Midday market update: Equities mixed as AI, Fed and energy diverge

Introduction#

U.S. equities are trading mixed at midday Tuesday, August 26, 2025, after a cautious open gave way to selective risk-taking in cyclicals and AI-levered tech while defensives and energy slipped. According to Monexa AI real-time market data at approximately 12:40 p.m. ET, the S&P 500 (^SPX) is modestly higher, the Dow (^DJI) is up slightly, and the Nasdaq Composite (^IXIC) is outperforming on strength in semiconductors despite pressure in megacap internet. Volatility is firmer with the CBOE VIX edging higher, while crude oil is down roughly 2% intraday alongside weakness in energy shares. The session is defined by dispersion: industrials, basic materials and selected AI semis are bid; consumer staples, towers/REITs and hydrocarbons are offered. Macro-wise, investors digested a cooler consumer confidence labor-market read, a July durable goods dip, and ongoing policy intrigue around the Federal Reserve that has kept a mild bid in long-end yields and renewed chatter of a bear steepener.

From the opening bell to midday, the tone improved. U.S. stocks opened in the red as investors weighed political pressure on the Fed and awaited Wednesday’s Nvidia earnings, but benchmarks turned positive by late morning as AI leaders stabilized and financials caught a bid (CNBC; Monexa AI data; “US stocks open in red…” at 9:52 a.m. ET, and broad tape levels thereafter).

Market Overview#

Intraday Indices Table & Commentary#

Source: Monexa AI real-time market data (midday).

The S&P 500’s intraday range is tight around session highs, printing 6,429.21 at the low and 6,449.17 at the high, not far from the year-to-date high at 6,481.34 (Monexa AI). The Nasdaq Composite is pacing gains as AI hardware leaders firm into Wednesday’s result from NVDA, while the VIX at 14.89 is up slightly versus Monday’s 14.79 close—consistent with event risk around earnings and Friday’s inflation data (Monexa AI). The Russell 2000 volatility gauge (^RVX) is fractionally lower, underscoring the day’s split-screen: large-cap event risk is being priced, but small-cap volatility is contained.

Under the surface, breadth is uneven. According to Monexa AI sector heatmaps, technology is modestly positive, industrials and basic materials are firmer, and financials are constructive, while energy, real estate and consumer staples lag. Concentration remains a defining feature: even small moves in MSFT, AAPL and NVDA continue to sway indices given their outsized weights (Monexa AI; see “What We Should Have Been Watching?” referencing the top-10’s outsized S&P share).

Macro Analysis#

Economic Releases & Policy Updates#

The Conference Board’s August Consumer Confidence headline ticked to 97.4 versus 96.6 expected, but the labor-market differential softened as a higher share of respondents said jobs were “hard to get” (roughly 20% vs. 18.9% prior), a nuance that helped cap early risk appetite (CNBC; “Consumer confidence comes in at 97.4 vs. 96.6 estimated” at 10:29 a.m. ET; “Consumers’ views of the labor market deteriorate in August” at 10:10 a.m. ET). Separately, July U.S. durable goods orders declined, a data point that added to the morning’s growth-feel headwinds before the tape stabilized (CNBC; “Crude Oil Down 2%; US Durable Goods Orders Decline In July”).

Regional factory data offered a modest bright spot: the Richmond Fed’s Fifth District Survey of Manufacturing Activity improved to -7 in August from -20 in July, suggesting a less severe contraction in mid-Atlantic manufacturing conditions (Federal Reserve Bank of Richmond; 10:47 a.m. ET update). While still negative, the sequential improvement aligns with today’s firming in industrials and select materials.

Policy remained front and center. Overnight and into the morning, debate intensified around presidential authority to remove a sitting Federal Reserve governor, following reports that President Trump told Gov. Lisa Cook she was being removed and Cook’s public response disputing that authority (CNBC; 10:48 a.m. ET and 10:55 a.m. ET). Former Fed officials and market strategists suggested any removal attempt would likely be adjudicated in the courts, with implications for Fed independence (CNBC interviews with Frederic Mishkin and Scott Alvarez, around 11:50 a.m. ET and 12:16 p.m. ET). The political noise adds a layer of uncertainty to an already delicate policy moment, with Chair Powell’s Jackson Hole remarks last week having “opened the door” to a potential September rate cut while emphasizing data dependency (Monexa AI news summary, 10:01 a.m. ET). Taken together, these crosscurrents have supported a bear-steepening narrative—limited downside at the front end, pressure at the long end—which is often constructive for banks and challenging for rate-sensitives like tower REITs.

