Wednesday, August 19, 2026
Moderna Soars 90% on Cancer Vaccine Data as Wall Street Awaits Fed Minutes; Target's Beat Hides a Tariff-Refund Boost
Key Indicators
S&P 500
7,691.76
-53.30 (-0.69%) (down)Nasdaq Composite
26,289.71
-355.20 (-1.33%) (down)Dow Jones Industrial Average
53,343.40
-116.38 (-0.22%) (down)10-Year Treasury Yield
4.73%
+1 bp (up)VIX
15.84
+0.51% (up)WTI Crude Oil
$84.11
+0.06% (up)Market Recap
Chip stocks lead Tuesday's selloff as long-term yields hit fresh multi-year highs
U.S. stocks fell Tuesday as a sharp semiconductor selloff and another leg up in long-term Treasury yields outweighed strength in energy shares. The S&P 500 closed at 7,691.76, down 0.69%; the Nasdaq Composite dropped 1.33% to 26,289.71; and the Dow Jones Industrial Average slipped 0.22% to 53,343.40. The Philadelphia Semiconductor Index fell as much as 5%, with steep declines across memory and storage names — Sandisk dropped 9%, Seagate fell more than 9%, Western Digital lost 7%, and Marvell fell nearly 8% — as investors reassessed richly valued AI hardware stocks against a backdrop of rising borrowing costs. The 30-year Treasury yield pushed to a fresh 19-year high near 5.29%, while the 10-year yield edged up to about 4.73%. Buy-now-pay-later lender Klarna also plunged 18-22% after cutting its guidance.
Moderna soars ~90% premarket as its mRNA melanoma vaccine hits in a pivotal Merck-partnered trial
Moderna and Merck said their personalized mRNA cancer vaccine, intismeran autogene, combined with Merck's Keytruda, met its main goal in the Phase 3 INTerpath-001 trial of 1,137 patients with surgically removed high-risk melanoma — significantly extending the time patients lived without their cancer returning versus Keytruda alone, and reducing the risk it spread to distant organs. It's the first positive Phase 3 result ever for an individualized neoantigen cancer vaccine and for any mRNA-based cancer treatment. Moderna shares surged as much as 90% in premarket trading and Merck rose more than 8%, with analysts estimating an approved product could generate over $6 billion a year in melanoma sales alone, with larger potential if the approach works in lung, kidney, and bladder cancer. The companies said they plan to begin talking to regulators about approval in the coming months.
Target beats and raises guidance, but the headline EPS is inflated by a one-time tariff refund
Target reported fiscal Q2 sales of $26.54 billion, up 5.3% year over year and above the roughly $26.13 billion analysts expected, with comparable sales up 3.8% on a 3.6% rise in traffic and 8.7% digital comp growth. Reported EPS came in at $4.11, versus $2.05 a year earlier — but $994 million of pretax tariff refunds added $1.65 to that figure; excluding the refunds, EPS still rose roughly 20%. Target raised full-year EPS guidance to $9.90-$10.90 including the refunds ($8.25-$9.25 excluding them), up from a prior $7.50-$8.50 range. Despite the beat and raise, shares fell about 4% in premarket trading as investors focused on how much of the headline number was a one-time item rather than organic improvement.
Lowe's beats on EPS but misses on revenue and cuts full-year guidance as DIY spending stays soft
Lowe's posted adjusted Q2 EPS of $4.40, edging out the $4.38 analysts expected, but revenue of roughly $25.96 billion came in below estimates. The home-improvement retailer cut its full-year outlook to the bottom of its prior ranges, now guiding to about $92 billion in sales and flat comparable sales, down from a prior forecast of flat to up 2%. CEO Marvin Ellison pointed to a fifth straight quarter of positive comps driven by Pro, online, and home-services spending, but discretionary do-it-yourself spending remains under pressure. Shares fell roughly 2-3% in premarket trading on the guidance cut, a contrast to Home Depot's reaffirmed outlook a day earlier that suggested pro-contractor demand is holding up better than DIY renovation spending as elevated borrowing costs weigh on the housing market.
Trump pauses Canada tariffs as markets brace for this afternoon's Fed minutes
President Trump temporarily paused a threatened 50% tariff on a range of Canadian goods that had been set to take effect at midnight, saying the U.S. and Canada have a deal 'subject to the finalization of documents,' which removed one source of overnight uncertainty from futures markets. The bigger catalyst lands this afternoon: the Federal Reserve releases minutes from its July 28-29 meeting at 2:00 p.m. ET, the first detailed look at a rare three-way dissent, with regional presidents Logan, Hammack, and Kashkari all pushing for a 25-basis-point hike in a meeting Chair Kevin Warsh called a 'good family fight' that ended in a 9-3 vote to hold rates steady. Markets have since cut the odds of a September hike from roughly two-thirds three weeks ago to about 30-31%, based on data the committee hadn't yet seen when it met — meaning today's minutes will be read for how seriously the committee was weighing tightening before that data arrived.
Concept of the Day
Adjusted EPS and the Quality of an Earnings Beat
Adjusted (or 'non-GAAP') EPS strips out items management considers one-time or non-operational — restructuring charges, litigation settlements, or, as with Target this morning, a $994 million tariff refund — to show what earnings would look like from ongoing operations alone. Companies report it because GAAP earnings can be noisy quarter to quarter, and a clean, comparable number helps investors track the underlying trend. The catch is that management chooses what counts as 'one-time,' and there's no requirement that the adjustment cut against the company — a refund that flatters EPS gets flagged the same way a genuinely non-recurring restructuring charge would, even though one is free money that shows up once and the other is masking an actual cost. This is why sophisticated investors don't stop at the adjusted number — they ask what fraction of the beat came from the adjustment itself. Target's headline EPS of $4.11 looks like a blowout next to $2.05 a year ago, but $1.65 of that $2.06 increase — roughly 80% of the year-over-year gain — came from a single tariff refund that won't repeat next quarter. Back that out, and EPS still grew a healthy ~20%, which is a good quarter, just a much less dramatic one than the headline suggests. The gap between the two numbers is the difference between 'the business is fundamentally stronger' and 'the business got a one-time check in the mail.' This distinction is exactly why Target fell in premarket trading on a beat-and-raise. The market didn't punish the results — it repriced the quality of the results once it separated the recurring 20% growth from the non-recurring refund. A raised full-year guidance range that leans on the same refund tells investors even less about the trajectory of the underlying business than the quarter itself did, which is why professional investors instinctively reach for the ex-items number before reacting to a headline beat.
Why it matters
Today's slate is a live side-by-side lesson in earnings quality: Target's headline beat leaned heavily on a one-time item and the stock fell, while Lowe's delivered a narrower, cleaner EPS beat but got punished for a revenue miss and guidance cut — reminding investors that a 'beat' is only as good as what's driving it. The same instinct applies to reading today's Fed minutes: the real signal isn't the 9-3 headline vote, but how much of the committee's hawkishness was driven by data that's already stale, much like a one-time item that won't repeat next quarter.
What to Watch
Wed, Aug 19
FOMC minutes (July 28-29 meeting)
The first detailed look at a rare three-way dissent for a rate hike, key to gauging how close the Fed really came to tightening.
Thu, Aug 20
Walmart Q2 earnings
The week's broadest consumer-spending bellwether, landing the same day as weekly jobless claims.
Thu, Aug 20
Weekly initial jobless claims
A timely, weekly labor-market read that will be weighed against the Fed minutes for signs of cooling.
Fri, Aug 21
S&P Global flash U.S. PMI (Manufacturing, Services, Composite)
An early, forward-looking gauge of whether growth is holding up under higher long-term rates and oil prices.
Fri, Aug 28
Jackson Hole Economic Symposium — Fed Chair Warsh's keynote address
Warsh's first Jackson Hole speech as Fed chair, expected to frame longer-term policy thinking rather than near-term guidance.