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Wednesday, August 6

Noteworthy macro moves today: Oil (WTI) +1.6%. Noteworthy US mega-cap moves today: Apple Inc (AAPL) +1.7%. 

Recent market movements are significantly influenced by U.S. President Donald Trump's announcement of potential tariffs on pharmaceuticals and semiconductors, which could escalate to as high as 250%. This has created uncertainty in the markets, particularly affecting investor sentiment towards risk assets while also prompting discussions about upcoming Federal Reserve appointments that may lean toward a more dovish monetary policy.

Economic data releases have shown mixed results; notably, Germany's factory orders unexpectedly fell by 1% month-over-month in June against expectations for an increase. Meanwhile, retail sales across the Eurozone rose slightly but still missed forecasts with a growth rate of only 0.3%, indicating ongoing challenges within major European economies despite some positive earnings reports from companies.

In commodity markets, oil prices rebounded following significant inventory draws reported last week alongside rising bets on interest rate cuts from the Fed due to recent weak economic indicators like ISM Services PMI showing stagnation at just above neutral levels (50.1). The combination of these factors is contributing to cautious trading behavior among investors who remain vigilant ahead of key central bank communications later today.

United States Oil Fund LP (USO) [+1.3%]
The United States Oil Fund LP (USO) experienced a price increase of 1.3% in pre-market trading on Wednesday. WTI crude rose by 1.7% to 66.28 per barrel, while Brent increased by 1.5%. The American Petroleum Institute reported a notable decline in U.S. crude inventories, with a drop of 4.2 million barrels for the week ending August 1, exceeding forecasts of a 1.8 million barrel decrease. Gasoline inventories also fell by 900,000 barrels, and Cushing stock change was reported at 1.7 million barrels. These developments reflect tightening supply dynamics within the oil market. Additionally, President Donald Trump's threats to impose tariffs on Indian imports related to its purchases of Russian oil are creating uncertainty in global energy markets, contributing to the current pricing dynamics for Brent crude.

Health Care Select Sector SPDR Fund (XLV) [+0.4%]
Health Care Select Sector SPDR Fund (XLV) has seen a price increase of 0.4% since Tuesday. President Donald Trump announced plans for new tariffs on pharmaceuticals, potentially reaching up to 250%, aimed at boosting domestic manufacturing. This follows a notable decline in the ISM Services PMI for July, which fell short of expectations and suggests stagnation within the services sector. Such developments may impact healthcare stocks in XLV due to potential increases in costs or supply chain disruptions. Among the ETF's holdings, Charles River Laboratories International Inc. reported strong second-quarter results, exceeding expectations with an adjusted EPS of $3.12 and revenue of $1.03 billion. The company raised its full-year adjusted EPS guidance, citing robust performance in the DSA segment and favorable foreign exchange impacts, despite a reduction in its GAAP EPS guidance.

ANET | +12.9% | +5.4B
Arista Networks Inc | Communications Equipment
Arista Networks Inc reported strong Q2 results, posting an adjusted earnings per share (EPS) of 0.73, exceeding the consensus estimate of 0.65. Revenues reached 2.205 billion, surpassing expectations of 2.108 billion. The company’s net income rose to 888.8 million, up from 665.4 million in the prior year. For Q3, Arista forecasts revenues of approximately 2.25 billion, higher than the 2.093 billion expected by analysts. The gross margin for Q2 was reported at 65.6%. Following these results, discussions on social media highlighted a 10% quarter-over-quarter revenue increase and a 30.4% year-over-year increase. Analysts noted that Arista's adjusted operating profit crossed 1 billion for the first time. KeyBanc raised the price target for Arista to 145 from 115, citing strong demand driven by AI networking and growth opportunities in NeoClouds and Enterprise markets.

