EB Daily Market Report - Brief Update - Thursday, August 28, 2025

Good afternoon!

The Volatility Index ($VIX, -3.50%) dipped just below its lowest closing level (14.23) of 2025 earlier today, but currently is just above this level.  The low VIX tells us that fear is being wiped out of the market, further underscoring my belief that a large drop in U.S. stocks simply is NOT in the cards for the balance of 2025.

Our major indices are again gaining ground and the big surprise is that growth stocks (IWF, +0.67%) and the NASDAQ 100 ($NDX, +0.64%) are leading the gains.  One big reason that this is a surprise was the after hours reaction yesterday of NVIDIA's (NVDA, -0.85%) latest quarterly earnings report.  The initial reaction was quite poor with NVDA tumbling 5% and NASDAQ futures dropping accordingly.  But all seems forgotten today as even semiconductors ($DJUSSC, +0.25%) are in positive territory.

Technology (XLK, +0.81%) is today's best-performing sector, while consumer discretionary (XLY, +0.12%) easily leads consumer staples (XLP, -0.43%).  Defensive sectors dominate the BOTTOM of the sector leaderboard with real estate (XLRE, -0.55%) the weakest of all.

There were several notable solid earnings reports after the bell on Wednesday, including Snowflake (SNOW, +20.91%) and Pure Storage (PSTG, +30.09%), both of which I'd consider to be excellent trading candidates going forward on pullbacks.  Both companies reported revenues and earnings per share (EPS) above Wall Street consensus estimates.  There were a fairly large number of companies that reported results yesterday after the bell and nearly every one of them beat Wall Street consensus estimates as to both revenues and EPS.  HP Inc. (HPQ, +4.43%) appeared to have the most disappointing results, falling just shy of revenue estimate and only matching its EPS estimate, yet has still managed to gain ground on the session.  Impressive.

Economically, it was a mixed bag today.  Initial jobless claims were reported slightly below (better) than consensus estimates and Q2 GDP (2nd estimate) was slightly higher than expected.  Those two solid reports were offset, however, by a weak pending home sales report for July, which showed a drop of 0.2%, while analysts were expecting a jump of 0.4%.  Still, stocks have handled all of this news quite well with the benchmark S&P 500 on the verge of closing above 6500 for the first time in history.

Happy trading!

Tom