S&P 500 -0.59% lower at 6,411.37 US yields trade lower: 10-year -3.1 bps to 4.309%Gold -0.55% l ower to $3,315.38 an ounceDXY +0.15% to 98.28What to look out for today
Companies reporting on Wednesday, 20th August: Target, Baidu, The Estee Lauder Companies, Analog Devices, Lowe’s Companies
Key data to move markets today
EU: German PPI, Eurozone Harmonised Index of Consumer Prices and Core Harmonised Index of Consumer Prices, and a speech by ECB President Christine Lagarde.
UK: CPI, PPI and RPI.
US: FOMC Minutes and speeches by Fed Governor Christopher Waller and Atlanta Fed President Raphael Bostic.
China: PBoC Interest Rate Decision.
US Stock Indices
Dow Jones Industrial Average +0.02 %.
Nasdaq 100 -1.39%.
S&P 500 -0.59%, with 4 of the 11 sectors of the S&P 500 down.
On Tuesday, the S&P 500 declined -0.59%, primarily due to a sell-off in the Information Technology sector that offset broad-based strength in seven sectors in the index.
The decline was driven by previously top-performing equities, such as Palantir Technologies and Advanced Micro Devices, while capital flowed into more defensive sectors like Utilities and Healthcare. The Nasdaq Composite was weighed down by losses across all of the Magnificent Seven stocks and ended the day -1.46%.
Sentiment in the derivatives market reflects a growing apprehension regarding the technology sector's outlook. There has been a marked increase in demand for downside protection, specifically through the acquisition of put options on the Invesco QQQ Trust Series 1 ETF. A notable rise in the market's volatility skew, which measures the cost of such hedging instruments, has reached its highest point in almost three years, signifying a material increase in investor concern over a potential sharp correction.
In corporate news, Microsoft faces escalating employee activism as a protest encampment has been established at its Redmond, Washington headquarters. The campaign is demanding that the company cease its business dealings with Israel due to the ongoing conflict in Gaza.
Ford Motor and its joint-venture partner, South Korea’s SK On, are reportedly seeking buyers for surplus battery production from their new factory in Kentucky. This underscores the moderating demand for electric vehicles within the US.
Viking Therapeutics announced that its experimental oral obesity drug produced disappointing results in a mid-stage study. This marks another setback for the development of a viable oral alternative to the market's popular injectable weight-loss medications.
Black Hills and NorthWestern Energy Group have agreed to merge in a transaction valued at $3.6 billion. The deal highlights the surging demand for electricity, largely driven by the rapid expansion of data centres.
Nexstar Media Group has agreed to acquire television operator Tegna in an all-cash deal valued at $3.5 billion. The transaction, which would expand Nexstar's broadcast reach to an estimated 80% of US households, is expected to face regulatory scrutiny regarding media consolidation.
Medtronic will expand its board of directors after Elliott Investment Management disclosed a significant stake in the company. Concurrently, the medical device manufacturer reported Q2 profits that surpassed analyst expectations and raised its full-year earnings guidance.
S&P 500 Best performing sector
Real Estate +1.80%, with Prologis +5.05 %, Federal Realty Investment Trust +3.16 %, and Kimco Realty +2.79 %.
S&P 500 Worst performing sector
Information Technology -1.88%, with Palantir Technologies -9.35%, Oracle -5.80%, and Super Micro Computer -5.71%.
Mega Caps
Alphabet -0.88%, Amazon -1.50%, Apple -0.14%, Meta Platforms -2.07%, Microsoft -1.42%, Nvidia -3.50%, and Tesla -1.75%.
Information Technology
Best performer: Intel +6.97 %.
Worst performer: Palantir Technologies -9.35%.
Materials and Mining
Best performer: Sherwin-Williams +2.53 %
Worst performer: Albemarle -3.06%.
European Stock Indicest
CAC 40 +1.21 %.
DAX +0.45 %.
FTSE 100 +0.34 %.
