S&P 500 Gains & Losses Today: Index Tops 6500 After Nvidia Earnings; Hormel Drops

U.S. equities closed higher on Thursday, August 28, 2025, with the S&P 500 notching another record high, primarily driven by Nvidia's earnings report and a positive revision to second-quarter U.S. GDP growth. Datadog led benchmark gains, surging 7% on AI enthusiasm, while Agilent Technologies also saw strong performance following robust earnings and guidance. Conversely, Hormel Foods shares plummeted 13% after missing profit estimates due to increased commodity costs, and Cooper Companies similarly fell after lowering its fiscal 2025 revenue guidance, reflecting mixed corporate performance despite the broader market's upward trajectory.

Analysis

Major U.S. indices reached new highs, with the S&P 500 closing above 6,500 for the first time, fueled by a positive revision to second-quarter GDP growth and continued enthusiasm following Nvidia's recent earnings. However, the market's advance masks a significant performance divergence at the stock level. Technology and AI-related names demonstrated pronounced strength, with Datadog (DDOG) surging 7% to lead the S&P 500, benefiting from its new AI-enhanced products and a positive read-through from MongoDB's results. Similarly, Agilent Technologies (A) rose 5.3% after exceeding sales and profit forecasts and issuing strong forward guidance, citing robust demand in its pharmaceutical and chemical segments. In contrast, consumer-focused companies faced severe pressure. Hormel Foods (HRL) plummeted 13% after missing profit estimates due to rising commodity costs, a headwind it expects to persist. The Cooper Companies (COO) fell nearly 13% after lowering its full-year revenue guidance on soft contact lens demand, triggering a downgrade from Citi. Brown-Forman (BF.B) also declined 4.9% on an earnings miss and a year-over-year sales decline, pointing to consumer uncertainty. This bifurcation indicates that while macroeconomic sentiment is positive, investors are punishing companies with specific fundamental weaknesses, such as margin compression or slowing demand, while rewarding those with clear growth catalysts like AI integration or strong end-market demand.

Key Decisions for Investors

• Consider overweighting enterprise software companies like Datadog that are successfully integrating AI to enhance their product offerings, as they are clear beneficiaries of the current technology investment cycle.
• Exercise caution with consumer staples and discretionary names, as the sharp declines in Hormel and Brown-Forman highlight significant risks from commodity inflation and wavering consumer spending, which may not be fully offset by planned price increases.
• Given the substantial performance divergence, focus on bottom-up stock selection, prioritizing companies like Agilent with strong earnings, positive guidance, and demonstrated pricing power, rather than relying on broad market momentum.
• Re-evaluate positions in the medical device sector, as Cooper's guidance cut and subsequent share price collapse signal potential demand softness in specific end markets like vision care, warranting a closer look at sector-wide trends.