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Happy Wednesday afternoon to everyone on The Street. Here's a snapshot of where markets ended the trading session, plus tomorrow's trade idea delivered to you today.

• 🟩 | US stocks fell Wednesday. The Nasdaq Composite dropped 1% due to declines in Nvidia as investors awaited the chipmaker's earnings report, while the S&P 500 and Dow Jones fell 0.6% and 0.4%, respectively.

• 📈 | One Notable Gainer: Chewy's stock surged 11% after the company reported second-quarter profits that exceeded expectations, driven by increased average customer spending on pet products.

• 📉 | One Notable Decliner: Super Micro Computer’s shares fell 19% after missing its annual report deadline and facing Hindenburg Research's accounting manipulation claims.

• ✂️ | Tomorrow's Trade: Banking on a Rate Cut. Scroll down for more.

Plus, get unbiased, Walter Cronkite style reporting with 1440.

MARKET MOVERS

NVIDIA, Abercrombie & Fitch, Trump Media

NVDA (-2%) All eyes are on Nvidia, and its earnings are out — here are the numbers (CNBC)

ANF (-17%) Abercrombie & Fitch lifts sales forecast on trendy apparel demand; lofty expectations hit shares (Reuters)

DJT (-4%) What's Going On With Trump Media & Technology Stock After New Indictment Against Donald Trump? (Benzinga)

NBIX (-19%) Neurocrine shares slump on Phase 2 results for schizophrenia treatment (Investing.com)

AVAV (+9%) Drone Maker Stock Flies On A Near-$1 Billion U.S. Army Contract; Analysts Cheer (Investor’s Business Daily)

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OVERHEARD ON THE STREET

Bloomberg: Apple Inc. is eliminating around 100 jobs in its digital services group, including positions in Books and News apps, due to a shift in priorities.

AP: Two workers were killed and another injured in a tire explosion at a Delta Air Lines maintenance facility near Atlanta.

Reuters: The NTSB is investigating a Tesla electric semi-truck crash and fire on a California highway with the California Highway Patrol.

Axios: California's SB 1047, imposing new AI rules, has split the tech world amid a lack of U.S. federal regulation compared to Europe's proactive stance.

The Verge: GM and Samsung SDI's $3.5 billion Indiana battery plant will start at 27GWh, expandable to 36GWh.

TOMORROW’S TRADE IDEA, TODAY

Banking on a Rate Cut

Buffett’s Bank Run

There is no shortage of investing axioms out there, but some investors adhere to a single, simple one: do whatever Warren Buffett does. After all, Buffett’s investment success has made him the tenth-richest man in the world.

So when Warren Buffett’s Berkshire Hathaway (BRK.B) recently began offloading large chunks of its long-held Bank of America (BAC) position, many other market observers quickly followed suit. As it turns out, Buffet’s company surpassed a market cap of $1 trillion for the first time on Wednesday.

Nevertheless, that same success has also put Buffett in a very different position from the average retail investor — and given Berkshire a much different time horizon.

Buffett may see a reason to distance himself from the equity long-term. But other analysts suggest BofA could be one of the best-performing bank stocks in the immediate future.

Interest Rate Cuts: Barrier or Boon?

Fears of a recession are looming over many assets, but BofA may be well-positioned, should one occur. The Federal Reserve recently conducted a stress test for a dramatic economic slowdown. BofA’s loan losses came in at just 5.5%, well below the average of 7.1%. 

While a recession is unlikely, rate cuts are all but guaranteed at this point, with investors unanimously pricing in a cut at the Fed’s September meeting, per the CME FedWatch tool.

While rate cuts would take a chunk out of BofA’s loan income, its enormous bond holdings could become very valuable. Additionally, older fixed-rate loans that mature, as well as cash-flow swap hedges against falling interest rates, may help to offset rate cuts by boosting net interest income.

The Bottom Line

These factors could drive a roughly 5% boost in BofA’s net interest income next year, according to S&P Global’s Visible Alpha. Meanwhile, the bank’s peers are expected to see a much smaller increase — or an outright decline.

Some of this may already be priced into the market. But the analysis suggests uncertainty regarding interest rates is still high enough to make the stock undervalued. 

The stock is currently trading for less than 11 times 2025 earnings, a slight discount to its peers, according to FactSet. So the bank’s bulls may not need to fear interest rates — or Warren Buffett.

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For Those Who Seek Unbiased News.

Be informed with 1440! Join 3.5 million readers who enjoy our daily, factual news updates. We compile insights from over 100 sources, offering a comprehensive look at politics, global events, business, and culture in just 5 minutes. Free from bias and political spin, get your news straight.

Join for free today!

ON OUR RADAR

CNN: Pizza Hut is giving customers in select cities a free mini table with the purchase of a large regular-priced pizza.

CNBC: U.S. researchers visited South Korea's Sangdong Mine, which may soon supply 50% of the world’s tungsten, challenging China’s 80% dominance.

ESPN: NFL owners approved institutional investors buying up to 10% of franchises, with no voting rights, in a 31-1 vote.

Axios: Pumpkin spice returns to Dunkin' on Wednesday, its first fall menu release in seven years, and arrives six days after Starbucks' early PSL debut.

CNBC: Environmental advocates allege Elon Musk's xAI is illegally powering its Memphis data center with gas turbines, exacerbating severe air pollution.

YESTERDAY’S POLL RESULTS

Are you bullish or bearish on LVMH (LVMUY) over the next 12 months?

🟨🟨🟨⬜️⬜️⬜️ 🐂 Bullish

🟩🟩🟩🟩🟩🟩 🐻 Bearish