Everything to Know about Macro and Markets
Stocks closed the week in the red as Friday’s sell-off nudged the indexes down from record-high territory. The Dow Jones Industrial Average (DJIA) was down 0.19%, while the S&P 500 (SPX) logged a 0.10% weekly loss. The tech large-cap benchmark Nasdaq-100 (NDX) fell 0.35%, weighed down by a sell-off in Nvidia (NVDA) and other AI names, along with broad semiconductor stocks.
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Beware of September
Markets logged another turbulent week, moving between new highs and risk aversion. The S&P 500 reached intraday and closing records Tuesday through Thursday, but Friday brought an abrupt end to the party spurred by optimism over impending rate cuts. Stocks that led indexes higher earlier – tech megacaps, semiconductors, and cyclicals – sold off. This resulted in a softer performance to conclude the week, but the S&P 500 and the Dow still managed to lock in a fourth straight month of gains, while the Nasdaq rose for the fifth month in a row in August.
Still, weakness going into the long weekend – with markets closed on Monday for Labor Day – may stick around for a while, coming right before what is perceived as the worst month in the year for stocks. