S&P 500 flattens on report of Waller as Trump's preferred Fed chair pick

U.S. equities saw a mixed close on Thursday, with the S&P 500 and Dow easing while the Nasdaq Composite reached a record high. Key corporate news drove sector-specific movements: Eli Lilly plunged 14.1% on disappointing oral weight loss drug data, and Fortinet fell 22% after a weak revenue forecast. Conversely, Apple gained 3.2% as it was largely exempted from President Trump's new, century-high tariffs, which also contributed to broader market caution. Meanwhile, Fed appointment discussions emerged with Stephen Miran's nomination, though market expectations for a September rate cut remained largely stable at 93.2% despite a slight uptick in jobless claims.

Analysis

The U.S. equity market exhibited significant divergence, as the Nasdaq Composite advanced 0.35% to a new record high while the Dow and S&P 500 declined 0.51% and 0.08%, respectively. This bifurcation was driven by acute, company-specific catalysts rather than broad macroeconomic shifts. Eli Lilly shares plummeted 14.1% after its oral weight-loss drug data disappointed investors, a reaction severe enough to overshadow the company's simultaneous upgrade of its full-year profit and sales forecast. Similarly, cybersecurity firm Fortinet saw its shares fall 22% following a revenue forecast that missed Wall Street estimates. In contrast, Apple shares gained 3.2%, providing a critical lift to the Nasdaq after the company was largely exempted from new 100% tariffs on semiconductors for firms with U.S. manufacturing commitments. This new tariff regime, which has elevated the average U.S. import duty to a century high, is creating clear winners and losers and contributed to a cautious market tone. Political factors also injected volatility, with Intel declining 3.1% after the U.S. President called for its CEO's resignation. Despite a minor increase in weekly jobless claims, market expectations for a September Fed rate cut remained firm at 93.2%, indicating that investors are currently more focused on trade policy and corporate fundamentals than on marginal economic data.

Key Decisions for Investors

• Investors should prioritize deep, stock-specific analysis, as the dramatic and opposing moves in Eli Lilly, Fortinet, and Apple demonstrate that company-specific news and tariff exposure are currently overriding broader market trends.
• Exercise caution towards broad market indices, as negative market breadth on both the NYSE and Nasdaq, coupled with the significant macroeconomic drag from new century-high tariffs, suggests underlying weakness despite the Nasdaq's record close.
• Closely monitor political developments, including Federal Reserve appointments and direct White House commentary on corporations like Intel, as these factors are introducing a high degree of non-fundamental volatility and policy-driven risk.