Newsletter · · Ashutosh Agarwal

Dick's Sporting Goods Collapses 31 Percent as Stocks Melt Up Before Nvidia - Daily Market Wrap - Tuesday, August 25, 2026

Daily Market Wrap for Tuesday, August 25, 2026: a quiet melt-up carried the S&P back toward records with the VIX near 15, while Dick's Sporting Goods lost nearly a third of its value on a gutted forecast for its Foot Locker bet and Moderna surged 14% on a cancer-pipeline upgrade.

Daily Market Wrap

Tuesday, August 25, 2026: Dick's Sporting Goods Collapses 31 Percent as Stocks Melt Up Before Nvidia

Stocks crept back toward records with the VIX near 15 as Wall Street braced for Nvidia's earnings on Wednesday. Underneath the calm, Dick's Sporting Goods lost nearly a third of its value after slashing guidance on its sinking Foot Locker bet, and Moderna soared 14% on a cancer-pipeline upgrade.

Tuesday, August 25, 2026, US market close

The scoreboard:

  • S&P 500: 7,675.83, +0.30%, back within striking distance of its record high (7,816.70)
  • Nasdaq Composite: 26,151.30, +0.66%, the day's leader, dragged up by chips and AI hardware
  • Dow Jones Industrial Average: 53,577.40, +0.30%
  • Russell 2000 (small caps): 3,010.02, +0.50%
  • VIX (the market's "fear gauge"): 15.46, -2.46%, a low reading that says traders are relaxed
  • 10-year Treasury yield: 4.64%, down about 7 basis points (a basis point is one-hundredth of a percentage point) from 4.71%
  • Best sector: Communication Services, +1.13%. Worst: Industrials, -1.11%, with Energy close behind at -0.68%

It was a classic "hold your breath" session: broad, quiet gains, falling volatility, and money quietly rotating into anything AI-adjacent ahead of the week's main event. But the tape's calm hid one violent single-stock explosion.

Big Story 1: Dick's Sporting Goods Detonates, Down Nearly a Third

What happened. Dick's Sporting Goods (DKS) collapsed 30.68% to $124.31, a roughly $55 drop and one of the ugliest days a $10 billion-plus retailer has had in years. It reported second-quarter results before the open and both missed and, more importantly, gutted its full-year forecast.

  • Adjusted earnings came in at $3.53 a share, below the ~$3.76 Wall Street expected and down from $4.38 a year ago. Sales rose 53% to $5.59 billion (that jump is because the quarter now includes the newly acquired Foot Locker), just shy of the ~$5.64 billion estimate.
  • Here's the split that matters: the core Dick's chain actually did well, with comparable-store sales (sales at stores open at least a year, the retail industry's cleanest growth measure) up 4.9%. But Foot Locker's comparable sales fell 3.6%.
  • The forecast cut was the real story. Dick's slashed full-year adjusted EPS to $11.00 to $12.00, from $13.50 to $14.50, roughly $2.75 off the midpoint. The reason: Foot Locker is now expected to lose $40 to $80 million this year, versus a previously guided profit of $110 to $150 million, a swing of up to a quarter-billion dollars.

Why it happened. This is a footwear problem, not a "the American consumer is dead" problem. The athletic-sneaker world is drowning in unsold inventory of older, "legacy" shoe styles, and brands are discounting hard to clear it. Foot Locker, which sells almost nothing but sneakers and leans heavily on hyped "launch" product, got hit far harder than the diversified Dick's stores. A weak launch calendar and an especially promotional European market made it worse, and a higher tax rate added insult to injury.

What people said. Executive Chairman Ed Stack was blunt about what changed in the last 90 days:

"What changed is a number of brands got very promotional on their sites, and those promotions spilled into the broader marketplace. We expect that to, unfortunately, continue through the balance of the year."

He argued the pain is worth it to defend market share, and defended the Foot Locker deal even as investors punished it: "what we did with Foot Locker is absolutely the long-term right decision, although right now I'm sure some of you are kind of scratching your head." CEO Lauren Hobart struck a similar note, saying the company is "taking a more cautious view of the balance of the year" but remains "highly confident in the strength of the DICK'S Business."

The Street was less forgiving. Wells Fargo's Ike Boruchow, who stayed bullish, still cut his price target to $185 from $240 and called the quarter "as bad as it gets," warning the footwear backdrop is "deteriorating further." Gordon Haskett went further, cutting to $130 and saying the selloff "underscores the need to reconsider the Foot Locker acquisition."

The read-through. Other retailers got dragged down in sympathy, Burlington fell 4.65% (it reports Thursday) and BJ's Wholesale slipped 4.18%, but be careful reading too much into it. BJ's actually posted a strong beat last Friday. The Dick's wound looks self-inflicted and footwear-specific, not proof the whole consumer is rolling over.

Big Story 2: The Quiet Melt-Up Into Nvidia's Big Night

What happened. With the S&P inching toward records and the VIX sinking, the real action was under the surface: money piling into AI infrastructure names one day before Nvidia's earnings. Super Micro jumped 9.35%, CDW rose 7.74%, Lumentum gained 6.67%, and Bloom Energy added 6.58%. At the same time, the 10-year Treasury yield fell to 4.64%, and Communication Services and other rate-sensitive corners led.

