Will Euro and U.S. Futures Continue to Send Mixed Signals as Markets Brace for Key Data and Central Bank Comments?
Table of Contents
Where Are Markets Today?
US and European stock futures are sending divergent signals as the market awaits major economic indicators as well as quarterly earnings reports. Euro Stoxx 50 futures are down by 0.65% as investors are on edge before release of major upcoming economic indicators. US futures are sending a weak signal too. S&P 500 futures are down by 0.33%, Nasdaq futures down by 0.54%, and Dow Jones futures down by 0.23% as investors are on edge. The action is flashing market players set to expect volatility ahead as they wait for new data to give market direction.
Another prime cause behind such a risk-averse market prediction is increased anxiety about tech stocks performance. Back home in America, tech stocks experienced massive drops with most of the leading players experiencing overvaluations. The government considering plans to invest by taking equities in chip players such as Nvidia and Intel only fuelled fear more, especially as this might be a second move towards increased regulation or intervention within the industry. This left investors more risk-averse and this manifests poorly on futures performance. Furthermore, investors are considering the Federal Reserve’s meeting minutes during its July meeting later this week, released today. The minutes have the ability to give key leading direction on what central bankers are considering regarding interest rates and monetary policy. Furthermore, much attention is focused on what Federal Reserve Chairman Jerome Powell will say during the Jackson Hole symposium later this week. News or information on prospective rate reductions or increases will be monitored closely by financial markets because they can have a direct effect on market direction and sentiment, especially within equities and fixed income markets.
Lastly, geopolitical tension and if they will or won’t affect world markets are contributing to the mixed mood as well. And although fear for economic growth as a damper on investment sentiment within Europe remains international tensions with Russia and looming Ukraine negotiations are another source of risk on offer. So far investors are taking their time and lean positions to wait for key economic indicators. The sum total of issues imminent with regulators, central bank intervention, and issues with geopolitics are all helping to provide a more subdued tone out there as most investors are sitting this one out to wait for more conclusive cues.
Major Index Performance on Wednesday, August 20, 2025
S&P 500: 6,411.37, a decrease of 0.59%.
Nasdaq Composite: At 21,314.95, down 1.46%.
Dow Jones Industrial Average: At 41,182.34, up 0.2%.
Russell 2000: At 2,320.54, down 0.66%.
The Great Seven and S&P 500
The Apple, Microsoft, Nvidia, Amazon, Meta, Alphabet, and Tesla “Magnificent Seven” are again weak. The group is already experiencing an average 18% drawdown as Meta and Tesla bear the bulk of the loss. The laggard stocks behind market growth are experiencing valuation rebalancing, which may take away some market momentum in the aggregate.
Drivers Behind the Market Move – Wednesday, August 20, 2025
U.S. and European markets are gearing up to experience a turbulent climate from recent economic figures, political trends, and market sentiment. Through early trading today, European futures are lower with Euro Stoxx 50 futures decreasing 0.65%, noting investors being cautious in anticipation of fresh economic figures. At Wall Street, futures also mirror the same muted outlook with S&P 500 futures decreasing 0.33%, Nasdaq futures decreasing 0.54%, and Dow Jones futures decreasing 0.23%, showing investors being cautious. These mirror market players positioning for possible volatility as market players look forward to fresh figures that can reverse market direction.
1. Federal Reserve Expectation July Meeting Minutes
Market traders are eagerly waiting for today’s release of minutes from last week’s meeting of the Federal Reserve. The minutes could give key insights to central bank thinking on interest rates as well as its next monetary policy move. Policymakers last week followed up with not cutting rates but rates voted down by Fed Governor Christopher Waller and Michelle Bowman to cast their first joint vote against rates by two Fed voters since 1993. The vote kindled speculation about rate cuts by the Fed at its next meeting in September as Fed funds futures are pricing virtually an 85% chance of a 25-basis-point reduction of rates next at its September meeting.
2. Geopolitical Risks and Oil Market Responses
Geopolitical developments are also shaping investing decisions. There was recently comment by U.S. President Donald Trump hoping Russian President Vladimir Putin is prepared to bring an end to war in Ukraine, which could indicate Putin is tired of seeing war persist. Trump did indicate, though, that perhaps there is a chance that Putin is not prepared to shape a peace agreement, questioning what next. The comment came on the heels of a day where Trump received Ukrainian President Volodymyr Zelenskyy and EU leaders to the White House to discuss peace negotiations. While there have been discussions on those kinds of levels beforehand, peace is hardly guaranteed with Russia not committing to taking part in direct negotiations. The resulting geopolitical uncertainty caused price action within oil with Brent crude climbing by 0.21% to a price of $65.93 per barrel as supply worries come back into play with peace negotiations being scaled back.
3. Combined Earnings Reports and Retailing Sector Performance
Retailers’ third-quarter earnings statements are to blame for the bewildering market mood. S&P 500 and Nasdaq dropped by about 0.6% and 1.5%, respectively, on a risk-off day, though the Dow was able to record a razor-thin increase on the back of a post-earnings bounce at Home Depot. Investors are eagerly awaiting reports from other significant retailers like Lowe’s Companies and Target Corporation to assess the health of the consumption sector. Those reports are likely to give signals to consumption behaviors and overall economic condition which will have an impact on investor sentiment as well as market directions.
Markets are navigating their way through a difficult maze of central bank activity, political events and corporate earnings. The investors have to stay informed and ready to respond to market action as they evolve.
Digesting Economic Data
The TRUMP Tweets and Their Implications
The last statement by President Trump once put market attention back into focus, particularly under current geopolitics and economics. The White House statement that Presidents Putin and Zelenskyy are open to meeting together evoked hopes and worries amongst investors. As true as this equates to de-escalation of conflict between Russia and Ukraine might sound, Trump himself saying he doesn’t think he can make Putin stop bombing Ukrainian civilians reveals the frailty of any peace initiative. Investors are left to contend with conflicting signals, and absence of tangible follow-throughs from such diplomatic meetings injects an element of doubt into market sentiment.
-Trump’s oratory has also centered on United States engagement in foreign war. The commitment that “U.S. boots will not be on the ground” during the Russia-Ukraine war and encouragement of direct Russia-Ukraine diplomacy are signs that his aim is to pursue diplomatic solution to conflict, rather than war-based solution. This kind of foreign policy approach, if successfully implemented, could eliminate a few threats on a geopolitical level and reduce fear of escalatory action. Market players are hesitant, though, as tension on a geopolitical level often is not a foreseeable outcome, especially with a track record of intense rhetoric regarding foreign relations. Fueling market jitters are further Trump’s denials of Russian cyber-hacking of U.S. federal courts as another factor in the multi-dimensional set of risks to investors. His “are you surprised?” remark fits his apparent lack of dedication to being angry at cybersecurity threats and may instill fear in the tech industry and fear of national security threats. Such remarks may cause gyrations in tech and cybersecurity stocks that are under regulatory scrutiny and heightened threats by foreign actors to their security infrastructure.
Finally, Trump’s petitioning Congressional action for crime legislation, for instance an expansion of D.C. police powers, and his general preoccupation with domestic American policy issues, for instance his advocacy for selected high-profile recognitions, reveals his persistent attempts to concentrate political powers and draw attention to the home front. It might have investor confidence implications because whatever possible legislative gridlock or unexpected policy changes might bring about yet another element of unpredictability to marketplaces, especially to those on public protection issues and infrastructure.
Overall, President Trump’s recent comments and tweets are making the market sentiment volatile. Although his foreign policy and domestic U.S. policy focus can provide stability to certain sectors, lack of clarity in foreign policy statements, information security risks, and the overall political environment are generating caution. The investing managers are cautioned to be careful for those developments as they occur since Trump’s remarks are driving domestic financial as well as geopolitics conditions.
Understanding Market Directions
The recent downward move of Atlanta Fed’s GDPNow projection for Q3 2025 from 2.5% to 2.3% is a reflection of difficulties in predicting economic growth. The downward revision followed a decline in third-quarter real residential investment growth nowcast from 1.1% to -5.9% following the release of housing starts data. Blue Chip consensus remains at around 2.1% as well, which is a reflection of disagreement between Fed’s quantitative approach and professional surveys. GDPNow historically carries a root-mean-squared error rate of 1.17 percentage points as a reflection that though it gives timely data, this data might not be accurate.
This revision of GDP projections comes on a day of increased doubt regarding U.S. data accuracy. Indeed, a data rewrite to 2024 of the employment data of the Bureau of Labor Statistics and its top staffer resigning amid controversy have seen doubts regarding data accuracy swell. They may influence GDP expectations as market watchers reset their own expectations to account for potential data improprieties.
