Stocks ended the week on a soft note, still managing to lock in back-to-back weekly gains. The S&P 500 (SPX) rose 0.94% for the week, and the Nasdaq-100 (NDX) inched up 0.43%. The Dow Jones Industrial Average (DJIA) was the standout, delivering a weekly gain of 1.74%.
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After a red Monday, all three major indexes reached all-time highs on Tuesday. This followed in-line CPI data, which bolstered bets that the Fed would deliver its first rate cut of 2025 in September – traders have priced in nearly a 100% chance of a 25-bps easing. Stocks extended gains on Wednesday: the S&P 500 and Nasdaq hit new ATHs again amid remarks from Treasury Secretary Scott Bessent urging a 50-bps cut based on downward revisions in payroll data.
Wall Street analysts began forecasting up to three cuts this year, citing a softer labor market, limited tariff pass-through to consumers, and the appointment of Trump’s temporary Fed board pick. But those forecasts were questioned Thursday when PPI, which tracks wholesale price trends, came in hotter than expected, denting sentiment and clouding the Fed outlook.
Other economic reports pulled markets in opposing directions: July’s industrial production was lackluster – although not recession-bellwether weak – while retail sales beat forecasts, underscoring resilient consumer demand despite high borrowing costs. Meanwhile, the UoM consumer sentiment unexpectedly slipped and inflation expectations rose, muddying the outlook for Fed cuts in September.
With mixed inflation and consumer data re-injecting uncertainty into the Fed policy outlook, all eyes now turn to Jackson Hole for the annual confab. Jerome Powell’s speech on August 22 is the marquee event, expected to instantly influence markets. A dovish tone could broaden the rally, boosting small caps, rate-sensitive areas, and tech. A hawkish stance – highlighting inflation risks or caution – could trigger sharp corrections and volatility, especially in growth and rate-sensitive sectors.
Three Economic Reports
Here are three key economic reports that could affect your portfolio this week, in addition to the widely anticipated speech by Jerome Powell at the Jackson Hole Economic Policy Symposium. For a full listing of additional economic reports, check out the TipRanks Economic Calendar.
» August Philadelphia Fed Manufacturing Survey – Thursday, 8/21 – This report measures manufacturing conditions in the survey area (Philadelphia, New Jersey, and Delaware) and is considered an accurate leading indicator for two nationwide reports: the Manufacturing PMI and ISM Manufacturing Index.
» August S&P Global Manufacturing PMI and Services PMI (preliminary readings) – Friday, 8/22 – PMI indices are leading economic indicators used by economists and analysts to gain timely insights into changing conditions, as the direction and rate of change in PMIs usually precede shifts in the broader economy.
» July Existing Home Sales – Friday, 8/22 – This report tracks sales volumes and prices of existing single-family homes, condos, and co-ops nationwide. Existing homes account for over 90% of total U.S. home sales, making this a key measure of housing market health and its influence on overall economic activity.
For more exclusive market insights and content from TipRanks Macro & Markets research analyst Yulia Vaiman, click here.