm LLC initiated protection on the inventory with a advice of purchase and a value goal of $50..
Esab Corp (ESAB) closed up greater than +4% after Loop Capital Markets upgraded the inventory to purchase from maintain with a value goal of $140.
Intuit (INTU) closed down greater than -5% to steer losers within the S&P 500 and Nasdaq 100 after forecasting 2026 adjusted working earnings of $8.61 billion-$8.69 billion, the midpoint beneath the consensus of $8.67 billion.
CSX Corp (CSX) closed down greater than -3% after saying a joint intermodal service with BNSF to ship between California, North Carolina, and Florida.
Workday (WDAY) closed down greater than -2% after reporting an surprising -$5 million loss in Q2 skilled providers adjusted gross revenue versus expectations of a $9.5 million revenue.
Telecommunication shares had been underneath stress on Friday. AT&T (T) and T-Cellular US (TMUS) closed down greater than -2%. Additionally, Verizon Communications (VZ) closed down greater than -1% to steer losers within the Dow Jones Industrials.
Earnings Experiences(8/25/2025)
HEICO Corp (HEI), Napco Safety Applied sciences Inc (NSSC), PDD Holdings Inc (PDD), Semtech Corp (SMTC).
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