In counterpoint to this uncertainty, investors will need to keep an eye on leading macroeconomic indicators like employment levels and retail figures. Companies with underlying quality with an interest in future-growth themes like technology and infrastructure will offer buying opportunities. How this macroeconomic situation evolves and if it is going to have any impact on earnings estimates in upcoming quarters will need to be monitored by analysts. The equities future will be decided by companies’ ability to adapt to a more-globalizing world.
Housing Market Indicators Mixed Recovery
US private residential building starting in July 2025 increased unexpectedly by 5.2% on a month-to-month basis compared to a fall of 1.8% that was expected. The increases were driven mainly by a big 11.6% increase in multifamily housing starts, a level that was last reported in May 2023. Single-family starts also increased with a rise of 2.8%, a more general increase in building activity. The recovery is nevertheless cancelled out by a 2.8% fall in permits that is in its lowest point over a five-year period and could indicate future building slowdowns.
Earlier beginning on housing starts have functioned as an economic cycle leading indicator and directly tracked total economic activity. The July surprise spike can be interpreted as pent-up demand for last year’s high rates during 2024. The National Association of Home Builders pointed out, within their 2023 report, the simultaneous correlation between indexes of consumer confidence, mortgage rates, and housing starts with the inference that favorable lending conditions by themselves would cause building activity to expand. The disconnect of rising starts of houses with decreasing building permits raises a question as to whether this recovery is sustainable.
Investors need to look at leading indicators like mortgage rates, builder sentiment, and regional building to assess health in the housing market. Businesses affected by housing, like homebuilders and building supply manufacturers, will be volatile with this economic data. Future quarter projections and values will be influenced by these as they are assessed by analysts.
ETF Flows as Proxies of Investor Attitudes during Economic Transitions
In July 2025, U.S. exchange-traded funds (ETFs) saw huge inflows as investors opted to put their money in stability during short-term economic doubt. Equity ETFs received about $74.5 billion, which was the largest monthly inflow during the period. Vanguard S&P 500 ETF (VOO) led with inflows of $12.5 billion as a reflection of investors’ high confidence in large U.S. equities. This is in line with Journal of Financial Economics study findings that large-cap equities perform well during late-cycle economic stages. Consumer cyclical ETFs saw a tiny outflow of about $0.48 billion as a probable reflection of lowered confidence in discretionary spending-related equities.
Invest-grade bond ETFs were also popular, gathering around $11.6 billion up to the July 30-August 6, 2025, interval, a record weekly inflow since the end of 2020. The inflows reflect investors remain optimistic about high-grade corporate debt amid signs of slowing U.S. economic growth as well as fresh introductions of protectionist restrictions. Additional market momentum came from fresh Japan, UK, and EU trade agreements that reduced concern about wider trade war. Declining borrowing costs and healthy corporate fundamentals also fuelled optimism further to drive credit spreads to near-historic lows. These trends indicate investors are taking on a “barbelling” strategy by mixing equity growth with fixed-income security. Those businesses that have strong fundamentals and coverage of those sectors that are going to expand, like technology and infrastructure, could offer investment opportunities. Fund managers will have to make decisions regarding whether those macroeconomic trends are going to persist and what effect they are going to have on assumptions about earnings within the next quarter or two. The future for equities and fixed income will hinge on what companies are able to do to adapt to a fast-altering world.
Service Sector Price Expectations Show Deflationary Orientation
August 2025 New York Fed Business Leaders Survey presents remarkable decline in service-oriented firms’ expectations regarding future received prices which fell from a high of above 40 in 2022 to near zero. The remarkable decline is observed to indicate a probable macroeconomic shift such that inflationary pressures are replaced by those of deflationary pressures as well as increased doubt regarding the global economy. The trend is rationalized as firms and especially those focusing on services predicting slowing price momentum due to slowing demand as well as possible excess capacity among specific sectors during the period.
The sharp drop in price expectations is consistent with a 2024 National Bureau of Economic Research paper study that concluded price expectations in the service sector are highly responsive to supply chain disruptions and changes in monetary policy. The inflation peak during the last cycle phase caused by supply chain tightening and acceleration of demand was followed by the rapid interest rate increases of the U.S. Federal Reserve. As the Fed proceeds to tighten monetary policy to combat inflation, subsequent slowdown in demand and reversal of previous supply chain disruptions have more than likely created the deflation signal being experienced by the service sector. The abrupt decline in price expectations for the service industry is a test of the overall consensus of ongoing inflation that has characterized much of the post-pandemic period of recovery. The decline is reason for alarm that stagflation, or a state of inflation and slowing economic growth, is beginning to gain traction. If economic growth starts to slow but inflation pressure is still in check, entrepreneurs and officials can be at a loss. Also, the rationale for this chart is aided by other economic ills at large, including lingering impacts of Trump-era tariffs that have led to slower rates of expansion and increased costs of production. As this turnaround to deflation occurs, analysts will need to pay close attention to shifting dynamics in the service-based industry and broad-based economic indicators in order to gauge the possibility of stagflation or a slowdown in economic growth over a few months.
Resilience of Housing Markets under Economic Pressure
Even with a slight decline in National Association of Home Builders (NAHB) Market Index from 33 in July to 32 in August 2025, future home sales and prospective buyer traffic continued to be robust. The resilience is a signal that residential market performance is showing resilience regardless of other economic woes. NAHB past data are evidence of high correlation between such a signal and economic cycles of recovery such that even as current conditions signal trouble, foundations upon which future recovery shall be undertaken are laid. The persistent buyer traffic remains a signal of underlying demand upon which future industry performance may be sustained regardless of challenges.
This housing market stability is distinct from pressures in the overall economy, as inflationary pressure gains of during June 2025. The increased inflation resulted in the Federal Reserve keeping high interest rates in place, which can discourage some buyers by the increase in mortgage rates. Despite the increased rise experienced in potential buyers, consumer confidence is gradually shifting as more consumers are willing to enter the marketplace in spite of high costs. The transition is also backed by data from a 2023 Federal study that linked forecasts of low rates to home demand spikes. It indicates that consumers may look forward to future interest rate decreases as a reason for increased optimism in home purchasing. In the forthcoming period, Norada Real Estate 2025 residential market performance forecast is a 6% recovery of pre-owned homes sales with most of the recovery to be a result of projected decreases in mortgage rates. The prediction breaks market belief of a stagnant residential market by attributing a primary recovery to stabilize interest rates level. It is within peer-reviewed economics frameworks which postulate that a steady recovery of residential market performance is possible following inflationary pressure peaks as stabilization of interest rates creates much of market performance momentum.
Divergence of Price and Wage Expectations Implies Inflationary Pressure
The August 2025 New York Fed Business Leaders Survey shows a large price versus wage growth gap among businesses with a services emphasis. Businesses foresee a 4.3% price received rise with wage expectations lagging by 2.0%. The gap suggests inflationary pressure is building prior to changes to cost of labor and could result in margin compression if businesses are not able to pass on higher costs to consumers. The type of gap has caused economic slowdowns in the past as a portent of underlying economic distress.
Consistent with this line of thought, 2023 National Bureau of Economic Research conducted a study that established that businesses within sectors of services are susceptible to overestimation with respect to passing on price increments within economic turbulent periods. The overestimation invokes price setting below consumers’ demand levels thus spreading pressure on finances.
Today’s economics of increased input costs and frozen wages is similar to what existed previously before 2008 during the period of the financial crisis. Then too, similar types of mismatches between price and wage expectations were identified as causes of future economic distress. These investors need to watch those industry sectors with high labour expenses and poor pricing power since they are bound to face margin pressure. The ones with good pricing power and cost-saving measures are capable of standing on their own to absorb such economic shocks. The observers will have to consider how such forces impact firm profitability as well as overall macroeconomic durability for a few months.
This year U.S.-based biotechs with minimal or no top-line growth and debt-financed have increased by 7.2% this year compared to the S&P 500 Pharmaceutical Index this year. Speculative optimism could be behind this rally since statistics indicate that 60% of such biotech firms fail within a five-year period since they are economically non-viable. The latest rally in biotech shares that are gaining as well as those losing steam could be triggered by President Trump’s August 2025 threat to slap 250% tariff on pharmaceuticals to implement short-term supply chain reorganization by firms due to shortsightedness on their part.
The looming tariffs created a patchy market response. In general, biotech ETFs such as the iShares Nasdaq Biotechnology ETF (IBB) and SPDR Biotech ETF (XBI) rose, but individual biotechnology stocks in their benchmarks behaved unpredictably. While companies such as Arcutis Biotherapeutics and Tarsus Pharmaceuticals reported robust sales growth, others are still struggling with profitability. The discrepancy suggests investment speculation in this set of biotech, notably among those with poor fundamentals.
Analysts are warning that zombie biotech outperformance is not sustainable. It is all settled, according to a 2021 Journal of Financial Economics paper, that 75% of zombie firms underperform on a longer term with weak financials. There is a warning offered to investors to keep their guard up and look at firms with solid fundamentals and longer-range promise rather than getting distracted by short-term activity on price on policy-related news.
