Morning in New York: pressure on stocks persists

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

The key event on September 2 will be the publication of business activity indices in the manufacturing sector. The consensus forecast for the ISM index for August is 48.8 p. against 48.0 p. a month earlier, and the final value of the S&P Global index is expected at 53.3 p., which will confirm the preliminary assessment. These data will allow investors to assess the state of the US industrial sector against the background of persistent tariff risks and uncertainty in monetary policy.

US trade policy also remains in the spotlight. Donald Trump sharply criticized India, calling relations with it a "completely one-sided disaster." According to him, New Delhi offered too late to zero duties on US goods, while Washington had already imposed duties of 50%, as well as an additional rate of 25% due to India's purchase of Russian oil. In addition, the president accused India of actively selling its products to the US but discouraging US exports through high tariffs, which undermines the balance of trade relations. The escalation of rhetoric against India coincided with its rapprochement with China at the SCO summit, increasing tensions in international negotiations and raising the risk of further escalation of trade conflicts.

Additional pressure comes from a decision by the U.S. Court of Appeals, which ruled that most of the duties imposed by Trump were illegal, stating that the authority to impose them rests solely with Congress. Trump has already said he will appeal the decision to the Supreme Court. The tariffs will remain in effect until at least October 14, 2025 - pending a possible appeal from the White House. If the court sides with opponents of the duties, it would reduce the threat of economic consequences associated with protectionist policies, but would also create legal uncertainty around recent U.S. trade agreements that may need to be renegotiated.

On the corporate front, Nio (NIO), Signet Jewelers (SIG) and Academy Sports and Outdoors (ASO) will release their quarterly results before the market opens. Zscaler (ZS) and Healthequity Inc (HQY) will report after the close.

US index futures are under pressure on the premarket. IT stocks are mostly trading worse than the market, which may be a continuation of Friday's dynamics. The balance of risks for the upcoming session is assessed as negative with an average level of volatility. We focus on the S&P 500 fluctuations in the range of 6390-6500 points (from -1.1% to +0.6% to the closing level of previous trades).

- Tesla (TSLA) is facing a weak start in India, with the company having received just over 600 orders for the Model Y since mid-July, well below its own expectations. The model's high price in the Indian market - around $69700 versus $44490 in the US - is increasing competition from local manufacturers such as Tata Motors and Mahindra, as well as global players BYD, BMW and Kia.

- Novo Nordisk (NVO) shares are rising after the company released data confirming that its Wegovy drug has a more pronounced cardio-protective effect than rival Eli Lilly (LLY) injections, partially offsetting pressure on quotes after lowering its 2025 sales forecast.

On Friday, August 29, U.S. stock indices ended trading with a decline. Dow Jones lost 0.20%, S&P 500 fell by 0.64%, Nasdaq 100 decreased by 1.22%, and Russell 2000 - by 0.50%. Broad market sectors showed multidirectional dynamics. Health care (XLV: +0.73%) and consumer staples (XLP: +0.65%) led the gains, while consumer discretionary (XLY: -1.03%) and technology (XLK: -1.53%) were the worst performers. Among the representatives of the Magnificent Seven, Nvidia (NVDA) and Tesla (TSLA) were among the outsiders.

Macrostatistical background was saturated. The Core Personal Consumption Expenditures (Core PCE) index rose 0.3% m/m and 2.9% y/y in July, which matched forecasts and was the highest since Ma. The headline figure also added 0.2% m/m and 2.6% y/y. The data showed that inflation rose in July as expected. Steady inflation may give the Fed less incentive to cut interest rates. Personal spending rose 0.5% mom and income rose 0.4% mom. The US trade deficit widened to $103.6 bln, exceeding forecasts and reaching the highest since March. The Chicago FRB's business activity index (PMI) unexpectedly fell to 41.5 vs. consensus of 48.1, while the University of Michigan's final consumer sentiment index came in at 58.2, slightly below expectations. At the same time, inflation expectations on a five-year horizon rose again.

Investors paid special attention to the court hearing in Washington on the lawsuit filed by Lisa Cook, a member of the Federal Reserve Board of Governors, who is seeking an injunction against President Donald Trump's decision to fire her. The session ended without a verdict, and Judge Gia Cobb requested additional written arguments from the parties. Cook's lawyers called Federal Housing Finance Agency (FHFA) head Bill Pulte's allegations of mortgage fraud an unsubstantiated political attack, noting that social media postings cannot serve as legal grounds for her resignation. While the proceedings continue, Cook remains in office and sits on the Board of Governors, but the outcome of the case could set a serious precedent and increase doubts about the Fed's independence.

- Petco (WOOF: +23.5%) shares rose sharply after the release of its Q2 financials: profit and gross margin beat expectations, revenue matched forecasts, and the decline in comparable sales was within consensus. The company improved its full-year forecast for adjusted EBITDA, which reinforced investor confidence in the business turnaround.

- Ambarella (AMBA: +16.8%) beat revenue and profit expectations in the second quarter and gave a third quarter guidance above consensus. Growth was driven by the automotive electronics and IoT segments, including edge AI solutions, which reinforced analysts' optimism about new product directions.

-Autodesk (ADSK: +9.1%) beat earnings, revenue, and billings forecasts in Q2, particularly driven by its AECO segment and higher infrastructure investments. The company also raised its outlook for the third quarter and full year 2025, and the SEC closed an investigation into its reporting, which was an additional positive.

- Alibaba Group (BABA: +12.9%) soared after the company reported better-than-expected earnings for the previous quarter, but revenue was weaker than forecast. The company reported accelerating growth in its cloud business and a threefold increase in revenue from AI products, while media reported on the development of its own chips that could partially replace Nvidia's solutions (NVDA: -3.4%).

- Shares of Caterpillar (CAT: -3.7%) lost value after the company said the net impact of tariffs in 2025 will be $1.5-1.8 billion versus the previously reported $1.3-1.5 billion. The company noted pressure from expanded steel and aluminum tariffs and adjusted its operating margin guidance to the lower end of the range, which raised investor concerns.

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