End of Record-Breaking Closings Shakes Financial Climate
The prevailing financial climate witnessed turbulent shifts as the trend of consecutive record-breaking closings on major averages recently came to an end. Market participants have been closely following the commentary by Federal Reserve Chair, Jerome Powell. In a recent statement, he underscored the rather complex setting with increasing inflationary pressures.
Expanding on his observations regarding the stock market, Powell remarked that according to various parameters, it appears that stock prices have been largely overpriced. Providing a macroeconomic perspective, the Organisation for Economic Co-operation and Development (OECD) pointed out that the Federal Reserve could proceed with up to three subsequent rate cuts. The OECD has projected that the growth pace of the U.S. might decelerate, extending from 2025 towards 2026.
Turning towards commodities, gold, often regarded as a reliable asset during unstable times, continues its surge, setting new record highs. The yellow metal’s value exceeded the mark of $3,800. Additionally, oil prices showed signs of recovery following recent drops, rising sharply prior to the anticipated release of API crude numbers at the market’s close.
In the realm of stock news, Kenvue (KVUE) drew considerable attention in light of The Wall Street Journal’s disclosure. It was reported that President Trump placing the blame for potential autism in children with pregnant mothers’ Tylenol use, was a suggestion currently unsupported by scientific proof, despite it receiving the endorsement of his presidential authority. This move contradicted the advice given by his scientific consultants.
In diplomatic news, a delegation of U.S. lawmakers embarked on a visit to Beijing with the aim of promoting a deal between Boeing (BA) and China. Sinclair (SBGI) and Nexstar (NXST), irrespective of ABC’s (DIS) announcement of the comeback of ‘Jimmy Kimmel Live!’ to the broadcast, decided to keep the show on hold.
Other significant developments include Sempra Energy’s (SRE) agreement to divest a 45% share in Sempra Infrastructure Partners. The stake was acquired by KKR’s (KKR) affiliations for a sum of $10B. AutoZone (AZO), the auto parts retailer, unveiled Q4 earnings which were below expectations, however, their revenues were in line with predictions.
Turning our attention to Wall Street calls, we see Melius and Wells Fargo promoting CoreWeave (CRWV) to a higher grade, using the spur in cloud computing needs as the rationale. In contrast, Lululemon (LULU) received a downgrade from Baird. Meanwhile, Johnson & Johnson (JNJ) saw its rating improved by Guggenheim, who cited post Stelara expiry growth as their motive.
Following this, Symbotic (SYM) received a downgrade to Sell status at UBS, and in light of a 160% price surge, Vistra (VST) also saw its status lowered to Hold at Jefferies.
In the world of web news, Disney’s (DIS) streaming subscription prices are set to climb. On the other hand, according to the Wall Street Journal, the Bank of Montreal (BMO) is in the initial stages of divesting some of its U.S. branches.
In industry news, Alcoa (AA) signaled that the levied tariffs on aluminum imports will not provoke them to ramp up investments in the U.S, despite curtailing their expansion plans in Canada. Concurrently, Tesla (TSLA) is on the lookout to recruit semiconductor experts to fuel progress on development and production of next-generation chipsets.
On the moving news front, Poet Technologies (POET) recorded elevated trading in New York following an initial production order for its optical engines. Moreover, following an awarding of a $245M contract spanning five years, United States Antimony (UAMY) saw uptick in gains.
On the downside, FireFly Aerospace’s (FLY) shares took a hit subsequent to the release of Q2 results and the declaration of predictions for FY25. Portillo’s (PTLO) also traded lower following the announcement of the departure of its CEO, Michael Osanloo.
On the earnings and guidance front, American healthcare company McKesson (MCK) upgraded its outlook for fiscal year FY26 and suggested a more optimistic long-term adjusted EPS picture. In addition to this, InMed Pharmaceuticals (INM) announced results for FY25, reporting both EPS and revenue that were higher on a year-over-year basis.
Guardforce AI (GFAI) also announced its half-yearly results, with its CEO, Lei Wang, stating that significant advancements were made implementing their AI-first strategy. However, Genius Group (GNS) revealed half-yearly results that showed both EPS and revenue to be lower year-on-year.
In a similar vein, Trident Digital’s (TDTH) half-yearly results showed a year-on-year decrease in both EPS and revenue.
To end with a snapshot of the key indexes: The Dow retreated by 88.76 points, or a 0.19% decrease, ending at 46,292.78. The Nasdaq shed 215.50 points, or a 0.95% slump, finishing at 22,573.47. Finally, the S&P 500 saw a decline of 36.83 points, or a 0.55% drop, to close at 6,656.92.