Service Shrinkage and Supply Chain Stresses
The August 2025 New York Federal Reserve Business Leaders Survey reports further retreats in service sector performance with its headline business activity index at -11.7 for its sixth straight monthly drop. This unrelenting drop is forcing expectations of economic weakness potentially proving more severe than implied by consensus GDP growth estimates. It is to be recalled that similar persistent negative series of service sector indices in the past have been succeeded by recession as a leading indicator and that similar recent estimates have reported retreats by other measures like the ISM Services PMI.
At the same time, the OECD mid-2025 Supply Chain Resilience Review sees unexpected disruptions of the supply chain around the world as caused by environmental and geopolitical shocks. Supply chain disruptions have increased lead times and reduced availability of supply with spreading impacts on services industry as well. Forceful reshoring will decrease world trade by more than 18% and world GDP by more than 5% without necessarily boosting resilience according to the OECD.
These patterns are opposite to a story of strong post-pandemic recovery and reflect weakness in service-based economies such as America. Concomitant decline in activity in the services sector along with supply chain pressure forebodes underlying stress in economics and questions whether or not this current expansion cycle is weaker than projections foretold. The consensus must be on high notice and monitoring key indicators and foreign supply chain health to best gauge momentum in economic expansion.
Upcoming Economic Events
Heading into another make-or-break week for the market, main economic indicators are scheduled this week which could shift investor sentiment and shape Fed thoughts on monetary policy. Like release of crucial inflation data, significant speeches from major Fed members, and minutes of previous month’s FOMC meeting, market players are eagerly awaiting reactions to a universe of unknowns. Here is a sneak peek on what to look out for, and what each data release could do to market action:
CPI y/y (Consumer Price Index)
Year-ago CPI reading of inflation is one of the primary indicators of price stability and purchasing power.
The higher-than-anticipated reported CPI will be positive for persistent inflationary pressures with forecasting anticipation of sustained Fed tightening. This should lend support to the U.S. currency as investors price a sharper rate-hike path.
The CPI below expectation might fuel expectations of decreasing inflationary pressures with forecasting anticipation of dovish Fed bias. The latter should inject positive risk-on sentiment to underpin equities at the cost of tempering bond yields as rate-cut hopes or slowing rises gather momentum.
ECB President Lagarde Speaks
Since Christine Lagarde became President of the European Central Bank, market participants pay close attention to her speeches as they do due to ECB wielding control over eurozone inflation that is gaining momentum.
If she issues a signal to move to become more hawkish—in that the ECB will keep tightening policy—the euro will strengthen and regional bond yields will also increase.
But any comment or suggestion on a dovish path with respect to concern over eurozone optimism to return to growth will prompt a weak euro and safe-haven government paper and bullion buying. The market will also look for future rate hike signals and what kind of balance between inflation and growth the ECB perceives going forward.
FOMC Member Waller Speaks
Comments by Federal Reserve Governor Christopher Waller will play a crucial role in shaping the mood of the market about future U.S. monetary policy.
If Waller talks about further tightening as long as inflation continues to be stubborn, the market might experience a pop higher in the U.S. dollar and a higher bond yield as investors absorb more rate hikes.
But if Waller is more dovish—so much so that he talks about inflation being in hand or growth easing—the market might respond by pushing stocks higher, reducing bond yields as rate-cut talk becomes front-and-center once again.
FOMC Meeting Minutes
Publication of the FOMC meeting minutes will give investors a clearer sense of what the central bank policymakers talked about at the previous monetary policy meeting.
If they show more concern on inflation, particularly with sticky price pressures in major sectors, the market can anticipate more aggressive tightening policy by the Fed that can suppress risk appetite.
But if the minutes show hints of concern on slowing in the economy or leaning towards a more neutral policy tilt, it might give a boost to equities, especially those growth sectors as investors price less aggressive Fed moves.
Stock Market Performance
Indexes Recover from Lows of April But Minor Breadth Reflects Continued Cautiousness
We at Zaye Capital Markets see U.S. equities recovering considerably from lows seen on April 8. Year-to-date experience is a mixed one with index-level drawdowns so far failing to reveal underlying softness beneath surface levels. Mainstream indexes are positive on momentum fronts although participation in broader markets is poor with volatility remaining entrenched within structure. What we monitor regarding recent performance in major indexes is this:
S&P 500: Strong Rebound with Fundamentally Weakened Foundation
YTD: +10 | +29 above April low | -19 below YTD high | Avg. member: -25
S&P 500 is 10% YTD higher and gained back 29% from its April low. However, a 19% drop from YTD high with 25% average member loss indicates again that this rally in the market continues to be driven by chosen leadership stocks. Ongoing poor market breadth overall continues to be a sign of weakness.
NASDAQ: Tech Resilience Hides Member Damage Underneath
YTD: +12 | +42 off Apr low | -24 from YTD high | Average member: -47
NASDAQ retains its leadership of the broader market by advancing 12% YTD as well as 42% from its low last April. But behind the scenes the index dropped by 24% from its YTD high with the average constituent dropping by 47%. The glaring disconnect reveals underlying weakness within what remains a tech-biased rally with many small techs suffering.
Russell 2000: Small Caps Don’t Join Technical Reversal
YTD: +3 | +30 above April low | -24 below YTD high | Avg. member: -38 The Russell 2000 increased 30% since last April but is just 3% positive to-date this year. This is a reflection of continued pressure on small companies and economically sensitive shares. Off highs by 24% with an average member fall of 38%, sentiment for small caps is still weak.
🏛 Dow Jones: Stability in Defensive Lean
YTD: +6 | +19 since Apr low | -16 below YTD high | Ave. member: -23 The Dow rose 6% YTD as a reflection of its defensive bias. The restricted 19% bounce back from bottoming during April and less steep 16% fall from YTD peak are signs of relatively better soundness. But aggregate participation is weak with just 23% average member loss.
We are positive on quality defense-oriented businesses at Zaye Capital Markets and are choosy as breadth and volatility are overriding headwinds.
The Strongest Sector in All These Indices
As of August 18, 2025, only the Communication Services sector remains in first place among all of the S&P 500 sectors with top YTD performance at 16.6%. It is followed by Information Technology at 15.6% and Industrials at 14.5%. They are the only three sectors with double-digit YTD gains.
Accounting for month-to-date performance, the leader is Health Care with a 4.2% gain—a remarkable rebound given that it was among the select groups with YTD losses of -1.4%. Consumer Staples and Consumer Discretionary also reported robust monthly advances of 2.9% and 3.0% respectively.
On the contrary, Energy (-1.1% YTD, -2.9% MTD) and Real Estate (0.3% YTD, -1.2% MTD) are the weakest sectors as they are plagued by persistent macro negatives such as inflation and interest rate issues.
Overall, Communication Services remains the best-performing sector to date through 2025 with resiliency as well as continued investor demand.
Earnings
Earnings Recap: August 19, 2025
Home Depot, Inc. (HD)
Home Depot reported Q2 FY2025 earnings of $4.6 billion, or $4.58 per diluted share, matching the previous quarter’s earnings but missing analyst expectations. Despite the earnings miss, the stock rose around 4%, with the company reaffirming its full-year guidance. The market reacted positively, seeing the results as indicative of resilience in Home Depot’s operations despite broader economic pressures.
Medtronic Plc (MDT)
Medtronic posted Q1 FY2026 earnings of $1.04 billion, or $1.26 per share, surpassing estimates. Revenue for the quarter rose 8.4% year-over-year, hitting $8.6 billion. The company raised its full-year earnings outlook to $5.60–$5.66 per share, reflecting optimism around its accelerating growth and operational improvements. Investors welcomed the higher guidance, pushing the stock higher after the announcement.
Keysight Technologies Inc. (KEYS)
Keysight reported Q3 FY2025 revenue of $1.35 billion, an 11% increase year-over-year. Non-GAAP EPS came in at $1.72, surpassing analyst expectations. The company also projected Q4 FY2025 revenue between $1.37 billion and $1.39 billion, with non-GAAP EPS ranging from $1.79 to $1.85. The strong results and upbeat guidance indicate that Keysight is well-positioned to continue its growth, particularly in its key sectors.
Viking Holdings Ltd. (VIK)
Viking posted Q2 2025 net income of $439 million, matching analyst expectations. Revenue for the quarter reached $1.88 billion, surpassing forecasts. The company also announced the addition of a fifth sister ship to its Nile fleet, signaling growth in its luxury travel business. The market responded positively to the strong earnings and expansion news, which helped boost Viking’s stock price.