Corporate Earnings Reports
Posted on Tuesday, 19th August
Medtronic quarterly revenue +7.2% to $8.578 bn vs. $8.379 bn estimate.
EPS at $1.26 vs. $1.23 estimate.
Geoff Martha, Chairman and CEO, said, “We delivered another consistent quarter of mid-single digit organic revenue growth, with broad strength from several innovative product categories, including Pulsed Field Ablation, Transcatheter Valves, Neuromodulation, Diabetes, and Leadless Pacing. We’re confident and well positioned to accelerate our revenue growth in the second half of our fiscal year, as we make meaningful progress on our major growth drivers.” — see report.
The Home Depot quarterly revenue +4.9% to $45.277 bn vs. $45.412 bn estimate.
EPS at $4.68 vs. $4.72 estimate.
Ted Decker, Chair, President and CEO, said, “Our second quarter results were in line with our expectations. The momentum that began in the back half of last year continued throughout the first half as customers engaged more broadly in smaller home improvement projects. Our teams are executing at a high level and we continue to grow market share. I would like to thank our associates for their continued hard work and dedication..” — see report.
XPeng quarterly revenue +123.5% to $2.538 bn vs. $2.494 bn estimate.
Loss Per Share at -$0.07 vs. -$0.11 estimate.
Xiaopeng He, Chairman and CEO, said, “In the second quarter of 2025, XPENG achieved record-high performance across key operational and financial metrics, including vehicle deliveries, revenue, gross margin, and cash position. By 2025, we have completed upgrades to the next generation technology platforms for smart and electrification technologies, further strengthening our technology leadership over our peers. This will enable our strong product cycle to generate stronger momentum and accelerate sales growth.” — see report.
Commodities
Gold spot -0.55% to $3,315.38 an ounce.
Silver spot -1.77% to $37.34 an ounce.
West Texas Intermediate -1.07% to $62.60 a barrel.
Brent crude -0.77% to $65.99 a barrel.
Gold prices declined on Tuesday, pressured by a strengthening US dollar as investors adopted a cautious stance ahead of Fed Chair Powell's speech at the Jackson Hole symposium later this week.
Spot gold fell by -0.55% to $3,315.38 per ounce, after reaching its lowest level since 1st August earlier in the session. The dollar index pared its losses to remain steady, creating headwinds for the non-yielding precious metal, which traditionally performs well in low-interest-rate environments.
Oil prices declined on Tuesday amid speculation that diplomatic negotiations regarding the conflict in Ukraine could lead to an easing of sanctions on Russian crude, which would subsequently boost global supply. This market sentiment was reinforced by the US President, who confirmed that arrangements were being made for a potential meeting between the leaders of Russia and Ukraine.
Reflecting this outlook, Brent crude futures fell by $0.51, or -0.77%, to settle at $65.99 a barrel. Similarly, WTI crude futures for September delivery, which expire Wednesday, concluded the day at $62.60 a barrel, a decrease of $0.68, or -1.07%.
In a related development, Chinese refineries have reportedly purchased 15 cargoes of Russian oil for October and November delivery as demand from India for Moscow's exports has declined.
Note: As of 5 pm EDT 19 August 2025
Currencies
EUR -0.13% to $1.1646.
GBP -0.11% to $1.3487.
Bitcoin -2.85% to $113,405.07.
Ethereum -4.69% to $4,152.84.
The US dollar lacked clear direction on Tuesday’s trading session as market participants deferred significant positioning ahead of the Fed's Jackson Hole Economic Policy Symposium later this week.
While the minutes from the FOMC July meeting are scheduled for release today, their relevance may be diminished as the meeting preceded July’s NFP jobs report.
The US dollar index edged higher by +0.15% to 98.28. The euro weakened against the dollar, declining -0.13% to $1.1646, while the Japanese yen strengthened, with the dollar falling -0.16% to ¥147.58.
Sterling also slipped -0.11% to $1.3487 as attention shifted towards UK consumer price inflation data due today. An acceleration in this data could temper the pace of interest rate cuts anticipated by the BoE, though the outlook is complicated by weakness in Britain's labour market.
