Stocks Surge After Powell Signals Possible Rate Cuts; Dow Jumps 850 Points to 1st Record Close of 2025

Biggest S&P 500 Movers on Friday

4 minutes ago

Advancers

The likelihood of lower borrowing costs helped boost solar stocks, with shares of solar microinverter and battery storage specialist Enphase Energy (ENPH) soaring 10.4% to post the best performance of any stock in the benchmark index.
Fed Chair Powell’s openness to near-term rate reductions also came as welcome news to companies with exposure to the housing market, which could see accelerated growth as mortgage rates retreat. Shares of Builders FirstSource (BLDR), a major supplier of residential construction materials, jumped 8.4%. Shares of flooring supplier Mohawk Industries (MHK) were up 7.3%.
Travel industry stocks also gained ground as a decline in borrowing costs could encourage consumers to increase their discretionary spending. Shares of cruise operators Norwegian Cruise Line Holdings (NCLH) and Carnival (CCL) advanced around 7%, while airline stocks also moved higher.

Decliners

Intuit (INTU) shares tumbled 5%, suffering the heaviest daily decline in the S&P 500, after the maker of tax and accounting software provided a weaker-than-expected outlook for the current quarter and the full year. The company pointed to soft demand for its MailChimp marketing platform and lower average revenue per user from TurboTax. The outlook overshadowed strong quarterly results, as Intuit beat quarterly sales and adjusted profit estimates, highlighting the contribution of its AI agents.
Major railroad operator and rail-to-truck transloader CSX (CSX) announced a coast-to-coast intermodal partnership with BNSF Railway, a subsidiary of Berkshire Hathaway (BRK.A, BRK.B). The move comes a few weeks after Union Pacific (UNP) and Norfolk Southern (NSC) agreed to a merger that would create the first transcontinental U.S. railroad, with CSX facing pressure from an activist investor to explore a potential deal of its own. CSX stock dropped 3.6% on Friday.
Shares of enterprise resource planning software provider Workday (WDAY) fell 2.8%. Although the company topped revenue estimates and edged out revenue expectations for its fiscal second quarter, its guidance for subscription revenue and operating margin in the current quarter came in below consensus forecasts. Workday’s CEO pointed to challenges facing the company’s government and education businesses as customers navigate funding cuts.

-Michael Bromberg

Here Are The Stocks Set to Benefit From Lower Rates

1 hr 20 min ago

Each of the major indexes finished the day sharply higher, led by a gain of nearly 4% for the Russell 2000 small-cap index, which closed at its highest level of 2025. Stocks that are particularly sensitive to rate cuts led the move higher.

“Our view is to expect a September rate cut and sectors that should benefit the most include home construction, small caps and banks,” said Larry Tentarelli, Chief Technical Strategist for Blue Chip Daily Trend Report. 

The DowJones Industrial Average, which hit its first record closing high since December, was led by stocks in the industrial and financial sectors. Construction equipment maker Caterpillar (CAT) and investment bank Goldman Sachs (GS) each rose about 4%, as both companies are expected to benefit from the stimulative effects of lower interest rates. Capital-intensive construction projects should pick up as borrowing costs decline, all else equal. Lower interest rates should also stimulate activity in capital markets, from which Goldman can expect to collect higher fees. 

The S&P 500 was similarly led by companies that will benefit from increased industrial and residential construction activity. Shares of construction equipment supplier Builders FirstSource (BLDR) jumped 8% and flooring supplier Mohawk Industries (MHK) added 7% on Friday.

Elevated interest rates have kept the U.S. housing market in a deep freeze for much of the last three years. Most new home buyers are priced out of the market by sky-high prices and the highest borrowing costs in more than a decade. Meanwhile, existing homeowners, many of whom locked in rock-bottom mortgage rates during the pandemic, have been reluctant to sell. That’s depressed homebuying and renovation activity. 

Shares of homebuilders soared in anticipation of a home-buying rebound. Pultegroup (PHM), D.R. Horton (DHI), and Lennar (LEN) each rose more than 5%. 

Small-cap stocks are also expected to benefit from lower rates. Smaller companies are more likely to hold floating-rate debt than larger competitors, making their margins more susceptible to compression when interest rates increase. For the same reason, they benefit more when rates decrease. 

According to Bank of America equities analyst Jill Carey Hall, history suggests that small-cap stocks outperform large caps most when rate cuts coincide with a recession. “Performance has been more mixed in non-recessionary cutting cycles,” Hall wrote in a note on Wednesday.

However, small caps today are more sensitive to interest rates and face more refinancing risk than they have historically, according to Hall. That means that, assuming economic conditions don’t deteriorate much further, small-cap stocks could respond especially well to forthcoming rate cuts. 

-Colin Laidley

Nio Jumps on Optimism About SUV Challenge to Tesla

2 hr 34 min ago

Shares of Nio (NIO) soared Friday amid optimism about the unveiling this week of the Chinese EV maker’s new ES8, its SUV challenger to the Tesla (TSLA) Model Y L.