Amer Sports, Inc. (AS)
Amer Sports reported Q2 FY2025 revenue of $1.24 billion, a 23% year-over-year increase. The company raised its full-year revenue, margin, and EPS guidance, driven by strong performances from its key brands, including Arc’teryx and Salomon. Investors reacted favorably, pushing the stock up as the company demonstrated its ability to capitalize on strong demand for its sporting goods and apparel offerings.
Opera Limited (OPRA)
Opera reported Q2 2025 revenue of $142.96 million, a 30% increase compared to the previous year. Adjusted EPS came in at $0.17, slightly below the previous year’s $0.22. The company raised its full-year revenue guidance to between $585 million and $597 million, signaling continued growth. Despite the slight dip in EPS, the raised guidance helped bolster investor confidence, leading to a positive market response.
Earnings Preview: August 20, 2025
The TJX Companies, Inc. (TJX)
TJX is set to release its Q2 FY2026 earnings today. Investors will be looking for insights into the company’s performance in the off-price retail sector, with a focus on same-store sales growth, inventory management, and the impact of shifting consumer behaviors in the face of inflation. Given the volatility in the retail sector, TJX’s results will be closely scrutinized to gauge the strength of consumer spending trends.
Lowe’s Companies, Inc. (LOW)
Lowe’s will report its Q2 2025 earnings today, with a focus on key metrics such as same-store sales and gross margin trends. Investors will also be monitoring the company’s outlook on the home improvement market, especially amid macroeconomic headwinds. With consumer sentiment fluctuating, Lowe’s ability to manage its supply chain and maintain profitability will be key points to watch in today’s earnings report.
Analog Devices, Inc. (ADI)
Analog Devices is scheduled to report its Q2 FY2025 earnings today. Analysts will be watching for revenue growth in the semiconductor industry, particularly in sectors like automotive and industrial applications. Any updates on supply chain dynamics and how Analog Devices is managing these challenges will also be of great interest to investors. The company’s earnings could provide insights into the broader health of the tech sector.
Target Corporation (TGT)
Target is due to webcast its Q2 2025 earnings conference call today. Investors will be paying close attention to same-store sales performance, particularly in the context of its e-commerce growth. With inflationary pressures and supply chain challenges continuing, Target’s strategies to manage these issues and maintain consumer loyalty will be key takeaways for the market. Investors will also be watching how the company adapts to shifting consumer behaviors as the retail landscape continues to evolve.
Stock Market Summary – Wednesday, August 20, 2025
US equities are having a patchy day with the Nasdaq Composite heading the decline as technology shares are under pressure once more. The S&P 500 slumps as fear about more market volatility impacts the index, though the Dow Jones Industrial Average holds firm. As market sentiment remains volatile, particularly with growth shares, market focus remains on economic data and political news that might provide direction next.
Stock Prices
Economic Indicators and Geopolitical Events
Market is protected and guided by a number of factors. Uncertainty regarding economic information such as inflation rates and employment levels as well as ongoing geopolitical threats are encouraging investors. Sorting out weakness among techs is pulling big indexes sharply lower and investor caution will be the story until improved signs are seen.
Stock News Updates: Tough Day for Growth Investors
These declined sharply on the day with leadership by large losses among a number of high-profile issues. Among largest decliners of the universe of growth shares are:
$VKTX: Down 43%, Reflecting Investor Concerns regarding Recent Biotechnology Industry Activity.
$BMNR: Down 11%, as sentiment turned against its recent momentum.
$ONDS: Down 10%, after disappointing product development announcement.
SOUN: Down 9%, as investor interest falls amid rising competitive pressures.
$PLTR: Fell 8%, echoing wider worries about tech valuations.
Additionally, stocks like $RKLB, $RGTI, $APLD, and $PGY declined by 7-8%, which again indicates the dismal day for growth investors. The overall performance of such stocks indicates ongoing volatility and indecision in the growth group.
The Great Seven and S&P 500
The Apple, Microsoft, Nvidia, Amazon, Meta, Alphabet, and Tesla “Magnificent Seven” are again weak. The group is already experiencing an average 18% drawdown as Meta and Tesla bear the bulk of the loss. The laggard stocks behind market growth are experiencing valuation rebalancing, which may take away some market momentum in the aggregate.
Major Index Performance on Wednesday, August 20, 2025
S&P 500: 6,411.37, a decrease of 0.59%.
Nasdaq Composite: At 21,314.95, down 1.46%.
Dow Jones Industrial Average: At 41,182.34, up 0.2%.
Russell 2000: At 2,320.54, down 0.66%.
At Zaye Capital Markets, we are nonetheless closely monitoring performance within the sector of growth stocks as well as closely observing market conditions especially within the technology segment.
Gold Price – Wednesday, August 20, 2025
On August 20, 2025, gold is at around $3,316 per ounce, a slim 0.03% decline from yesterday. The slight decline notwithstanding, gold remains a strong performer with remarkable year-to-date returns of 28% to outpace other large assets such as stocks and bonds. Gold’s rally has been underpinned by ongoing macroeconomic issues as well as growing geopolitical tension as well as ongoing central bank and exchange-traded fund (ETF) demand for the precious metal. Traders and market observers are closely following upcoming economic data releases with special attention to be given to the Consumer Price Index (CPI) later this week to give us more details on inflation as well as on the overall macroeconomic situation.
Market sentiment is cautious as a number of factors are in play, including President Trump’s comment on whether he will be holding a summit with Russian President Putin and the prospect of direct diplomacy between Russia and Ukraine. While this may be a sign that there may be a reduction in geopolitical tension, market players remain wary of what may be potential risks. In addition, the release today of Fed members’ speeches and FOMC minutes could give valuable information on what the Fed is considering in terms of monetary policy. These are served alongside inflation figures that will have its say on gold as a safe-haven asset, especially in times of uncertainty. Considering all this, gold as a store of value against economic uncertainty has high demand, and investors are watching all this closely to see where the metal is going in the next phase of time.
Oil Prices – Wednesday, August 20, 2025
Currently, oil prices have risen moderately with West Texas Intermediate (WTI) crude at $62.72 per barrel, 0.59% higher from the previous trading session. Prices are underpinned by ongoing geopolitical tensions and hope of increasing demand, but concerns of a supply surplus and sluggish demand growth are there. The International Energy Agency (IEA) reduced its estimate of international oil demand growth in 2025 after poor consumption in the large economies. Still, OPEC+ producers are slowly easing output cuts, and the market fears a subsequent market glut. Despite supply pressure, the market remains cautious as investors are watchful and waiting for any shift in international demand and supply balance.
Presidential negotiations by President Trump with Russian President Putin and Ukrainian President Zelensky have been among market uncertainties regarding oil. Although presidential negotiations are signs of possible downside relief from tension caused by geopolitics, little short-term relief is derived from policy measures or sanctions that affect oil price costs. Moreover, Trump administration measures to stimulate faster U.S. domestic oil production, particularly by drilling on U.S. federal lands, can provide fuel for supply-side pressures. Future releases of economics by miles such as CPI data as much as those by Federal officials on what they are contemplating for monetary policy will prove important to judge impacts by inflation as well as monetary policy and could influence oil price pricing on a forward basis. The market looks for such indicators to better understand near-term oil market direction.
Bitcoin Prices – Wednesday, August 20, 2025
Bitcoin (BTC) is trading around $113,388 right now, falling by 2.24% from the previous close. The price of the cryptocurrency touched a record high of $115,994 and a record low of $112,647 witnessed during market consolidation following a high of $124,474 this month. The price move is suggestive of a short correction that could be triggered by an accumulation of macroeconomic issues like recent inflation prints and monetary policy commentaries by the Federal Reserve and more universal geopolitical issues. As market conditions for Bitcoin come back to normal, market sentiment remains guarded against persistent uncertainties like shifting inflation expectations as well as a volatile global geopolitical situation.
More recent diplomatic breakthroughs by President Trump, specifically with Russian President Putin and Ukrainian President Zelensky, only served to add to financial market confusion, including Bitcoin. Although such negotiations could offer ways to a prospective reduction in tensions, there were no signs of near-term policy shifts that have kept investors on the sidelines. Furthermore, the government bid by the United States to accelerate an increase in oil production could affect inflation expectations and therefore affect Bitcoin as a store of value amid episodes of economic hardship. The next series of economic indicators such as the CPI and Fed speak by officials will come under intense scrutiny with any shift in inflation patterns or monetary policy potentially affecting Bitcoin price action to an even larger extent within days ahead.
ETH Prices – Wednesday, August 20, 2025
Ethereum (ETH) is at $4,139.04, down by 3.5% from the last close. The price has ranged between $4,322.62 and $4,072.70 after the rally in the beginning of the month after ETH surged above $4,600 on the back of widespread institutional buying and prospective adoption of in-kind creation and redemption protocols of Ethereum exchange-traded products (ETPs). Recent action, however, triggered heightened volatility after a week of outflow witnessed on Monday at a whopping $197 million as spot Ether ETFs witnessed their second-largest single-day redemption since inception. The outflow pattern is indicative of a reversal by the investors perhaps due to profit taking or fear of market weakness. Also, unstaking queue for Ethereum set a record high at 910,000 ETH, equivalent to increasing selling pressure as witnessed with unstaking of tokens by validators.