Global/Geopolitical Developments#

Trade policy and supply chains were back in focus. Reporting this morning highlighted that U.S. heavy-duty truck makers are considering shifting more sourcing to Mexico to offset cost pressures from new tariffs and to leverage USMCA concessions (Reuters; “US truck makers look for cover as Trump’s tariffs raise costs,” 10:20 a.m. ET). The tariff discussion is rippling into retail as well, with upcoming results from WSM flagged by traders as a read-through on import costs and pricing power (Monexa AI/TD Ameritrade Network at 11:01 a.m. ET).

In commodities, crude oil traded lower by roughly 2% intraday, pressuring energy equities (CNBC commodities; “Crude Oil Down 2%,” 12:16 p.m. ET). Gold’s year-to-date leadership relative to Bitcoin was also noted in morning commentary as digital assets weakened in recent days (Monexa AI news roundup at 10:38 a.m. ET).

On the corporate calendar, AAPL confirmed it will hold its fall launch event on September 9, where new iPhones and other devices are expected to debut (Reuters; “Apple to host special event on September 9,” 12:07 p.m. ET). The timing put a mild bid under the shares and helped steady broader tech sentiment.

Sector Analysis#

Sector Performance Table#

Source: Monexa AI sector performance (midday).

The day’s sector map underscores rotation. Utilities are led by power generators and energy-transition exposures, with Constellation Energy (CEG +1.29%), Vistra (VST +2.29%) and GE Vernova (GEV +2.49%) each advancing (Monexa AI). Basic materials firmed on miners and copper-levered names, with Newmont (NEM +1.81%) and Freeport-McMoRan (FCX +1.43%) tracking commodity strength, while industrials rallied with aerospace and airlines in the lead—Howmet (HWM +2.29%), Boeing (BA +2.11%), General Electric (GE +1.83%) and Southwest (LUV +2.58%).

Financials are constructive—JPMorgan (JPM +0.69%) and Bank of America (BAC +1.06%) are higher—consistent with a bear-steepening impulse noted in morning rates commentary (Monexa AI; “Inflation Fears Fuel The Bear Steepener,” 12:35 p.m. ET). Healthcare is mixed but buoyed by outsized gains in Eli Lilly (LLY +4.35%) and Regeneron (REGN +2.15%). Technology is up modestly, with semis and AI-adjacent names supporting, while megacap internet in Communication Services lags (Alphabet GOOGL -0.83%; GOOG -0.79%) despite strength in streaming at Netflix (NFLX +0.56%).

The weak links are consumer staples, energy and real estate. Beverages and spirits weigh on staples—Keurig Dr Pepper (KDP -5.21%), Brown‑Forman (BF-B -4.08%), Constellation Brands (STZ -3.34%)—and crude’s slide leaves energy broadly lower—Exxon (XOM -0.77%), Chevron (CVX -0.64%), Devon (DVN -1.72%), Halliburton (HAL -2.06%). In real estate, tower REITs underperform sharply—American Tower (AMT -2.40%), Crown Castle (CCI -2.51%), SBA Communications (SBAC -2.16%)—consistent with rate sensitivity under a bear steepener backdrop (Monexa AI heatmaps).

Company-Specific Insights#

Midday Earnings or Key Movers#

Nvidia (NVDA +0.92%) is the session’s lodestar ahead of Wednesday’s after-the-bell results, with investors focused on data center growth, Blackwell platform shipments and hyperscaler capex signals that could set the tone for semis and broader AI equities through month-end (CNBC preview and Monexa AI deep-dive aggregation between 10:00–11:10 a.m. ET). While event risk is capping enthusiasm in megacap internet—Alphabet (GOOGL -0.83%; GOOG -0.79%) and Meta (META -0.34%)—AI hardware adjacency is supportive for Broadcom (AVGO +1.26%), helped by headlines that Walmart selected VMware Cloud Foundation to unify its cloud and edge operations, underscoring enterprise software and networking synergies (company announcement relayed via Monexa AI at 9:00 a.m. ET).