Nio said that the six- and seven-seat Executive Premium Edition versions of the ES8 would be priced starting at 416,800 Chinese yuan ($58,122), but would be much lower at 308,800 yuan ($43,062) for buyers who also sign up for the NIO Batter-as-a-Service (BaaS) battery subscription service. The cost for the Executive Signature Edition begins at 456,800 yuan ($63,700), or 348,800 yuan ($48,640) with the BaaS plan.

Nio noted that the new ES8 is the largest electric SUV made in China. It said the model “sets a new benchmark in the premium BEV segment and leads the way for large three-row SUVs to the all-electric era.” The official launch is set for late September.

U.S.-listed shares of Nio traded in negative territory much of the year, but excitement over the ES8 has sent shares soaring. The stock was up 16% in late trading Friday, after gaining 9% yesterday.

-Bill McColl

Trump Says Intel Agrees to Sell 10% Stake to Government

3 hr 5 min ago

Intel (INTC) stock surged Friday as President Donald Trump said the struggling chipmaker had agreed to allow the U.S. government to take a 10% stake.

At a press gathering in the Oval Office announcing the World Cup draw, Trump said of Intel, “They’ve agreed to do it, and I think it’s a great deal for them.”

Citing people familiar with the matter, Bloomberg reported earlier Friday that the Trump administration and Intel were set to announce details today of an agreement that would see the U.S. take a stake in the company. The news outlet said that although details weren’t clear, “Talks had focused on converting grants under the Chips and Science Act into an equity stake of about 10% for the government.”

Bloomberg noted that the U.S. taking a stake in the once-storied chipmaker would mark a noteworthy departure from the practice of the government only stepping in during times of extreme stress. Intel declined to comment.

Intel shares were up roughly 7% in recent trading. With Friday’s gains, the stock has added a quarter of its value in 2025.

-Aaron Rennie

Reasons to Stay Bullish on AI Stocks

4 hr 38 min ago

Big tech stocks slid throughout most of the week amid a risk-off pivot, but some analysts say there are several structural reasons to remain bullish on tech giants.

The Roundhill Magnificent Seven ETF (MAGS) shed about 3.5% over the first four days of the week amid growing concerns about an AI bubble. (The ETF recouped most of its losses on Friday as stocks rallied on optimism about impending rate cuts.) A recent MIT study found that 95% of companies surveyed reported no material return on their AI investments. OpenAI’s Sam Altman late last week reportedly said he thought investors had become “overexcited” about AI.

Reports that Commerce Secretary Howard Lutnick expressed interest in the U.S. government converting all CHIPS Act grants into equity added to tech stock jitters.

But according to a Morgan Stanley analysis of 13-F filings, the largest active institutional money managers are more underweight mega-cap tech stocks than at any other point in the last 16 years. The mega caps followed by Morgan Stanley—Nvidia (NVDA), Microsoft (MSFT), Apple (AAPL), Amazon (AMZN), Alphabet (GOOGL), and Meta Platforms (META)—were under-owned relative to their S&P 500 weight by an average of 140 basis points at the end of the second quarter, a 24-basis-point increase from Q1.

Nvidia, which became the world’s first $4 trillion company in early July, is the most under-owned of the bunch; its weight in institutional portfolios is about 2.4 percentage points below its weight in the S&P 500. Microsoft (2.39%), Apple (1.66%), and Amazon (1.4%) are also significantly under-owned.

According to Morgan Stanley, “after adjusting for market cap and earnings beats, there is a statistically significant relationship between low active ownership relative to the S&P 500 and future stock performance.” That is, stocks that are being given short shrift by institutional investors tend to rise. 

Retail investors also don’t appear to be worryingly optimistic. The latest American Association of Individual Investors sentiment survey showed bullish sentiment has declined by nearly 10 percentage points over the last four weekly readings. Over the same period, bearish sentiment among survey respondents increased to nearly 45% from 33%.

“While some near-term tech volatility is not surprising given the run-up in valuations, we advise investors against becoming overly defensive for several reasons,” wrote UBS analysts in a note Thursday. 

First, tech earnings were very strong in the second quarter. The majority of tech companies beat sales and earnings estimates, and forward guidance, which tends to decline throughout the reporting season, held up. Cloud revenue grew by an average of more than 25% at the three largest providers.

In addition, internet and software companies are expected to continue to benefit from AI integrations. While AI revenue growth hasn’t quite kept up with investments, “we are seeing encouraging signs of progress as more companies embed AI into core products and services,” the analysts wrote. 

-Colin Laidley

Traders Once Again Convinced of September Rate Cut

5 hr 35 min ago

The odds of a September rate cut jumped Friday after Federal Reserve Chair Jerome Powell struck a dovish tone in his speech at the central bank’s annual Jackson Hole Symposium.

According to federal funds futures trading data, traders now see a nearly 90% chance the Fed lowers rates by 25 basis points on Sept. 17, up from 75% yesterday. Traders had scaled back their expectations of a cut in the past week after disappointing inflation data.

“With policy in restrictive territory, the baseline outlook and the shifting balance of risks may warrant adjusting our policy stance,” Powell said, signaling the Fed is open to resuming interest rate cuts after about nine months on hold.