When considering whale action, large-scale transactions continue to make waves. On Aug. 18, a large Ethereum whale moved $137 million of ETH, creating market volatility and liquidity shift issues. This follows a report of three new whale addresses purchasing $279.5 million of ETH in 24 hours, which is an indication of strong institutional buying into Ethereum. Although volatility in the near term is coming, Ethereum’s market capitalization is robust and the network remains at the forefront of decentralized finance (DeFi) and Web3 applications. These are signs that while near-term volatility is coming, Ethereum’s long-term future is supported by ongoing institutional buying and deep whale action.
Disclaimer
Past results are not indicative of future returns. ZayeCapitalMarketss and all individuals affiliated with this site assume no responsibilities for your trading and investment results. The indicators, strategies, columns, articles and all other features are for educational purposes only and should not be construed as investment advice. Information for stock observations are obtained from sources believed to be reliable, but we do not warrant its completeness or accuracy, or warrant any results from the use of the information. Your use of the stock observations is entirely at your own risk and it is your sole responsibility to evaluate the accuracy, completeness and usefulness of the information. You must assess the risk of any trade with your broker and make your own independent decisions regarding any securities mentioned herein.
Naeem Aslam
Naeem Aslam is a former hedge fund trader with over 15 years of trading expereince. He has worked for Bank of New York Mellon and Bank of America. He also writes investment columns for Nasdaq and delivers guest lectures at various universities such as the London School of Economics (LSE).
He regularly appears on tier-one media channels such as CNBC, Bloomberg, Fox Business and others.
Will Euro and U.S. Futures Continue to Send Mixed Signals as Markets Brace for Key Data and Central Bank Comments?
Table of Contents
Where Are Markets Today?
US and European stock futures are sending divergent signals as the market awaits major economic indicators as well as quarterly earnings reports. Euro Stoxx 50 futures are down by 0.65% as investors are on edge before release of major upcoming economic indicators. US futures are sending a weak signal too. S&P 500 futures are down by 0.33%, Nasdaq futures down by 0.54%, and Dow Jones futures down by 0.23% as investors are on edge. The action is flashing market players set to expect volatility ahead as they wait for new data to give market direction.
Another prime cause behind such a risk-averse market prediction is increased anxiety about tech stocks performance. Back home in America, tech stocks experienced massive drops with most of the leading players experiencing overvaluations. The government considering plans to invest by taking equities in chip players such as Nvidia and Intel only fuelled fear more, especially as this might be a second move towards increased regulation or intervention within the industry. This left investors more risk-averse and this manifests poorly on futures performance. Furthermore, investors are considering the Federal Reserve’s meeting minutes during its July meeting later this week, released today. The minutes have the ability to give key leading direction on what central bankers are considering regarding interest rates and monetary policy. Furthermore, much attention is focused on what Federal Reserve Chairman Jerome Powell will say during the Jackson Hole symposium later this week. News or information on prospective rate reductions or increases will be monitored closely by financial markets because they can have a direct effect on market direction and sentiment, especially within equities and fixed income markets.
Lastly, geopolitical tension and if they will or won’t affect world markets are contributing to the mixed mood as well. And although fear for economic growth as a damper on investment sentiment within Europe remains international tensions with Russia and looming Ukraine negotiations are another source of risk on offer. So far investors are taking their time and lean positions to wait for key economic indicators. The sum total of issues imminent with regulators, central bank intervention, and issues with geopolitics are all helping to provide a more subdued tone out there as most investors are sitting this one out to wait for more conclusive cues.
Major Index Performance on Wednesday, August 20, 2025
The Great Seven and S&P 500
The Apple, Microsoft, Nvidia, Amazon, Meta, Alphabet, and Tesla “Magnificent Seven” are again weak. The group is already experiencing an average 18% drawdown as Meta and Tesla bear the bulk of the loss. The laggard stocks behind market growth are experiencing valuation rebalancing, which may take away some market momentum in the aggregate.
Drivers Behind the Market Move – Wednesday, August 20, 2025
U.S. and European markets are gearing up to experience a turbulent climate from recent economic figures, political trends, and market sentiment. Through early trading today, European futures are lower with Euro Stoxx 50 futures decreasing 0.65%, noting investors being cautious in anticipation of fresh economic figures. At Wall Street, futures also mirror the same muted outlook with S&P 500 futures decreasing 0.33%, Nasdaq futures decreasing 0.54%, and Dow Jones futures decreasing 0.23%, showing investors being cautious. These mirror market players positioning for possible volatility as market players look forward to fresh figures that can reverse market direction.
1. Federal Reserve Expectation July Meeting Minutes
Market traders are eagerly waiting for today’s release of minutes from last week’s meeting of the Federal Reserve. The minutes could give key insights to central bank thinking on interest rates as well as its next monetary policy move. Policymakers last week followed up with not cutting rates but rates voted down by Fed Governor Christopher Waller and Michelle Bowman to cast their first joint vote against rates by two Fed voters since 1993. The vote kindled speculation about rate cuts by the Fed at its next meeting in September as Fed funds futures are pricing virtually an 85% chance of a 25-basis-point reduction of rates next at its September meeting.
2. Geopolitical Risks and Oil Market Responses
Geopolitical developments are also shaping investing decisions. There was recently comment by U.S. President Donald Trump hoping Russian President Vladimir Putin is prepared to bring an end to war in Ukraine, which could indicate Putin is tired of seeing war persist. Trump did indicate, though, that perhaps there is a chance that Putin is not prepared to shape a peace agreement, questioning what next. The comment came on the heels of a day where Trump received Ukrainian President Volodymyr Zelenskyy and EU leaders to the White House to discuss peace negotiations. While there have been discussions on those kinds of levels beforehand, peace is hardly guaranteed with Russia not committing to taking part in direct negotiations. The resulting geopolitical uncertainty caused price action within oil with Brent crude climbing by 0.21% to a price of $65.93 per barrel as supply worries come back into play with peace negotiations being scaled back.
3. Combined Earnings Reports and Retailing Sector Performance
Retailers’ third-quarter earnings statements are to blame for the bewildering market mood. S&P 500 and Nasdaq dropped by about 0.6% and 1.5%, respectively, on a risk-off day, though the Dow was able to record a razor-thin increase on the back of a post-earnings bounce at Home Depot. Investors are eagerly awaiting reports from other significant retailers like Lowe’s Companies and Target Corporation to assess the health of the consumption sector. Those reports are likely to give signals to consumption behaviors and overall economic condition which will have an impact on investor sentiment as well as market directions.
Markets are navigating their way through a difficult maze of central bank activity, political events and corporate earnings. The investors have to stay informed and ready to respond to market action as they evolve.
Digesting Economic Data
The TRUMP Tweets and Their Implications
The last statement by President Trump once put market attention back into focus, particularly under current geopolitics and economics. The White House statement that Presidents Putin and Zelenskyy are open to meeting together evoked hopes and worries amongst investors. As true as this equates to de-escalation of conflict between Russia and Ukraine might sound, Trump himself saying he doesn’t think he can make Putin stop bombing Ukrainian civilians reveals the frailty of any peace initiative. Investors are left to contend with conflicting signals, and absence of tangible follow-throughs from such diplomatic meetings injects an element of doubt into market sentiment.
-Trump’s oratory has also centered on United States engagement in foreign war. The commitment that “U.S. boots will not be on the ground” during the Russia-Ukraine war and encouragement of direct Russia-Ukraine diplomacy are signs that his aim is to pursue diplomatic solution to conflict, rather than war-based solution. This kind of foreign policy approach, if successfully implemented, could eliminate a few threats on a geopolitical level and reduce fear of escalatory action. Market players are hesitant, though, as tension on a geopolitical level often is not a foreseeable outcome, especially with a track record of intense rhetoric regarding foreign relations. Fueling market jitters are further Trump’s denials of Russian cyber-hacking of U.S. federal courts as another factor in the multi-dimensional set of risks to investors. His “are you surprised?” remark fits his apparent lack of dedication to being angry at cybersecurity threats and may instill fear in the tech industry and fear of national security threats. Such remarks may cause gyrations in tech and cybersecurity stocks that are under regulatory scrutiny and heightened threats by foreign actors to their security infrastructure.
Finally, Trump’s petitioning Congressional action for crime legislation, for instance an expansion of D.C. police powers, and his general preoccupation with domestic American policy issues, for instance his advocacy for selected high-profile recognitions, reveals his persistent attempts to concentrate political powers and draw attention to the home front. It might have investor confidence implications because whatever possible legislative gridlock or unexpected policy changes might bring about yet another element of unpredictability to marketplaces, especially to those on public protection issues and infrastructure.
