Reddit gets called up to the big leagues 📈

Welcome back to the Day Trading newsletter 📈

The S&P 500 touched an all-time high of 7,816.70 on Thursday before closing at a record 7,798.99, then gave a little back Friday as shoppers and consumers flashed warning signs.

Meanwhile, Reddit got the phone call every public company wants.

Let’s get into it 👇️ 

📆 Monday 8/17 — Empire State Manufacturing Index (8:30am ET): First regional factory read of the month, with forecasts near 10.2 against July's 15.6. After Friday's soft consumer data, another cooling print strengthens the case for the Fed to stay on hold.

📆 Tuesday 8/18 — Reddit joins the S&P 500 (before the open) + Home Depot earnings (before the open): Index funds do their forced buying in Reddit. Home Depot offers the first real look at whether July's spending slowdown reached big-ticket home projects.

📆 Wednesday 8/19 — FOMC minutes (2pm ET): Detail from the July 28-29 meeting, where the Fed held rates at 3.50%-3.75% on a 9-3 vote. Beth Hammack, Neel Kashkari, and Lorie Logan all dissented in favor of a quarter-point hike — the first three-person directional dissent since 2016. Watch how seriously the rest of the committee took them.

📆 Wednesday 8/19 — Target and Lowe's earnings (before the open): Two more windows into the consumer, with Target especially exposed to the discretionary pullback the retail sales report just flagged.

📆 Thursday 8/20 — Walmart earnings (before the open): The biggest consumer read of the week. Walmart's commentary on trade-down behavior is the closest thing markets get to a real-time household budget survey.

🛒 U.S. retail sales unexpectedly fell 0.6% in July, the first decline in nine months and the largest in 14. Economists polled by Reuters had penciled in a 0.1% gain. Motor vehicle and parts dealers (-1.8%) and online sellers (-2.2%) led the drop, with total sales at $763.6 billion. Households are pulling back as prices stay elevated.

📉 Consumer sentiment slid to 51.0 in August, well under the 54.5 economists polled by Reuters expected and down from July's final 55.2. Survey director Joanne Hsu flagged an 11% drop in short-run business expectations. Year-ahead inflation expectations ticked up to 4.3% from 4.2% as the Iran conflict pushes fuel and food costs higher.

📊 Applied Materials fell about 5% on Friday despite beating on both earnings and revenue. Fiscal Q3 EPS of $3.50 topped the roughly $3.39 consensus on record revenue of $9.12 billion, and the company guided Q4 revenue to about $10.25 billion. Investors balked anyway, citing stretched expectations, margin pressure, and China sliding to 28% of sales from 35%.

🔐 Broadcom dropped about 6% Friday on reports of an actively exploited VMware vCenter security flaw, compounding profit-taking ahead of its September 2 earnings report. Bank of America had already trimmed its credit view on the stock Tuesday over the debt its new AI compute-financing platform could eventually carry.

🛢️ Brent crude climbed 1.67% Friday to settle at $88.52 a barrel, capping a weekly gain of 6%. The UAE accused Iranian forces of drone strikes on two ADNOC tankers in the Strait of Hormuz on Thursday, calling the attacks piracy, and Washington said its naval blockade of Iranian ports could run indefinitely. Higher crude feeds straight into the inflation numbers.

💰️ Nu Holdings closed up about 10% Friday after quarterly net income topped $1 billion for the first time. The Brazil-based digital bank earned $1.06 billion in a record second quarter, up from a prior peak of $895 million. It's a reminder that the growth story in consumer finance is increasingly happening outside the U.S. and outside branch banking.

⬇️ Bitcoin slipped below $63,000 on Friday after a soft producer-price reading failed to spark a bid, as U.S. spot bitcoin ETFs extended a run of outflows. The token now trades roughly 50% below the record $126,198 it set in October 2025. This cycle's selling has been institutional — ETF redemptions and rotation into AI names — rather than retail panic.

🥇 Gold headed for a weekly loss Friday as investors took profits on an inflation-driven rally, even with prices up roughly 8% so far this month. Bullion reached its highest level since early June on Thursday before reversing, and still sits about 20% below the record it set in late January. Softer inflation data has traders trimming September rate-hike bets.

S&P Dow Jones Indices announced after Thursday's close that Reddit will join the S&P 500 before the opening bell on Tuesday, August 18.

Shares rose about 11% in extended trading Thursday, spiked to roughly $182 shortly after Friday's open, and finished the session at $178.09 (up 12.6% on the day).

Reddit takes the slot vacated by AvalonBay Communities, the apartment REIT leaving the index because it's merging into Equity Residential — a $69 billion enterprise-value, all-stock deal announced in May that the companies expect to close in the second half of this year.

Index inclusion is a forced-buying event.

Every fund tracking the S&P 500 (Vanguard's VOO, BlackRock's IVV, the Fidelity and Schwab index funds sitting in millions of 401(k)s) has to own the stock, whatever it thinks of the business.

J.P. Morgan analysts estimate those funds will need to buy roughly 16.7 million Reddit shares. That's nearly three times the stock's average daily trading volume of about 5.98 million shares since its March 2024 IPO, according to LSEG data.

Reddit walks into the index as a wounded stock, down 31% this year through Thursday's close.

Its July 30 earnings report showed global daily users up 18% to 130.3 million, but U.S. daily users up just 6% to 53.2 million as choppy search-engine referrals hit traffic.

Friday's rally lifted its market value to roughly $34 billion, still among the smaller members of the index.

What to watch:

Whether the pop sticks. Stephens analyst Melissa Roberts notes that new S&P 500 additions have historically outperformed the benchmark between announcement and inclusion, with the biggest gains landing the day after the news, but they typically give some back afterward, lagging the index by about 2% over the following three months.

Tesla ran up roughly 70% between its announcement and the day it entered the index in December 2020.

Workday popped 9% on its inclusion news that same month in 2024, then slid 19% from that peak over the following six months.

Tuesday's open will tell you which script this one is following.

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⚠️ Disclaimer: Not financial advice. Do your research before making any trades.