Earnings-wise, Semtech (SMTC +15.98%) surged after delivering a beat-and-raise quarter, with revenue at $257.6 million and adjusted EPS of $0.41 topping consensus, and guidance implying continued data center and industrial demand momentum (Monexa AI; Semtech Q2 update at 11:53 a.m. ET). The beat is being echoed in sell-side posture shifts—Craig‑Hallum raised its price target to $62 while maintaining a Buy rating (Monexa AI at 10:09 a.m. ET).

Consumer and retail had several idiosyncratic movers. VF Corp (VFC +6.62%) rallied after Baird upgraded the shares to Outperform and lifted its price target to $20, citing improving brand momentum and cost controls (Monexa AI, 7:52 a.m. ET). eBay (EBAY -4.53%) and Domino’s (DPZ -3.22%) weighed on discretionary, while travel/leisure outperformed with Royal Caribbean (RCL +2.03%).

Banks and financials benefited from the steeper curve narrative and solid Canadian bank prints: Bank of Montreal (BMO +4.03%) beat EPS expectations in its fiscal Q3, even as revenue missed, while Scotiabank (BNS not shown) also topped EPS estimates despite revenue shortfalls (Monexa AI earnings summaries around 9:00–10:38 a.m. ET). Exchanges lagged with Cboe (CBOE -2.44%), reflecting a softer tape for market-structure plays.

In healthcare, Eli Lilly (LLY +4.35%) and Regeneron (REGN +2.15%) drove sector outperformance against mixed prints for managed care and med-tech. UnitedHealth (UNH +1.20%) provided ballast, while Johnson & Johnson (JNJ -0.92%) and Moderna (MRNA -2.01%) traded off (Monexa AI).

In energy infrastructure, midstream names were resilient relative to E&Ps despite crude’s decline. MPLX (MPLX +0.33%) held gains, and ONEOK (OKE -0.70%) outperformed integrateds and drillers on a relative basis, aided by analyst commentary around the Eiger Express pipeline joint venture and constructive long-haul gas positioning (Monexa AI, multiple notes between 10:15–11:08 a.m. ET).

Apple’s device cycle re‑entered the frame with confirmation of a September 9 event. Shares of AAPL are up +0.38% midday following the announcement and a flurry of previews on iPhone, Watch and AirPods refreshes (Reuters; 12:07 p.m. ET). While product details are for September, the event’s timing helps stabilize mega-cap tech sentiment into a catalyst-heavy week.

Extended Analysis#

Intraday Shifts & Momentum#

The session’s evolution reflects a classic pre‑mega‑cap earnings posture: a cautious open, a stabilization phase as traders mark levels, and a selective bid for names with clear near-term catalysts. The morning selloff in defensives and energy coincided with a roughly 2% slide in crude and renewed rate jitters after commentary about a potential bear steepener—higher long-term yields relative to short rates—circulated across desks (CNBC commodities; Monexa AI macro roundup). That pattern often leads to outperformance in banks and cyclicals and underperformance in long-duration equities like tower REITs and certain software names, which is precisely today’s setup. American Tower, Crown Castle and SBA Communications are each down roughly 2–3% as of midday (Monexa AI), while JPMorgan and Bank of America are both green.

Meanwhile, the AI complex continues to govern narrative and capital flows. Nvidia’s move into the afternoon is constructive yet measured (+0.92%), consistent with event-risk hedging in options and a “wait for the print” stance in cash equities. Adjacent beneficiaries—Broadcom, select accelerators and data center-exposed analog/mixed-signal names—are catching bids, with Semtech’s beat providing a fresh datapoint that AI infrastructure and high-speed connectivity demand remain healthy (Monexa AI; Semtech earnings).

The dispersion within technology is notable. Alphabet and Meta are down modestly, reflecting ad‑driven megacaps’ sensitivity to macro and policy noise, but hardware and semiconductor names skew positive as investors position for supply-chain and capex signals from Nvidia. The nuance matters for portfolio construction: today’s market is rewarding AI infrastructure over AI monetization narratives in advertising or consumer internet.

Outside tech, industrials are a clean expression of the day’s cyclical tilt. Aerospace and airlines led from the open (Howmet, Boeing, GE Aerospace, Southwest), with improving regional factory readings from the Richmond Fed offering a macro assist. Materials tracked commodity specifics—copper and gold—while construction materials (e.g., Martin Marietta MLM +1.63%) moved higher on steady demand expectations.