Overall, President Trump’s recent comments and tweets are making the market sentiment volatile. Although his foreign policy and domestic U.S. policy focus can provide stability to certain sectors, lack of clarity in foreign policy statements, information security risks, and the overall political environment are generating caution. The investing managers are cautioned to be careful for those developments as they occur since Trump’s remarks are driving domestic financial as well as geopolitics conditions.
Understanding Market Directions
The recent downward move of Atlanta Fed’s GDPNow projection for Q3 2025 from 2.5% to 2.3% is a reflection of difficulties in predicting economic growth. The downward revision followed a decline in third-quarter real residential investment growth nowcast from 1.1% to -5.9% following the release of housing starts data. Blue Chip consensus remains at around 2.1% as well, which is a reflection of disagreement between Fed’s quantitative approach and professional surveys. GDPNow historically carries a root-mean-squared error rate of 1.17 percentage points as a reflection that though it gives timely data, this data might not be accurate.
This revision of GDP projections comes on a day of increased doubt regarding U.S. data accuracy. Indeed, a data rewrite to 2024 of the employment data of the Bureau of Labor Statistics and its top staffer resigning amid controversy have seen doubts regarding data accuracy swell. They may influence GDP expectations as market watchers reset their own expectations to account for potential data improprieties.
In counterpoint to this uncertainty, investors will need to keep an eye on leading macroeconomic indicators like employment levels and retail figures. Companies with underlying quality with an interest in future-growth themes like technology and infrastructure will offer buying opportunities. How this macroeconomic situation evolves and if it is going to have any impact on earnings estimates in upcoming quarters will need to be monitored by analysts. The equities future will be decided by companies’ ability to adapt to a more-globalizing world.
Housing Market Indicators Mixed Recovery
US private residential building starting in July 2025 increased unexpectedly by 5.2% on a month-to-month basis compared to a fall of 1.8% that was expected. The increases were driven mainly by a big 11.6% increase in multifamily housing starts, a level that was last reported in May 2023. Single-family starts also increased with a rise of 2.8%, a more general increase in building activity. The recovery is nevertheless cancelled out by a 2.8% fall in permits that is in its lowest point over a five-year period and could indicate future building slowdowns.
Earlier beginning on housing starts have functioned as an economic cycle leading indicator and directly tracked total economic activity. The July surprise spike can be interpreted as pent-up demand for last year’s high rates during 2024. The National Association of Home Builders pointed out, within their 2023 report, the simultaneous correlation between indexes of consumer confidence, mortgage rates, and housing starts with the inference that favorable lending conditions by themselves would cause building activity to expand. The disconnect of rising starts of houses with decreasing building permits raises a question as to whether this recovery is sustainable.
Investors need to look at leading indicators like mortgage rates, builder sentiment, and regional building to assess health in the housing market. Businesses affected by housing, like homebuilders and building supply manufacturers, will be volatile with this economic data. Future quarter projections and values will be influenced by these as they are assessed by analysts.
ETF Flows as Proxies of Investor Attitudes during Economic Transitions
In July 2025, U.S. exchange-traded funds (ETFs) saw huge inflows as investors opted to put their money in stability during short-term economic doubt. Equity ETFs received about $74.5 billion, which was the largest monthly inflow during the period. Vanguard S&P 500 ETF (VOO) led with inflows of $12.5 billion as a reflection of investors’ high confidence in large U.S. equities. This is in line with Journal of Financial Economics study findings that large-cap equities perform well during late-cycle economic stages. Consumer cyclical ETFs saw a tiny outflow of about $0.48 billion as a probable reflection of lowered confidence in discretionary spending-related equities.
Invest-grade bond ETFs were also popular, gathering around $11.6 billion up to the July 30-August 6, 2025, interval, a record weekly inflow since the end of 2020. The inflows reflect investors remain optimistic about high-grade corporate debt amid signs of slowing U.S. economic growth as well as fresh introductions of protectionist restrictions. Additional market momentum came from fresh Japan, UK, and EU trade agreements that reduced concern about wider trade war. Declining borrowing costs and healthy corporate fundamentals also fuelled optimism further to drive credit spreads to near-historic lows. These trends indicate investors are taking on a “barbelling” strategy by mixing equity growth with fixed-income security. Those businesses that have strong fundamentals and coverage of those sectors that are going to expand, like technology and infrastructure, could offer investment opportunities. Fund managers will have to make decisions regarding whether those macroeconomic trends are going to persist and what effect they are going to have on assumptions about earnings within the next quarter or two. The future for equities and fixed income will hinge on what companies are able to do to adapt to a fast-altering world.
Service Sector Price Expectations Show Deflationary Orientation
August 2025 New York Fed Business Leaders Survey presents remarkable decline in service-oriented firms’ expectations regarding future received prices which fell from a high of above 40 in 2022 to near zero. The remarkable decline is observed to indicate a probable macroeconomic shift such that inflationary pressures are replaced by those of deflationary pressures as well as increased doubt regarding the global economy. The trend is rationalized as firms and especially those focusing on services predicting slowing price momentum due to slowing demand as well as possible excess capacity among specific sectors during the period.
The sharp drop in price expectations is consistent with a 2024 National Bureau of Economic Research paper study that concluded price expectations in the service sector are highly responsive to supply chain disruptions and changes in monetary policy. The inflation peak during the last cycle phase caused by supply chain tightening and acceleration of demand was followed by the rapid interest rate increases of the U.S. Federal Reserve. As the Fed proceeds to tighten monetary policy to combat inflation, subsequent slowdown in demand and reversal of previous supply chain disruptions have more than likely created the deflation signal being experienced by the service sector. The abrupt decline in price expectations for the service industry is a test of the overall consensus of ongoing inflation that has characterized much of the post-pandemic period of recovery. The decline is reason for alarm that stagflation, or a state of inflation and slowing economic growth, is beginning to gain traction. If economic growth starts to slow but inflation pressure is still in check, entrepreneurs and officials can be at a loss. Also, the rationale for this chart is aided by other economic ills at large, including lingering impacts of Trump-era tariffs that have led to slower rates of expansion and increased costs of production. As this turnaround to deflation occurs, analysts will need to pay close attention to shifting dynamics in the service-based industry and broad-based economic indicators in order to gauge the possibility of stagflation or a slowdown in economic growth over a few months.
Resilience of Housing Markets under Economic Pressure
Even with a slight decline in National Association of Home Builders (NAHB) Market Index from 33 in July to 32 in August 2025, future home sales and prospective buyer traffic continued to be robust. The resilience is a signal that residential market performance is showing resilience regardless of other economic woes. NAHB past data are evidence of high correlation between such a signal and economic cycles of recovery such that even as current conditions signal trouble, foundations upon which future recovery shall be undertaken are laid. The persistent buyer traffic remains a signal of underlying demand upon which future industry performance may be sustained regardless of challenges.
This housing market stability is distinct from pressures in the overall economy, as inflationary pressure gains of during June 2025. The increased inflation resulted in the Federal Reserve keeping high interest rates in place, which can discourage some buyers by the increase in mortgage rates. Despite the increased rise experienced in potential buyers, consumer confidence is gradually shifting as more consumers are willing to enter the marketplace in spite of high costs. The transition is also backed by data from a 2023 Federal study that linked forecasts of low rates to home demand spikes. It indicates that consumers may look forward to future interest rate decreases as a reason for increased optimism in home purchasing. In the forthcoming period, Norada Real Estate 2025 residential market performance forecast is a 6% recovery of pre-owned homes sales with most of the recovery to be a result of projected decreases in mortgage rates. The prediction breaks market belief of a stagnant residential market by attributing a primary recovery to stabilize interest rates level. It is within peer-reviewed economics frameworks which postulate that a steady recovery of residential market performance is possible following inflationary pressure peaks as stabilization of interest rates creates much of market performance momentum.
Divergence of Price and Wage Expectations Implies Inflationary Pressure
The August 2025 New York Fed Business Leaders Survey shows a large price versus wage growth gap among businesses with a services emphasis. Businesses foresee a 4.3% price received rise with wage expectations lagging by 2.0%. The gap suggests inflationary pressure is building prior to changes to cost of labor and could result in margin compression if businesses are not able to pass on higher costs to consumers. The type of gap has caused economic slowdowns in the past as a portent of underlying economic distress.
Consistent with this line of thought, 2023 National Bureau of Economic Research conducted a study that established that businesses within sectors of services are susceptible to overestimation with respect to passing on price increments within economic turbulent periods. The overestimation invokes price setting below consumers’ demand levels thus spreading pressure on finances.