This subdued activity occurs within a broader context of relatively muted currency movements over the past few weeks, following a significant decline in the dollar earlier in the year.
Fixed Income
US 10-year Treasury -3.1 basis points to 4.309%.
German 10-year bund -1.2 basis points to 2.755%.
UK 10-year gilt +0.4 basis points to 4.746%.
US Treasury yields declined across the maturity spectrum on Tuesday as the bond market adopted a cautious stance ahead of Fed Chair Jerome Powell's speech at the annual Jackson Hole symposium on Friday. This event will be watched closely as Powell used the 2022 conference to signal a strong anti-inflationary policy.
While many now expect Powell to strike a more dovish tone, the Fed's data-dependent strategy is being compromised by conflicting economic signals.
Some analysts contend that potential rate cuts may not effectively address current labour market weakness if it stems from structural issues, such as trade uncertainty or labour-saving technologies, rather than a lack of aggregate demand. They note that while monetary easing could act as insurance against further labour market deterioration, it is not necessarily a solution as most believe, and could risk prompting bond vigilantes to push rates higher.
The two-year Treasury yield, sensitive to monetary policy expectations, fell by -1.2 bps to 3.771% yesterday. Further along the curve, the 10-year yield declined by -3.1 bps to 4.309%, and the 30-year yield decreased by -2.5 bps to 4.911%.
Fed funds futures traders are now pricing in a 86.1% probability of a rate cut in September, down from 93.9% last week, according to CME Group's FedWatch Tool. Traders are currently anticipating 55.3 bps of cuts by year-end, lower than the 60.4 bps expected last week.
Across the Atlantic, eurozone government bond markets were largely range-bound on Tuesday ahead of the Fed’s Jackson Hole symposium.
The quiet trading environment was reflected in German yields, with the 10-year yield falling -1.2 bps to 2.755% and the policy-sensitive two-year yield declining -2.6 bps to 1.954%.
Market sentiment is anchored by expectations that the ECB will keep interest rates on hold at its September meeting.
Italy's 10-year yield fell -1.4 bps to 3.554%, leaving the Italian-German 10-year spread at 79.9 bps, 0.7 bps higher than the previous session. The spread between Italian and French 10-year yields also continued to narrow, last at 11.6 bps.
Underlying these market dynamics, a potential source of future volatility is emerging in France, where the government's proposed budget cuts of nearly €44 billion face strong political opposition that could challenge its stability next month.
Note: As of 5 pm EDT 19 August 2025
Global Macro Updates
S&P affirms US credit rating. S&P Global maintained its 'AA+/A-1+' credit rating on US sovereign debt, concluding that the country's economic resilience and credible monetary policy remain intact. The agency's primary justification is its forecast that robust income from new tariffs will offset the fiscal impact of the administration's recent tax cuts and spending legislation.
The affirmation from S&P is notable as it follows a downgrade from competitor Moody's in May, which cited escalating government debt and deficits. S&P addressed these same concerns, but arrived at a different conclusion. While acknowledging that net government debt is likely to approach 100% of GDP, S&P projects the budget deficit will stabilise, averaging 6% of GDP through 2028. Analysts at the agency stated that while the fiscal balance ‘won’t meaningfully improve, we don’t project a persistent deterioration.’
S&P's revenue projections are supported by a nearly $50 billion surge in tariff income during Q2. This financial inflow is seen as a critical buffer against the expansionary fiscal policy that raised the US debt ceiling to $41 trillion. The broader market remains cautious, with the 30-year U.S. Treasury yield rising to 4.936% amid expectations of increased government borrowing.
Despite the current budget deficit standing at 6.2% of GDP, S&P expressed confidence that the US economy can withstand the policy shifts. The agency expects that politically contentious issues, such as the debt ceiling, ‘will continue to be resolved in a timely fashion’ due to the severe economic and financial consequences of a failure to do so.
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