Consumer sectors remain bifurcated. Discretionary is near flat as weakness in e‑commerce and restaurants is offset by travel and auto aftermarket strength—O’Reilly (ORLY +0.80%). Staples, in contrast, are under pressure in beverages and spirits, a reversal of their typical defensive role when volatility rises. The move is consistent with a rotation away from defensives and towards cyclicals into week’s end catalysts.

Real estate’s underperformance maps directly to rates. Tower REITs are most rate‑sensitive given long-dated cash flows and the capital intensity of their tenant bases; with volatility modestly higher and event risk in the headlines, the path of least resistance today is lower for the group. Data-center REITs like Digital Realty (DLR +1.20%) are an exception, benefiting from persistent AI/compute demand even as funding costs percolate (Monexa AI heatmaps).

Finally, policy and politics are not background noise. The morning’s legal and constitutional debate around Fed governance arrives just as investors are calibrating the odds of a September rate move in the wake of Chair Powell’s Jackson Hole remarks. Even without firm conclusions, the meta‑signal—policy uncertainty—helps explain why the VIX is up and why the tape is reluctant to chase highs ahead of Nvidia and Friday’s inflation releases (Monexa AI; CNBC interviews with Scott Alvarez and Frederic Mishkin).

Conclusion#

Midday Recap & Afternoon Outlook#

By lunchtime, the market has absorbed a mixed macro slate and a drip of policy headlines and returned to its core 2025 rhythm: AI infrastructure leadership, cyclical resilience on bear‑steepener dynamics, and selective risk‑off in rate‑sensitives and defensives. According to Monexa AI, the S&P 500 is up +0.15%, the Dow +0.07% and the Nasdaq +0.20%, with the VIX at 14.89 (+0.68%). Sector breadth favors utilities, materials, financials and industrials, while staples, energy and real estate lag. Crude oil’s ~2% slide is the primary drag on energy equities (CNBC commodities), and a less‑bad Richmond Fed print has supported cyclicals.

Into the afternoon, attention will remain glued to the following:

• Nvidia earnings after the close on Wednesday and any early readthroughs from peer commentary today. The market’s concentration means even small moves in NVDA, AAPL and MSFT can tilt the indices.
• Policy headlines around Fed governance and any rates repricing that shifts the bear‑steepening bias; watch banks versus towers and software as live barometers.
• Oil’s trajectory into settlement and whether energy stabilizes; if crude remains heavy, expect continued relative support for midstream over E&P and services.

In short, the midday playbook is to respect dispersion and trade the catalysts you can underwrite: AI infrastructure strength remains the market’s north star, banks benefit from curve dynamics, and rate‑sensitives are the funding source.

Key Takeaways#

• According to Monexa AI real-time data near midday, U.S. indices are modestly higher: ^SPX +0.15%, ^DJI +0.07%, ^IXIC +0.20%, with ^VIX +0.68%.
• Macro releases showed consumer confidence at 97.4 vs. 96.6 expected and a decline in July durable goods, while the Richmond Fed index improved to -7 from -20, a modest cyclical tailwind (CNBC; Federal Reserve Bank of Richmond).
• Sector rotation favors utilities, materials, financials and industrials, while staples, energy and real estate lag (Monexa AI).
• Stock-specific drivers include SMTC +15.98% on a beat and raise, LLY +4.35%, AVGO +1.26%, and VFC +6.62%, while towers and beverages weighed (Monexa AI).
• Event risk is elevated into NVDA earnings and policy headlines; bear‑steepener dynamics continue to inform relative performance—constructive for banks, challenging for long‑duration, rate‑sensitive equities (Monexa AI; CNBC).

Sources and references:

• Monexa AI real-time market and heatmap data (indices, sectors, individual movers).
• CNBC: Consumer confidence (10:29 a.m. ET), labor-market views (10:10 a.m. ET), market open and midday updates (9:52 a.m. ET), durable goods commentary (12:16 p.m. ET), crude oil intraday move, and interviews with Scott Alvarez and Frederic Mishkin.
• Federal Reserve Bank of Richmond: Fifth District manufacturing survey for August.
• Reuters: Apple confirms September 9 launch event.
• Reuters: U.S. truck makers consider Mexico sourcing to offset tariffs.