Happy Friday, investors. Nvidia didn’t move markets as much as consensus expected, and maybe today’s PCE inflation report won’t jar investors either. Before we get to that, we’re turning to the health of the consumer — as told by stock investors.
Stretching dollars
Budget-friendly retailers are having a banner year and that’s not a good sign for everyday Americans.
Dollar General reported quarterly results Thursday that reinforced the trend, beating expectations across the board.
Both Dollar General and Dollar Tree are up nearly 50% year-to-date, handily beating the S&P 500 and Nvidia, the name at the center of the AI boom.
That’s good news for shareholders, yet it does underscore how more consumers are looking to stretch their dollars after years of compounding inflation and high interest rates.
The pair of dollar stores have similarly outperformed other retailers including Kohl’s, Walmart, TJX, Target and even Amazon.
All this points to a broad flight to value for shoppers.
Ultra-discounted stores have thrived while traditional big-box retailers plus the world’s favorite online retailer have lagged.
Depending who you ask, some commentators believe the economy — and so, the consumer — remains in good shape.
And certain pockets of data confirm that view, such as still-solid retail sales.
Chart courtesy of Exhibit A
That said, large pools of capital are betting on sustained outperformance by companies that benefit most from cash-strapped consumers.
If shoppers are trading down from Walmart and Amazon — options that many consider “budget-friendly” as is — for even cheaper stores, that highlights tight household and shrinking discretionary spending.
Chart courtesy of Exhibit A
Now, Dollar General and Dollar Tree emerging as standout stocks isn’t a foolproof recession indicator.
But when investors are effectively betting on the ongoing strain for low- and middle-income consumers, it’s worth paying attention.
Market snapshot
Today’s letter is brought to you by BitcoinIRA!
Why smart investors use BitcoinIRA:
Tax Savings: When you trade in an IRA, you don't have to pay capital gains taxes that can be as high as 37%
Top-Level Security: Assets are custodied with a US based custodian and insured up to $250M²
World Class Customer Service: BitcoinIRA has a team of IRA specialists that will help guide you through every step of the process
P.S. As an Opening Bell Daily reader, you can earn up to $500 in rewards* when you add funds to your account.
Elsewhere
🚀 The S&P 500 closed above 6,500 for the first time ever. Nvidia’s earnings were taken in stride during the trading session and the index notched its 19th all-time high of the year. It still has a long way to go to catch the 57 records it saw in 2024.
🏦 Fed Governor Lisa Cook sued Trump and the Fed to keep her job. She did not explicitly deny the mortgage fraud allegations in the lawsuit, though she alleged the president violated his executive authority in trying to fire her. (Yahoo Finance)
📈 The economy grew more than expected last quarter. GDP expanded at 3.3% in the second quarter, seasonally-adjusted, according to the Commerce Department. That’s above the prior estimate for 3.0%, and the uptick stems from strong investment and consumer spending. (Bloomberg)
Rapid-fire
Prediction markets see 45% odds for exactly two cuts in 2025 (Kalshi)
Young software engineers face an existential job market, Stanford data shows (Blog)
Snowflake stock surged more than 22% after the cloud company beat on earnings and shared upbeat guidance (Barron’s)
The EU proposed plans to lower tariffs on a range of US products (WSJ)
Best Buy stock shares drop 3.7% after beating earnings expectations but raising tariff concerns (Yahoo Finance)
Trump fired the CDC Direction too but she’s not refusing to step down (Barron’s)
Pure Storage stock jumped 30% to a record high after strong earnings stemming from its recent deal with Meta (CNBC)
Copy the trades of world-class investors
The best fund managers outperform the S&P 500 for a reason. We give our Best Ideas Club members direct access to their highest-conviction stock picks.
Our Best Ideas Club portfolio has nearly doubled the S&P 500 so far this year.
Last thing
Cook also suing the Board and any Governor that tries to remove her - so she wants to stay during the process.
Also no denial of the allegations, which looks to be substantiated. Recall Powell has fired Fed presidents for things that are not illegal but damage Fed's reputation.
— #Joseph Wang (#@FedGuy12)
2:32 PM • Aug 28, 2025
About me
📰 I’m Phil Rosen, co-founder and editor-in-chief of Opening Bell Daily. I’ve published books, lived on three continents, and won awards for my journalism, which has appeared in Business Insider, Fortune, Yahoo Finance, Bloomberg and Inc. Magazine.
I write our flagship newsletter to prepare you for each trading day — unpacking markets, economic data and Wall Street with analysis you won’t find anywhere else.
Feedback? Reply to this email, ping me on X @philrosenn, or write me directly at [email protected].