Market Analysis for August 25th: Markets Rebound as Oil Falls, Yields Ease and Nvidia Earnings Loom

Canadian stocks moved higher Tuesday as strength in the financial sector offset continued weakness in energy, with investors encouraged by quarterly bank results, while remaining cautious about ongoing trade tensions with the United States. Oil prices fell to their lowest level in roughly a week as traders largely shrugged off the latest U.S. sanctions threat against Iran, putting additional pressure on Canadian energy stocks but potentially providing broader support for equities by reducing inflationary pressure. Lower oil prices also helped ease concerns about interest rates, while longer-dated U.S. Treasury yields moved lower, supporting the stock markets move higher, and particularly benefiting growth and technology stocks.

Global markets were generally firmer, with European markets edging mostly higher as investors viewed the latest Iran sanctions as less disruptive than initially feared, while defense stocks continued to benefit from geopolitical uncertainty. Asian markets were mixed but improved, with Japan’s Nikkei reversing earlier losses to finish higher as chip-related shares followed gains in South Korea, while mainland Chinese and Hong Kong markets remained relatively subdued. The current market sentiment remains highly sensitive to news in energy markets, geopolitics and interest rates, which is creating a difficult environment for investors trying to determine whether the recent market weakness represents a normal consolidation or the beginning of a deeper correction.

In American markets, traders and investors are focusing increasingly towards the Personal Consumption Expenditures (PCE) report being released tomorrow and Nvidia’s upcoming earnings report after market close on Wednesday, which could become the most important catalyst for the technology sector and broader market direction. Nvidia’s results are particularly significant because investor expectations surrounding artificial intelligence remain extremely high, meaning the company may need to deliver not only strong earnings but also powerful forward guidance to generate another sustained rally in semiconductor and technology stocks. A strong Nvidia report could help reverse the recent deterioration in the Nasdaq’s momentum, while any indication that AI spending is slowing or that expectations have become excessive could intensify the recent technology-sector correction.

The decline in Treasury yields is providing an important short-term tailwind for stocks because lower long-term borrowing costs improve the valuation of future corporate earnings, particularly for high-growth technology companies. The U.S. dollar rebounded as investors continued to monitor efforts to contain longer-term Treasury yields, while cryptocurrencies extended their rally as investors continued to position for potential currency debasement and concerns surrounding government debt. Gold pulled back after reaching a more than three-month high as investors took profits, although its elevated level continues to reflect persistent demand for defensive assets and protection against geopolitical and inflation risks.

Overall, today’s market moves remain positive but cautious, with lower oil prices, easing bond yields and stronger financial stocks supporting markets, while technology valuations and weakening momentum remain key important risks. The market’s next major test will come from tomorrow’s inflation data and Nvidia’s earnings.  A strong Nvidia outlook could potentially restore momentum to the Nasdaq and on the otherhand a disappointment could potentially confirm that the market is undergoing a broader valuation reset. As for now, the long-term bullish trend remains intact, but the recent deterioration in technology leadership means investors should be watching closely for confirmation that the market can reclaim its highs rather than assuming today’s rebound marks the beginning of another sustained move higher.

Company News

Aggreko (AGKO): Aggreko filed for a U.S. initial public offering as the power supply company looks to capitalize on strong investor demand for energy infrastructure driven by rising electricity consumption. The company plans to list on the New York Stock Exchange under the ticker AGKO, although it has not yet disclosed the number of shares or expected pricing.

Albemarle Corp. (ALB): JPMorgan lowered its price target to $140 from $160 after Albemarle wrote off its downstream lithium hydroxide assets amid persistently weak lithium prices.

Altria Group Inc. (MO) & Philip Morris International Inc. (PM): The companies entered into contract manufacturing arrangements designed to increase manufacturing efficiency and expand cigarette import and export opportunities. The first shipments are expected in 2027, with neither company expecting the agreements to materially affect 2026 results.

Baker Hughes Company (BKR): RBC raised its price target to $76 from $71 following Baker Hughes’ $13.6 billion acquisition of Chart Industries, which is expected to strengthen its position across energy and industrial infrastructure markets.

Bank of Montreal (BMO:CA): BMO reported a significant increase in third-quarter profit, helped by stronger capital markets activity and market volatility. Adjusted net income rose to C$2.86 billion, or C$3.96 per share, from C$2.40 billion, while adjusted earnings in the capital markets division jumped 45% to C$649 million. Analysts had expected quarterly earnings of approximately C$3.75 per share.

