Wall Street Waits on the Fed, but Steel and Semaglutide Steal the Show

Caution Reigns Ahead of Fed Decision

There’s tension in the air. Investors clearly held back yesterday, waiting for Wednesday evening’s interest rate decision from the Federal Reserve.

Both the Dow Jones and the Nasdaq slipped slightly, down 0.3% and 0.1%, respectively.

Even though August retail sales rose by 0.6% for the third straight month - signaling a surprisingly resilient US consumer - it wasn't enough to spark enthusiasm. If anything, the data reinforces the idea that a 25 basis point rate cut doesn’t necessarily mean the Fed will turn dovish.

Analyst Louis Navellier warned of a classic “sell the news” reaction, especially given the event-packed week: the Fed meeting, new jobless claims on Thursday, and a massive options expiration on Friday.

Steel Dynamics Stands Tall in the S&P 500

When it came to individual stocks, there was definitely some action.

Steel Dynamics (STLD | +6.2%) was the top performer in the S&P 500 after the steelmaker raised its Q3 earnings outlook to $2.60–$2.64 per share, up from $2.05 a year ago.

The company expects better profitability from its steel operations, citing strong deliveries. Scrap metal costs are expected to drop more than average steel prices, and demand remains strong across nonresidential construction, automotive, energy, and industrial sectors. Boring? Not so much.

FDA Warning Hits Hims & Hers

The picture was less rosy at Hims & Hers Health (HIMS | -5.69%), which got hit with a warning letter from the FDA. The agency said the company made “false or misleading claims” in marketing its compounded semaglutide products, a reference to its popular (and lucrative) weight-loss meds.

The stock already took a hit earlier this year when Novo Nordisk ended its partnership with HIMS over “deceptive marketing.” With a +30% of the float shorted, HIMS is clearly a short-seller’s favorite.

Alphabet and Tesla Stay in the Spotlight

Alphabet (GOOGL | -0.14%), which surged more than 4% on Monday to cross the $3 trillion market cap threshold, was mostly flat Tuesday. Google announced it will invest £5 billion into AI development in the UK over the next two years, creating 8,000 jobs annually.

Tesla (TSLA | +2.82%) continued its upward climb after Monday’s 3.6% gain, which followed CEO Elon Musk’s purchase of $1 billion in Tesla shares. Talk about skin in the game.

Trump, TikTok, and Geopolitical Sparks

On the geopolitical front, President Trump made waves again, claiming a deal had been reached to sell TikTok’s US operations to a group of American companies. A follow-up call with Chinese President Xi Jinping is expected Friday.

Trump also filed a lawsuit in Florida against The New York Times (NYT | -1.57%), accusing the newspaper of being a mouthpiece for the radical left and demanding $15 billion in damages. He proudly announced the legal move on Truth Social, comparing it to his past lawsuits against media giants like ABC, CBS, and Disney.

Chipotle Rises, Dave & Buster’s Disappoints

In the restaurant sector, Chipotle (CMG | +1.87%) popped higher after announcing a $500 million increase in its stock buyback program, bringing the total to $750 million. Investors apparently still have an appetite for burritos.

Meanwhile, Dave & Buster’s Entertainment (PLAY | -16.74%) plunged after disappointing quarterly results. When your business model is “fun & games,” you also have to own it when the party falls flat.

Dollar Loses Ground Despite Strong Retail Data

Despite solid retail numbers, the US Dollar Index continued to slide, down nearly 11% year-to-date. The euro rose to 1.1870, its highest level against the dollar in four years. If Powell confirms additional rate cuts are on the table, we could see even more pressure on the greenback.

Final Thoughts: Calm Before the Storm?

We’re standing at a critical crossroads. Between the Fed decision, surprisingly strong economic data, rising geopolitical tension, and bold stock moves, it’s clear the market is bracing for something big.

Will it be a tailwind or turbulence? We’ll know more by Wednesday night. But one thing’s for sure, now is not the time to doze off.

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Kristoff - ChartMill

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