Why it happened. Two things, and it's important not to confuse them:

  • Yields fell, but not because the Fed is about to cut. The drop was driven by a plunge in oil (US crude fell 3.45% to $82.08 as fresh Iran sanctions cooled war-premium fears) and soft economic data (new-home sales cratered 10.5% in July). Lower oil means lower expected inflation, which pulls bond yields down. The Fed itself is still leaning hawkish: minutes from its last meeting warned that "policy tightening would likely be necessary if inflation did not decline," and markets currently see the September meeting as a coin-toss between holding rates and hiking, a cut is essentially off the table.
  • The AI bid was mostly positioning plus company-specific news ahead of Nvidia. Super Micro got a lift from a new Cisco partnership to build "AI factories," and Lumentum was upgraded by Barclays. But the gravity well is Nvidia, which reports Wednesday after the close. Wall Street expects roughly $92 billion in quarterly revenue, double a year ago, and the whole AI trade is effectively hostage to whether that print, and the guidance with it, is good enough.

What people said. The pros are split between "the numbers will be great" and "great won't be enough." On Bloomberg Tech (Aug 21), Bloomberg Intelligence's Kunjen Sabani put it bluntly:

"We again expect decent beat rates, but I don't think that will be enough. It never has been for the market."

He said investors will fixate on three things: worries about Nvidia's "vendor financing" (Nvidia backstopping loans so customers can buy its chips), any sign China sales can restart, and the ramp of its next-generation Vera Rubin chips. On CNBC's Fast Money (Aug 21), Bernstein's Stacey Rask agreed the results "should be very, very good" as the Rubin cycle begins, pointing to a stunning target of "something close to $500 billion in data center revenues next year," but noted the stock has been a laggard: "I barely had any stocks actually go up the day after the print."

The bears are focused on how it's all being paid for. On the 20VC podcast (Aug 22), Insight Partners founder Jerry Murdoch, whose firm manages over $90 billion, warned that the AI buildout is running on unprecedented debt and complacency:

"Neoclouds right now, there's a whole bunch of them. I think at least half of them go away within 36 months."

Murdoch's caveat matters, though: he thinks the giants survive whatever comes. "If there is a dislocation, no one is better prepared to survive it than hyperscalers."

Big Story 3: Moderna Rockets 14% on a Cancer-Pipeline Vote of Confidence

What happened. Moderna (MRNA) surged 14.36% to $158.83 on more than 37 million shares (nearly triple its normal volume), the day's standout large-cap gainer.

Why it happened. It was an analyst-driven re-rating, not fresh data on the day. Wolfe Research upgraded the stock to "Peer Perform" from "Underperform," citing a clearer path forward for intismeran autogene, Moderna's individualized cancer therapy developed with Merck, following strong late-stage melanoma (skin cancer) results. That followed Barclays' Eliana Merle more than doubling her price target the prior morning, to $125 from $48.

What people said. Wolfe's Alexandria Hammond said the melanoma data create a "much clearer regulatory path forward for Moderna and Merck to get intismeran approved," and argued the odds of success for its other cancer programs "increase as a result." Wolfe pegs peak sales across the therapy's four lead cancer indications at roughly $9.2 billion, with full trial data due at a major oncology conference in October. One honest note from Hammond: much of the stock's run reflects "the investor-driven narrative" as much as the science.

Quick Hits

  • Crypto and brokers ripped higher. Robinhood (+8.17%), Futu (+8.48%) and Freedom Holding (+8.65%) all jumped as Bitcoin pushed back above $77,000 and traders bet on friendlier crypto rules. President Trump publicly urged Congress on Aug 21 to pass the "Clarity Act," which would divide crypto oversight between the SEC and CFTC.
  • Deal of the day: McKesson agreed to buy Precision Medicine Group for about $2.25 billion in cash, deepening its push into cancer-care services. Smaller deals included Valley National Bancorp buying Providence Financial (~$247 million) and Nayax acquiring IPS Group ($350 million).
  • Industrials were the worst sector (-1.11%) after Trump said Aug 24 that tariffs on Canadian cars, trucks and steel will jump to 50% starting Jan 1, 2027, and Canada suspended trade talks. Dycom was a notable laggard, down 7.65%.
  • Energy sagged (-0.68%) as oil tumbled. US crude fell 3.45% to $82.08 and Brent dropped 3.33% to $89.10, both one-week lows, as markets read new US sanctions on Iran as replacing the threat of military escalation, deflating the war-risk premium.
  • The economic data leaned soft. New-home sales fell 10.5% in July to a 607,000 annual pace, the lowest since January; the Conference Board's consumer-confidence index slipped to 89.4, a seven-month low. One bright spot: Case-Shiller home prices rose 2.1% year-over-year in June, a touch better than expected.
  • Cybersecurity software wobbled ahead of and around results, with Zscaler down 4.34% and Rubrik off 5.50%.
  • Commodity chemicals slid with oil: Albemarle -5.89%, Dow Inc. -4.07%, LyondellBasell -4.06%.
  • On deck this week: Nvidia's earnings Wednesday after the close, durable-goods orders Wednesday morning, and the Fed's Jackson Hole gathering, a trio that will set the tone into month-end.