August 20th, 2025
Stocks Open Lower as Retail Earnings Take Center Stage
U.S. equities slipped in early Wednesday trading as investors digested a fresh round of retail earnings, offering insight into the health of the consumer. Consumer staples and real estate stocks are leading the market higher, while technology and communication services lag.
The Dow Jones Industrial Average (^DJI) was down about 0.1%, while the S&P 500 (^GSPC) slipped 0.5%. The tech-heavy Nasdaq Composite (^IXIC) led the losses, declining about 1%. After a nearly 10% drop on Tuesday, Palantir (PLTR) fell another 3% in afternoon trade. Meanwhile, AI chip leaders Nvidia (NVDA) and Broadcom (AVGO) each fell around 2%.
Overseas, Asian markets ended mostly higher after China’s central bank kept its one-year loan prime rate unchanged at 3.0%, in line with expectations. European equities are also advancing, with euro area harmonized CPI inflation steady at 2.0% in July—matching the European Central Bank’s target.
Target and Lowe’s reported second-quarter results this morning that topped Wall Street estimates, with both earnings and sales beating expectations—evidence that consumer demand remains resilient despite labor market headwinds. Attention now shifts to Walmart, which reports Thursday.
Economic Takeaways:
- Treasury yields are moving lower, with the 10-year yield at 4.30%.
- The U.S. dollar is weakening against major currencies, and WTI crude is gaining after U.S. crude stockpiles fell, according to API data.
- Corporate earnings season has been strong overall: 94% of S&P 500 companies have reported, with 82% exceeding estimates and delivering an average earnings surprise of 8.2%. Looking ahead, earnings growth is projected to moderate but remain solid, with S&P 500 companies expected to post 10.3% growth in 2025, bolstered by a strong 12.8% increase in Q1.
- Gold advanced as traders weigh the outlook for US monetary policy ahead of a key speech by Federal Reserve Chair Jerome Powell later this week.
Trump Demands Fed Governor Lisa Cook Resign
President Trump on Wednesday called for Federal Reserve Governor Lisa Cook to resign, escalating political pressure on the central bank. In a Truth Social post, Trump linked to a Bloomberg report citing a letter from FHFA head Bill Pulte that accused Cook of falsifying mortgage documents. The Wall Street Journal later reported Trump is weighing whether to try to fire her.
The push comes as Trump reshapes the Fed’s leadership. Last week he nominated Stephen Miran to replace Adriana Kugler, who resigned August 8. If Cook steps down, Trump could name another governor while also weighing replacements for Chair Jerome Powell, whose term ends in May 2026.
Trump has repeatedly attacked Powell, urging faster rate cuts and criticizing the Fed’s $2.5 billion headquarters renovation. The debate over Fed independence is likely to intensify ahead of Powell’s keynote speech at the Jackson Hole symposium on Friday.
Tech Stocks Slide, but Analysts See a Short-Lived Pullback
Tech stocks dragged down the Nasdaq (-1%) and S&P 500 (-0.4%) on Wednesday, with Amazon, Apple, and Nvidia among the weakest performers as all “Magnificent Seven” names slipped. The Dow held steady, supported by retail and defensive gains.
Investors remain cautious ahead of Fed Chair Jerome Powell’s speech Friday, Trump administration policy uncertainty, and concerns about AI spending returns.
Still, Wall Street analysts see the sell-off as temporary. UBS advised against going overly defensive, highlighting long-term AI growth across infrastructure, semiconductors, and applications. Wedbush called the pullback a buying opportunity, pointing to Nvidia’s earnings next week as a potential catalyst, and said they expect the tech bull cycle to run another 2–3 years given massive AI investment.
Sanders Backs Trump’s Push for Government Stakes in Chipmakers
Sen. Bernie Sanders on Wednesday endorsed President Trump’s plan to convert federal subsidies for chipmakers into government equity stakes, including $10.9 billion earmarked for Intel under the 2022 Chips and Science Act. Sanders argued taxpayers “have a right to a reasonable return” if companies profit from federal support.
Commerce Secretary Howard Lutnick is reviewing whether grants to Intel and others should come with ownership stakes, as the Trump administration seeks “equity for investments.” The move echoes earlier deals where Washington secured revenue shares from Nvidia and AMD sales to China and took a golden share in U.S. Steel’s sale to Nippon Steel.
Sanders and Sen. Elizabeth Warren had pushed for similar measures when the Chips Act passed, opposing “corporate welfare” without returns. Much of the $39 billion in subsidies for firms such as Intel, Micron, TSMC, and Samsung has yet to be disbursed.
On the Move
- Palantir stock (PLTR) looks like it may extend its losing streak to six trading days after reaching an all-time high.
- Lowe’s (LOW) jumped 3% after topping EPS estimates and roughly matching revenue forecasts. The company raised full-year guidance, reported stronger same-store sales, and announced the acquisition of Foundation Building Materials to further its push into the professional renovation market.
- Target (TGT) sank nearly 10% despite beating on both EPS and revenue and reaffirming guidance. Weakness was attributed in part to the announcement that COO Michael Fiddelke will succeed CEO Brian Cornell next year—some investors had hoped for an external leader. Sales also fell from a year ago, and expectations heading into earnings were already low.
- Technology stocks broadly retreated, with Marvell Technology (MRVL) down 6%, AppLovin (APP) off nearly 6%, Super Micro Computer (SMCI) sliding 5.7%, and AMD (AMD) dropping 5.4%. Palantir (PLTR) extended its losing streak to five sessions, falling another 3% this morning. Analysts noted that while not yet a trend, the pullback may reflect investors rotating into other areas of the market.
- Crypto-linked names slumped as bitcoin dropped 2.7% to its weakest level since July 10. MicroStrategy (MSTR), Coinbase (COIN), and Circle Internet Group (CRCL) each fell more than 5%. The weakness followed concerns the Fed may keep policy tighter for longer. Bitcoin, however, edged up 0.6% in early Wednesday trading.
- Estee Lauder (EL) tumbled 9% after missing earnings expectations and issuing weak guidance.
- La-Z-Boy (LZB) collapsed 21.5% before the open on disappointing results and outlook.
- Analog Devices (ADI) gained 3.5% on an earnings beat.
- Snowflake (SNOW) rose 2.4% after Bank of America upgraded the stock to Buy from Neutral, citing strong momentum ahead of next week’s earnings report.
- TJX (TJX) climbed 3.8% on solid quarterly results and an upbeat fiscal 2026 outlook for earnings and same-store sales.
- Toll Brothers (TOL) slipped 1.6% despite reporting strong earnings and home sales, as delivery guidance underwhelmed investors.
- Hertz (HTZ) announced on Wednesday that it has partnered with Amazon Autos (AMZN) to sell a portion of its used car inventory through the online platform. The move is designed to simplify the process for customers looking to purchase vehicles from Hertz’s fleet.
- Baidu (BIDU) saw its shares slip 0.2% as second-quarter revenue declined. While its cloud services showed strong growth, weakness in the core advertising business offset the gains
What’s Ahead
Minutes from last month’s (FOMC) meeting could be especially interesting at 2 p.m. ET today considering the Fed saw two dissents on its decision to hold rates steady.
On Thursday, investors will also get preliminary readings on U.S. business activity. The S&P Flash Services PMI is expected to ease to 54.0 from 55.7 in July, while Manufacturing PMI is forecast to improve to 50.6 from 49.8.
A mixed outcome would be consistent with recent trends: services remaining firmly in expansion and manufacturing gradually recovering from earlier contraction.
Walmart also reports tomorrow.
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