Treasury yields tumbled following Powell’s comments. The yield on the 10-year Treasury note, which influences the interest charged on all kinds of consumer loans, dropped as much as 9 basis points to 4.24%. The benchmark yield has seesawed between 4% and 4.5% for most of the year as investors, like the Fed, waited to see how President Trump’s tariff policies would affect the economy.

The Fed faces what Powell called “a challenging situation,” with tariffs threatening to raise prices, as evidenced by last week’s hot wholesale inflation report, and policymakers aren’t sure whether tariffs will cause a one-time price increase or sustained inflation. 

At the same time, slowing growth and macroeconomic uncertainty appear to be weighing on job growth, increasing the risk that layoffs and unemployment rise. But the White House’s immigration policies have also decreased the supply of workers, keeping the labor market in “a curious kind of balance,” said Powell.

-Colin Laidley

Just Like That, Major Indexes on Track for Weekly Gains

6 hr 43 min ago

Stocks had been under pressure all week as investors braced for what Fed Chair Jerome Powell had to say about interest rates, leaving major indexes solidly in the red for the week coming into today’s session.

Now that Powell has indicated a rate cut is possible at the Fed’s next policy meeting in September, the S&P 500 and the Dow Jones Industrial Average are on track for record closing highs and set to post gains for the third consecutive week.

As of 11:00 a.m. ET, the Dow was up 1.6% for the week and the S&P 500 had gained 0.4%. The Nasdaq Composite was down 0.5% for the week, as tech stocks bore the brunt of the selling for much of the week.

Intuit Stock Sinks on Disappointing Results

8 hr 24 min ago

Intuit (INTU) shares tumbled in early trading after the maker of tax and accounting software gave weaker-than-anticipated guidance on soft demand for its MailChimp marketing platform and TurboTax tax filing program.

The firm that also owns QuickBooks and Credit Karma sees fiscal 2026 first-quarter GAAP earnings per share (EPS) of $1.19 to $1.26 and revenue growth of 14% to 15%. Analysts surveyed by Visible Alpha were looking for EPS of $1.31 and revenue 16.2% higher. In addition, Intuit’s full-year EPS projection of $15.49 to $15.69 was short of forecasts.

The outlook offset strong fiscal 2025 fourth-quarter results. Intuit posted adjusted EPS of $2.75 on revenue that increased 20% year-over-year to $3.83 billion, with both beating estimates. CEO Sasan Goodarzi pointed to artificial intelligence for the gains, noting the use of the company’s “virtual team of AI agents and AI-enabled human experts.”

Intuit noted that revenue at its Global Business Solutions Group gained 18% to $3.0 billion and Online Ecosystem rose 21% to $2.2 billion. However, when MailChimp is excluded, those segments would have advanced 21% and 26%, respectively.

U.S. TurboTax units fell 2% to 39.2 million, which the company said was “due to yielding share with lower ARPR customers.” ARPR, or Average Revenue Per Return, refers to the money Intuit gets when a customer uses its tax software.

Intuit shares were down nearly 7% in recent trading, pacing decliners in the S&P 500. Heading into today’s session, the stock was up 11% year-to-date.

-Bill McColl

Nvidia Halts China Chip Production, Reports Say

8 hr 41 min ago

Nvidia (NVDA) reportedly has told suppliers to suspend production of its H20 chip, after Beijing asked local firms to avoid using the chip tailored for the Chinese market due to security concerns.

Citing unidentified sources, The Information reported that Nvidia has instructed Samsung Electronics and Amkor Technology to halt production of the H20 chip, which are less powerful than its latest semiconductors. Reuters separately reported that Nvidia had asked Foxconn to suspend work related to the H20 chips. Foxconn, Samsung, and Amkor didn’t immediately respond to requests for comment.

“We constantly manage our supply chain to address market conditions,” an Nvidia spokesperson told Investopedia.

Last month, Nvidia and rival Advanced Micro Devices (AMD) were given approval from the Trump administration to resume sales of key AI chips to China, with the condition that they pay 15% of their chip revenue generated there to the U.S. government in exchange for the export licenses. Beijing reportedly has raised concerns that the Nvidia chips contained “backdoors,” allowing remote access to or control of the chips, a charge the tech firm has denied.

“As both governments recognize, the H20 is not a military product or for government infrastructure. China won’t rely on American chips for government operations, just like the U.S. government would not rely on chips from China,” the Nvidia spokesperson said. “However, allowing U.S. chips for beneficial commercial business use is good for everyone.”

The spokesperson added, “Cybersecurity is critically important to us. NVIDIA does not have ‘backdoors’ in our chips that would give anyone a remote way to access or control them. The market can use the H20 with confidence.”

China is a key market for Nvidia. The chipmaker said in May that it took a $4.5 billion charge in the first quarter due to export curbs on H20 chips to the Asian country.

Nvidia shares, which entered Friday up 30% this year, were down about 1% in premarket trading.

-Nisha Gopalan

Futures Point to Slightly Higher Open for Major Indexes

8 hr 41 min ago

Futures tied to the Dow Jones Industrial Average were up 0.3%.

S&P 500 futures added 0.2%.

Nasdaq 100 futures also rose 0.2%.