Today’s economics of increased input costs and frozen wages is similar to what existed previously before 2008 during the period of the financial crisis. Then too, similar types of mismatches between price and wage expectations were identified as causes of future economic distress. These investors need to watch those industry sectors with high labour expenses and poor pricing power since they are bound to face margin pressure. The ones with good pricing power and cost-saving measures are capable of standing on their own to absorb such economic shocks. The observers will have to consider how such forces impact firm profitability as well as overall macroeconomic durability for a few months.
Biotech “Zombie” Companies Defy Fundamentals Despite Policy Shifts
This year U.S.-based biotechs with minimal or no top-line growth and debt-financed have increased by 7.2% this year compared to the S&P 500 Pharmaceutical Index this year. Speculative optimism could be behind this rally since statistics indicate that 60% of such biotech firms fail within a five-year period since they are economically non-viable. The latest rally in biotech shares that are gaining as well as those losing steam could be triggered by President Trump’s August 2025 threat to slap 250% tariff on pharmaceuticals to implement short-term supply chain reorganization by firms due to shortsightedness on their part.
The looming tariffs created a patchy market response. In general, biotech ETFs such as the iShares Nasdaq Biotechnology ETF (IBB) and SPDR Biotech ETF (XBI) rose, but individual biotechnology stocks in their benchmarks behaved unpredictably. While companies such as Arcutis Biotherapeutics and Tarsus Pharmaceuticals reported robust sales growth, others are still struggling with profitability. The discrepancy suggests investment speculation in this set of biotech, notably among those with poor fundamentals.
Analysts are warning that zombie biotech outperformance is not sustainable. It is all settled, according to a 2021 Journal of Financial Economics paper, that 75% of zombie firms underperform on a longer term with weak financials. There is a warning offered to investors to keep their guard up and look at firms with solid fundamentals and longer-range promise rather than getting distracted by short-term activity on price on policy-related news.
Service Shrinkage and Supply Chain Stresses
The August 2025 New York Federal Reserve Business Leaders Survey reports further retreats in service sector performance with its headline business activity index at -11.7 for its sixth straight monthly drop. This unrelenting drop is forcing expectations of economic weakness potentially proving more severe than implied by consensus GDP growth estimates. It is to be recalled that similar persistent negative series of service sector indices in the past have been succeeded by recession as a leading indicator and that similar recent estimates have reported retreats by other measures like the ISM Services PMI.
At the same time, the OECD mid-2025 Supply Chain Resilience Review sees unexpected disruptions of the supply chain around the world as caused by environmental and geopolitical shocks. Supply chain disruptions have increased lead times and reduced availability of supply with spreading impacts on services industry as well. Forceful reshoring will decrease world trade by more than 18% and world GDP by more than 5% without necessarily boosting resilience according to the OECD.
These patterns are opposite to a story of strong post-pandemic recovery and reflect weakness in service-based economies such as America. Concomitant decline in activity in the services sector along with supply chain pressure forebodes underlying stress in economics and questions whether or not this current expansion cycle is weaker than projections foretold. The consensus must be on high notice and monitoring key indicators and foreign supply chain health to best gauge momentum in economic expansion.
Upcoming Economic Events
Heading into another make-or-break week for the market, main economic indicators are scheduled this week which could shift investor sentiment and shape Fed thoughts on monetary policy. Like release of crucial inflation data, significant speeches from major Fed members, and minutes of previous month’s FOMC meeting, market players are eagerly awaiting reactions to a universe of unknowns. Here is a sneak peek on what to look out for, and what each data release could do to market action:
CPI y/y (Consumer Price Index)
Year-ago CPI reading of inflation is one of the primary indicators of price stability and purchasing power.
ECB President Lagarde Speaks
Since Christine Lagarde became President of the European Central Bank, market participants pay close attention to her speeches as they do due to ECB wielding control over eurozone inflation that is gaining momentum.
FOMC Member Waller Speaks
Comments by Federal Reserve Governor Christopher Waller will play a crucial role in shaping the mood of the market about future U.S. monetary policy.
FOMC Meeting Minutes
Publication of the FOMC meeting minutes will give investors a clearer sense of what the central bank policymakers talked about at the previous monetary policy meeting.
Stock Market Performance
Indexes Recover from Lows of April But Minor Breadth Reflects Continued Cautiousness
We at Zaye Capital Markets see U.S. equities recovering considerably from lows seen on April 8. Year-to-date experience is a mixed one with index-level drawdowns so far failing to reveal underlying softness beneath surface levels. Mainstream indexes are positive on momentum fronts although participation in broader markets is poor with volatility remaining entrenched within structure. What we monitor regarding recent performance in major indexes is this:
S&P 500: Strong Rebound with Fundamentally Weakened Foundation
YTD: +10 | +29 above April low | -19 below YTD high | Avg. member: -25
S&P 500 is 10% YTD higher and gained back 29% from its April low. However, a 19% drop from YTD high with 25% average member loss indicates again that this rally in the market continues to be driven by chosen leadership stocks. Ongoing poor market breadth overall continues to be a sign of weakness.
NASDAQ: Tech Resilience Hides Member Damage Underneath
YTD: +12 | +42 off Apr low | -24 from YTD high | Average member: -47
NASDAQ retains its leadership of the broader market by advancing 12% YTD as well as 42% from its low last April. But behind the scenes the index dropped by 24% from its YTD high with the average constituent dropping by 47%. The glaring disconnect reveals underlying weakness within what remains a tech-biased rally with many small techs suffering.
Russell 2000: Small Caps Don’t Join Technical Reversal
YTD: +3 | +30 above April low | -24 below YTD high | Avg. member: -38 The Russell 2000 increased 30% since last April but is just 3% positive to-date this year. This is a reflection of continued pressure on small companies and economically sensitive shares. Off highs by 24% with an average member fall of 38%, sentiment for small caps is still weak.
🏛 Dow Jones: Stability in Defensive Lean
YTD: +6 | +19 since Apr low | -16 below YTD high | Ave. member: -23 The Dow rose 6% YTD as a reflection of its defensive bias. The restricted 19% bounce back from bottoming during April and less steep 16% fall from YTD peak are signs of relatively better soundness. But aggregate participation is weak with just 23% average member loss.
We are positive on quality defense-oriented businesses at Zaye Capital Markets and are choosy as breadth and volatility are overriding headwinds.
The Strongest Sector in All These Indices
As of August 18, 2025, only the Communication Services sector remains in first place among all of the S&P 500 sectors with top YTD performance at 16.6%. It is followed by Information Technology at 15.6% and Industrials at 14.5%. They are the only three sectors with double-digit YTD gains.
Accounting for month-to-date performance, the leader is Health Care with a 4.2% gain—a remarkable rebound given that it was among the select groups with YTD losses of -1.4%. Consumer Staples and Consumer Discretionary also reported robust monthly advances of 2.9% and 3.0% respectively.
On the contrary, Energy (-1.1% YTD, -2.9% MTD) and Real Estate (0.3% YTD, -1.2% MTD) are the weakest sectors as they are plagued by persistent macro negatives such as inflation and interest rate issues.
Overall, Communication Services remains the best-performing sector to date through 2025 with resiliency as well as continued investor demand.
Earnings
Earnings Recap: August 19, 2025
Home Depot reported Q2 FY2025 earnings of $4.6 billion, or $4.58 per diluted share, matching the previous quarter’s earnings but missing analyst expectations. Despite the earnings miss, the stock rose around 4%, with the company reaffirming its full-year guidance. The market reacted positively, seeing the results as indicative of resilience in Home Depot’s operations despite broader economic pressures.
Medtronic posted Q1 FY2026 earnings of $1.04 billion, or $1.26 per share, surpassing estimates. Revenue for the quarter rose 8.4% year-over-year, hitting $8.6 billion. The company raised its full-year earnings outlook to $5.60–$5.66 per share, reflecting optimism around its accelerating growth and operational improvements. Investors welcomed the higher guidance, pushing the stock higher after the announcement.
Keysight reported Q3 FY2025 revenue of $1.35 billion, an 11% increase year-over-year. Non-GAAP EPS came in at $1.72, surpassing analyst expectations. The company also projected Q4 FY2025 revenue between $1.37 billion and $1.39 billion, with non-GAAP EPS ranging from $1.79 to $1.85. The strong results and upbeat guidance indicate that Keysight is well-positioned to continue its growth, particularly in its key sectors.
Viking posted Q2 2025 net income of $439 million, matching analyst expectations. Revenue for the quarter reached $1.88 billion, surpassing forecasts. The company also announced the addition of a fifth sister ship to its Nile fleet, signaling growth in its luxury travel business. The market responded positively to the strong earnings and expansion news, which helped boost Viking’s stock price.
Amer Sports reported Q2 FY2025 revenue of $1.24 billion, a 23% year-over-year increase. The company raised its full-year revenue, margin, and EPS guidance, driven by strong performances from its key brands, including Arc’teryx and Salomon. Investors reacted favorably, pushing the stock up as the company demonstrated its ability to capitalize on strong demand for its sporting goods and apparel offerings.