AMD | -5.6% | -14.9B
Advanced Micro Devices Inc | Semiconductors
Advanced Micro Devices (AMD) experienced a significant decline in its stock price following the release of its second-quarter earnings report. The company reported revenue of 7.69 billion, exceeding analyst expectations of 7.41 billion, while adjusted earnings per share were 0.48, slightly below the consensus estimate of 0.49. The CFO noted that U.S. export restrictions on AI chips to China resulted in approximately 800 million in inventory and related charges, which adversely impacted earnings. Despite projecting strong revenue guidance for the third quarter at about 8.7 billion, concerns arose due to the absence of anticipated sales from the MI308 series linked to licensing issues. As a result, shares dropped significantly in pre-market trading after the earnings announcement. Social media discussions highlighted mixed reactions from analysts, with some raising price targets based on strong Q2 results while others expressed caution regarding future performance.

SNAP | -17.9% | -2.3B
Snap Inc | Interactive Media & Services
Snap Inc. reported disappointing second-quarter earnings, with a net loss widening to $263 million from $249 million year-over-year. Revenue reached $1.345 billion, in line with expectations but reflecting the slowest growth in over a year due to a temporary glitch in its advertising platform. Daily active users increased by 9% to 469 million, although North America saw a slight decline in users. Following the earnings report, analysts downgraded their ratings, with Guggenheim and Bernstein cutting their price targets to $8 and $9, respectively. Social media sentiment has turned negative, highlighting frustrations over management execution and the company's financial trajectory, particularly after this marked the 11th miss in the last 14 quarters. The stock fell sharply, declining around 15% post-earnings and approximately 19% in pre-market trading. The current market capitalization stands at $15 billion, with shares trading at three times revenue.

SHOP | +14.2% | +26.6B
Shopify Inc | Internet Services & Infrastructure
Shopify Inc reported its Q2 2025 results, revealing revenue of 2.68 billion, surpassing analyst estimates of 2.55 billion by over 5%. This figure represents a significant increase from 2.04 billion in the same quarter last year. The company announced an adjusted EPS of 0.35, exceeding the consensus estimate of 0.29 by more than 21%. Gross Merchandise Volume (GMV) reached 87.84 billion, while Monthly Recurring Revenue (MRR) stood at 185 million. Following the earnings report, Shopify's stock saw a pre-market increase of approximately 11%. The CEO noted that the results reflect previous bold decisions, while the CFO highlighted substantial growth in GMV and revenue across North America, Europe, and Asia Pacific. Looking ahead, Shopify anticipates Q3 revenue growth in the mid-to-high twenties percentage range year-over-year.

RIVN | -7.0% | -791.2M
Rivian Automotive Inc | Automobile Manufacturers
Rivian Automotive reported a wider-than-expected adjusted loss per share of $0.97 for the second quarter, surpassing the analyst estimate of $0.76. Revenue reached $1.303 billion, slightly above expectations of $1.29 billion. The company now anticipates full-year adjusted EBITDA losses between $2 billion and $2.25 billion, a revision from its previous forecast, primarily due to changes in regulatory credits and increased production costs. Deliveries for the quarter totaled 10,661 vehicles, reflecting a 22% decline year-over-year. Production was constrained as Rivian prepares for the launch of its upcoming R2 model. Additionally, export controls on rare earths and heavy metals have resulted in supply chain challenges, although Rivian has obtained licenses to facilitate metal movement from China and expects to reduce downtime starting in September. Following these developments, Rivian's shares fell significantly, dropping 7.2% in pre-market trading.

MCD | +4.4% | +9.8B
McDonald's Corp | Restaurants
McDonald's Corp reported robust Q2 results, with adjusted earnings per share of 3.19, surpassing the consensus estimate of 3.15. Revenue for the quarter reached 6.84 billion, exceeding expectations of 6.7 billion. Global comparable sales increased by 3.8%, significantly higher than the forecast of 2.5%. U.S. comparable sales rose by 2.5%, while international markets showed even stronger growth, with increases of 4.0% in International Operated Markets and 5.6% in International Developmental Licensed Markets. Net income was reported at 2.253 billion, up from 2.022 billion year-over-year. Additionally, social media highlighted the success of a Minecraft movie promotion that boosted sales among young adults and the upcoming launch of an adult Happy Meal, reflecting ongoing innovative marketing strategies. Following these announcements, McDonald's shares experienced a notable increase in pre-market trading.

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