A morning in New York: technology remains in focus

Daily review and forecast of events on the U.S. stock market from Mikhail Denislamov, Deputy Director of Freedom Capital Markets Research.

The key macroeconomic event today will be the publication of the ISM Services Business Activity Index (PMI) for August (consensus: 50.5 p. vs. 50.1 p. in July). A moderate improvement is expected, but the indicator is likely to remain near the 50-point threshold, indicating stagnation in the key sector of the US economy. Against this backdrop, the final value of a similar index from S&P Global, according to preliminary estimates, amounted to 55.4 p., which emphasizes the persistent divergence between the two indicators. In any case, signs of weakness in the services sector, especially after the JOLTS report, may strengthen the market's expectations of the Fed easing its monetary policy. The picture will be complemented by weekly jobless claims data, which we expect to rise to 235k (previously: 229k), and ADP's private sector employment growth statistics (expected to rise by 73k).

However, investor focus may shift toward a political agenda. First, President Trump will meet today with the CEOs of major technology companies, including the heads of Apple (AAPL), Meta (META), Microsoft (MSFT) and OpenAI. Second, the White House has filed an appeal with the Supreme Court asking it to expedite its review of the illegality of most of the tariffs imposed. The outcome of these events could affect sentiment in both the technology sector and the market as a whole, as tariff decisions remain a key factor of uncertainty.

Ciena (CIEN) and The Toro Company (TTC) will report before the market opens. After the close, Broadcom, Inc. (AVGO), Lululemon Athletica (LULU), Samsara (IOT), DocuSign (DOCU), UiPath (PATH), Guidewire Software (GWRE) and Argan (AGX) will report.

US index futures are showing consolidation. The balance of risks is neutral; expected volatility is moderate. We focus on the S&P 500 fluctuations in the range of 6410-6480 points (from -0.6% to +0.5% to the closing level of the previous session).

- Salesforce (CRM) shares fell on the premarket Thursday despite a strong second-quarter report. The company reported revenue growth of 10% YoY to $10.24 billion and adjusted earnings of $2.91 per share, beating analysts' expectations ($10.14 billion and $2.78, respectively). However, investors were disappointed with the outlook for the third quarter: expected revenue in the range of $10.24-10.29 billion and earnings of $2.84-2.86 per share were only at consensus levels, not above. With investors expecting an acceleration on the back of the AI boom, such a cautious forecast was taken as a signal of continued low growth rates, which triggered a sell-off.

- On the contrary, American Eagle Outfitters (AEO) soared on the back of its quarterly earnings release. The company reported revenue of $1.28 billion and earnings of 45 cents per share, well above consensus forecasts ($1.23 billion and 21 cents, respectively). Although comparable sales declined 1% YoY, investors were encouraged by strong profitability growth driven by lower promotional activity and cost control.

- Shares of C3.ai (AI) fell on the premarket after posting a disappointing report. The company reported revenue fell to $70.3 million from $87.2 million a year earlier, while net loss widened. At the same time, it announced the appointment of a new CEO, Stephen Ehikian, to replace founder Thomas Siebel, who is leaving for health reasons.

- Shares of software developer Figma (FIG) collapsed on the premarket, despite the fact that the company in its first report after the IPO reported a 41% increase in revenue - to $249.6 million. Although the revenue forecast for the third quarter ($263-265 million) was above consensus ($256.8 million), investors were concerned about the slowdown in growth to 33%. Quotes may have also been pressured by a decline in customer retention to 129% from 132% in the previous quarter, which was perceived as an early sign of weakening demand.

Trading on September 3 on American stock exchanges ended with mixed dynamics: the S&P 500 rose by 0.51%, the Nasdaq 100 added 0.79%, and the Dow Jones symbolically declined by 0.05%, while the Russell 2000 lost 0.10%. The market's upward movement was fueled by shares of technology giants, particularly Alphabet (GOOGL) and Apple (AAPL), which led to a divergence between the capitalization-weighted S&P 500 and its equilibrium counterpart. The key growth driver for the communications sector was the court's ruling in the antitrust case against Google, which was softer than investors had feared. The communications sector (XLC: +1.67%) was the growth leader, while the energy sector (XLE: -2.24%) was the outsider on the back of lower oil prices.

The main macroeconomic event of the day was the publication of the JOLTS report on the number of open jobs for July, which amounted to 7.181 million, below the consensus forecast of 7.25 million and reaching the lowest level since September 2024. This data confirmed the thesis about the continued cooling of the labor market and strengthened expectations of the Fed's monetary policy easing, as a result of which the probability of a rate cut in September rose above 95%.

Against this background, investors also evaluated the comments of the Fed representatives. Christopher Waller once again spoke in favor of a rate cut in September, noting that several cuts are possible in the coming months. At the same time, political pressure on the regulator remains: it became known that Tom Tillis, a Republican on the Senate Banking Committee, will not consider candidates to replace Lisa Cook until her legal status is determined in court. This move creates additional uncertainty around the future composition of the Board of Governors of the Fed.

- The largest U.S. oil producer ConocoPhillips (COP: -4.4%) came under pressure after Reuters reported that the company plans to lay off 20% to 25% of its global workforce as part of a restructuring program.

- The growth of HealthEquity (HQY: +7.5%) was driven by a strong second-quarter report and an increase in its full-year forecast. The company reported revenue of $325.8 million (+8.6% YoY) and adjusted EPS of $1.08, which comfortably beat analysts' expectations. Investors were also encouraged by growth in the total number of health savings accounts (HSAs) to 10 million (+6% YoY) and total assets in them to $33.1 billion (+12% YoY). Raising its full-year revenue guidance to $1.29-1.31 billion and EPS to $3.74-3.91 provided further confirmation of the company's operational efficiency and ability to build market share.

- Dollar Tree (DLTR: -8.4%) shares came under pressure despite a strong second-quarter report and an increase in its full-year guidance. The company reported a 6.5% increase in comparable sales and adjusted earnings of 77 cents per share. However, investors were disappointed by the weak outlook for the third quarter, with the company expecting earnings per share to be on par with last year. Management explained that the positive effect of temporary factors related to tariffs (about 20 cents per share), which supported the second quarter results, will reverse in the third quarter and have a negative impact.

- Retailer Macy's (M: +20.7%) shares surged on the back of a strong second-quarter report and an increase in its full-year guidance, which was a positive surprise after its decline last quarter. The company reported revenue of $4.81 billion and adjusted earnings of 41 cents per share, well above expectations of $4.76 billion and 18 cents, respectively. The market was optimistic about management's announcement of the best comparable sales growth in the past 12 quarters, especially in its revamped stores, confirming the effectiveness of its ongoing strategy. The company raised its full-year guidance for revenue to $21.15-21.45 billion and for adjusted earnings to $1.70-2.05 per share, showing confidence in its ability to handle tariff pressures.

This article was AI-translated and verified by a human editor