EB Daily Market Report - Brief Update - Tuesday, August 26, 2025

Good afternoon!

I just wanted to provide everyone a quick note about today's action.  All of our major indices are higher, though gains are mostly muted.  The small cap Russell 2000 (IWM, +0.94%) and mid cap S&P 400 (MDY, +0.65%) have regained a leadership role today after seeing a bit of profit taking on Monday.  It's been another big day for regional banks (KRE, +1.32%) as money continues to rotate towards some interest-rate-sensitive stocks, not all.  Home construction ($DJUSHB, -0.19%) is notably lagging on today's session.  Transports ($TRAN, +0.08%) also are lagging the major indices.

Both the S&P 500 and NASDAQ 100 are higher today, remaining above their respective 20-day EMAs, though I'd categorize both as consolidating indices as opposed to uptrending indices.  Large cap growth (IWF, +0.27%) is outpacing large cap value (IWD, +0.05%) mostly due to a strong semiconductor ($DJUSSC, +1.16%) group.  NVIDIA Corp (NVDA, +1.00%) is moving closer to its all-time high as it's now just one day away from reporting its latest quarterly results, which are likely to be quite strong.

Sectors are a mixed bag, with 5 higher, 5 lower, and utilities (XLU, +0.00%) flat.  The strength in semiconductors is helping technology (XLK, +0.39%) outperform on the session, while communication services (XLC, -0.61%) relinquishes its leadership role from Monday.  The back-and-forth nature of our aggressive sectors is the main reason why our major indices are mostly in consolidation mode.

We'll begin to hear from several mid-tier software companies later today, when both MongoDB (MDB, -1.85%) and Okta (OKTA, -0.28%) report their latest quarterly results.  If relative strength is any guide to results, I'd have a low bar set for both of these companies as their both at multi-month lows vs. the software group ($DJUSSW, -0.60%) as a whole.

Technically, Etsy, Inc. (ETSY, -3.55%) is interesting.  After ripping to the upside and breaking out earlier in August, it's been a difficult two-week stretch and it's now testing a very key short-term support level in the 55.00-56.00 price range.  Will it hold and reverse?  Or will we see a breakdown and another trip down to 50?  Like I said, it's an interesting stock right now.

I'll be back tomorrow with another Daily Market Report (DMR).

Happy trading!

Tom