Opera reported Q2 2025 revenue of $142.96 million, a 30% increase compared to the previous year. Adjusted EPS came in at $0.17, slightly below the previous year’s $0.22. The company raised its full-year revenue guidance to between $585 million and $597 million, signaling continued growth. Despite the slight dip in EPS, the raised guidance helped bolster investor confidence, leading to a positive market response.
Earnings Preview: August 20, 2025
TJX is set to release its Q2 FY2026 earnings today. Investors will be looking for insights into the company’s performance in the off-price retail sector, with a focus on same-store sales growth, inventory management, and the impact of shifting consumer behaviors in the face of inflation. Given the volatility in the retail sector, TJX’s results will be closely scrutinized to gauge the strength of consumer spending trends.
Lowe’s will report its Q2 2025 earnings today, with a focus on key metrics such as same-store sales and gross margin trends. Investors will also be monitoring the company’s outlook on the home improvement market, especially amid macroeconomic headwinds. With consumer sentiment fluctuating, Lowe’s ability to manage its supply chain and maintain profitability will be key points to watch in today’s earnings report.
Analog Devices is scheduled to report its Q2 FY2025 earnings today. Analysts will be watching for revenue growth in the semiconductor industry, particularly in sectors like automotive and industrial applications. Any updates on supply chain dynamics and how Analog Devices is managing these challenges will also be of great interest to investors. The company’s earnings could provide insights into the broader health of the tech sector.
Target is due to webcast its Q2 2025 earnings conference call today. Investors will be paying close attention to same-store sales performance, particularly in the context of its e-commerce growth. With inflationary pressures and supply chain challenges continuing, Target’s strategies to manage these issues and maintain consumer loyalty will be key takeaways for the market. Investors will also be watching how the company adapts to shifting consumer behaviors as the retail landscape continues to evolve.
Stock Market Summary – Wednesday, August 20, 2025
US equities are having a patchy day with the Nasdaq Composite heading the decline as technology shares are under pressure once more. The S&P 500 slumps as fear about more market volatility impacts the index, though the Dow Jones Industrial Average holds firm. As market sentiment remains volatile, particularly with growth shares, market focus remains on economic data and political news that might provide direction next.
Stock Prices
Economic Indicators and Geopolitical Events
Market is protected and guided by a number of factors. Uncertainty regarding economic information such as inflation rates and employment levels as well as ongoing geopolitical threats are encouraging investors. Sorting out weakness among techs is pulling big indexes sharply lower and investor caution will be the story until improved signs are seen.
Stock News Updates: Tough Day for Growth Investors
These declined sharply on the day with leadership by large losses among a number of high-profile issues. Among largest decliners of the universe of growth shares are:
Additionally, stocks like $RKLB, $RGTI, $APLD, and $PGY declined by 7-8%, which again indicates the dismal day for growth investors. The overall performance of such stocks indicates ongoing volatility and indecision in the growth group.
The Great Seven and S&P 500
The Apple, Microsoft, Nvidia, Amazon, Meta, Alphabet, and Tesla “Magnificent Seven” are again weak. The group is already experiencing an average 18% drawdown as Meta and Tesla bear the bulk of the loss. The laggard stocks behind market growth are experiencing valuation rebalancing, which may take away some market momentum in the aggregate.
Major Index Performance on Wednesday, August 20, 2025
At Zaye Capital Markets, we are nonetheless closely monitoring performance within the sector of growth stocks as well as closely observing market conditions especially within the technology segment.
Gold Price – Wednesday, August 20, 2025
On August 20, 2025, gold is at around $3,316 per ounce, a slim 0.03% decline from yesterday. The slight decline notwithstanding, gold remains a strong performer with remarkable year-to-date returns of 28% to outpace other large assets such as stocks and bonds. Gold’s rally has been underpinned by ongoing macroeconomic issues as well as growing geopolitical tension as well as ongoing central bank and exchange-traded fund (ETF) demand for the precious metal. Traders and market observers are closely following upcoming economic data releases with special attention to be given to the Consumer Price Index (CPI) later this week to give us more details on inflation as well as on the overall macroeconomic situation.
Market sentiment is cautious as a number of factors are in play, including President Trump’s comment on whether he will be holding a summit with Russian President Putin and the prospect of direct diplomacy between Russia and Ukraine. While this may be a sign that there may be a reduction in geopolitical tension, market players remain wary of what may be potential risks. In addition, the release today of Fed members’ speeches and FOMC minutes could give valuable information on what the Fed is considering in terms of monetary policy. These are served alongside inflation figures that will have its say on gold as a safe-haven asset, especially in times of uncertainty. Considering all this, gold as a store of value against economic uncertainty has high demand, and investors are watching all this closely to see where the metal is going in the next phase of time.
Oil Prices – Wednesday, August 20, 2025
Currently, oil prices have risen moderately with West Texas Intermediate (WTI) crude at $62.72 per barrel, 0.59% higher from the previous trading session. Prices are underpinned by ongoing geopolitical tensions and hope of increasing demand, but concerns of a supply surplus and sluggish demand growth are there. The International Energy Agency (IEA) reduced its estimate of international oil demand growth in 2025 after poor consumption in the large economies. Still, OPEC+ producers are slowly easing output cuts, and the market fears a subsequent market glut. Despite supply pressure, the market remains cautious as investors are watchful and waiting for any shift in international demand and supply balance.
Presidential negotiations by President Trump with Russian President Putin and Ukrainian President Zelensky have been among market uncertainties regarding oil. Although presidential negotiations are signs of possible downside relief from tension caused by geopolitics, little short-term relief is derived from policy measures or sanctions that affect oil price costs. Moreover, Trump administration measures to stimulate faster U.S. domestic oil production, particularly by drilling on U.S. federal lands, can provide fuel for supply-side pressures. Future releases of economics by miles such as CPI data as much as those by Federal officials on what they are contemplating for monetary policy will prove important to judge impacts by inflation as well as monetary policy and could influence oil price pricing on a forward basis. The market looks for such indicators to better understand near-term oil market direction.
Bitcoin Prices – Wednesday, August 20, 2025
Bitcoin (BTC) is trading around $113,388 right now, falling by 2.24% from the previous close. The price of the cryptocurrency touched a record high of $115,994 and a record low of $112,647 witnessed during market consolidation following a high of $124,474 this month. The price move is suggestive of a short correction that could be triggered by an accumulation of macroeconomic issues like recent inflation prints and monetary policy commentaries by the Federal Reserve and more universal geopolitical issues. As market conditions for Bitcoin come back to normal, market sentiment remains guarded against persistent uncertainties like shifting inflation expectations as well as a volatile global geopolitical situation.
More recent diplomatic breakthroughs by President Trump, specifically with Russian President Putin and Ukrainian President Zelensky, only served to add to financial market confusion, including Bitcoin. Although such negotiations could offer ways to a prospective reduction in tensions, there were no signs of near-term policy shifts that have kept investors on the sidelines. Furthermore, the government bid by the United States to accelerate an increase in oil production could affect inflation expectations and therefore affect Bitcoin as a store of value amid episodes of economic hardship. The next series of economic indicators such as the CPI and Fed speak by officials will come under intense scrutiny with any shift in inflation patterns or monetary policy potentially affecting Bitcoin price action to an even larger extent within days ahead.
ETH Prices – Wednesday, August 20, 2025
Ethereum (ETH) is at $4,139.04, down by 3.5% from the last close. The price has ranged between $4,322.62 and $4,072.70 after the rally in the beginning of the month after ETH surged above $4,600 on the back of widespread institutional buying and prospective adoption of in-kind creation and redemption protocols of Ethereum exchange-traded products (ETPs). Recent action, however, triggered heightened volatility after a week of outflow witnessed on Monday at a whopping $197 million as spot Ether ETFs witnessed their second-largest single-day redemption since inception. The outflow pattern is indicative of a reversal by the investors perhaps due to profit taking or fear of market weakness. Also, unstaking queue for Ethereum set a record high at 910,000 ETH, equivalent to increasing selling pressure as witnessed with unstaking of tokens by validators.
When considering whale action, large-scale transactions continue to make waves. On Aug. 18, a large Ethereum whale moved $137 million of ETH, creating market volatility and liquidity shift issues. This follows a report of three new whale addresses purchasing $279.5 million of ETH in 24 hours, which is an indication of strong institutional buying into Ethereum. Although volatility in the near term is coming, Ethereum’s market capitalization is robust and the network remains at the forefront of decentralized finance (DeFi) and Web3 applications. These are signs that while near-term volatility is coming, Ethereum’s long-term future is supported by ongoing institutional buying and deep whale action.
Disclaimer