Bank of Nova Scotia (BNS:CA): Scotiabank reported third-quarter net income of C$2.95 billion, or C$2.27 per share, compared with C$2.53 billion, or C$1.84 per share, a year earlier. Net interest income increased to C$5.87 billion from C$5.49 billion, while Global Banking and Markets net income surged to C$647 million from C$473 million, supported by strong capital markets revenue and record underwriting and advisory fees. Analysts had expected approximately C$2.10 per share.

Boeing Co. (BA): Boeing received a $131.23 billion indefinite-delivery/indefinite-quantity contract from the U.S. Department of War to support the F-15 Eagle Crest program. The agreement covers aircraft production, systems integration, upgrades and sustainment and includes potential Foreign Military Sales to several allied countries, with work expected to continue through 2037.

Eli Lilly and Co. (LLY), Labcorp Holdings Inc. (LH) & Quest Diagnostics Inc. (DGX): The FDA cleared Roche and Eli Lilly’s Elecsys pTau217 blood test to help identify signs of Alzheimer’s disease in people aged 55 and older experiencing cognitive decline. Labcorp and Quest Diagnostics plan to make the test available through their laboratory networks, potentially expanding access across the United States.

Hormel Foods Corp. (HRL): Hormel appointed former Tyson Foods executive Ash Bhumbla as chief financial officer, effective September, as the company continues a broader leadership transition. Bhumbla will replace interim CFO Paul Kuehneman, who will remain with the company in a senior leadership role.

Johnson & Johnson (JNJ): The FDA expanded approval of J&J’s Imaavy to treat warm autoimmune hemolytic anemia in patients aged 12 and older who have been treated with steroids. The approval makes Imaavy the first treatment cleared for the rare blood disorder and was supported by clinical data showing substantially more patients achieving sustained improvements in hemoglobin levels compared with placebo.

nVent Electric Plc (NVT): nVent agreed to acquire data-center equipment maker Maverick Power for $1.75 billion, with an additional potential payment of up to $550 million depending on performance targets in 2027 and 2028. The acquisition is intended to expand nVent’s exposure to the rapidly growing AI data-center infrastructure market.

Nvidia Corp. (NVDA): Nvidia’s upcoming earnings report will be a major test of the sustainability of the AI investment boom. Analysts expect second-quarter revenue to nearly double year over year to approximately $92.18 billion, driven by more than a doubling of data-center revenue. Options markets are pricing in an approximately 5.4% move in Nvidia shares following the results, reflecting the unusually high expectations surrounding the company and the broader AI sector.

Onex Corp. (ONEX:CA): WestJet flight attendants voted to accept a tentative agreement providing wage increases of more than 18% over three years, following a strike that caused hundreds of flight cancellations. WestJet is majority-owned by Onex, and the agreement also introduces additional duty-pay provisions as airline workers increasingly seek compensation for time spent boarding and performing other ground duties.

Palo Alto Networks Inc. (PANW): JPMorgan raised its price target to $384 from $326, citing expectations for strong fourth-quarter results supported by growing adoption of AI security solutions.

Paycom Software Inc. (PAYC): JPMorgan raised its price target to $264 from $140 after Paycom beat second-quarter earnings expectations and raised its fiscal 2026 outlook, signaling stronger-than-expected operating momentum.

Regenxbio Inc. (RGNX): The FDA placed Regenxbio’s experimental gene therapy RGX-121 on clinical hold after spinal scans identified abnormalities in five trial participants. The treatment targets Hunter syndrome, and the setback adds to the company’s regulatory challenges following an earlier FDA rejection related to the therapy’s trial design and supporting evidence.

SpaceX (SPCX): President Donald Trump disclosed that he purchased between $15,001 and $50,000 of SpaceX shares in June, giving him a financial stake in the aerospace company and major U.S. government contractor. The White House said his portfolio is independently managed by third-party financial institutions.

Strategy Inc. (MSTR): Michael Saylor’s Strategy set aside approximately $1.6 billion in cash for future treasury activities, including potential Bitcoin purchases, share buybacks and other corporate needs. The new liquidity pool provides the company with additional flexibility to continue its Bitcoin acquisition strategy while maintaining cash reserves during periods of cryptocurrency-market weakness.

Target Corp. (TGT): Target apologized and removed a Halloween costume from its stores and website after criticism that the design evoked racist Blackface and minstrel-show imagery. The company said the product should never have been part of its assortment and is reviewing how it was approved.

Tesla Inc. (TSLA): Tesla raised the U.S. prices of its Cybertruck Dual Motor and Premium All-Wheel Drive models by $5,000, bringing their prices to $74,990 and $84,990, respectively. Separately, Tesla has stopped selling its premium Solar Roof tiles through its website as the company shifts its residential solar strategy toward conventional solar panels.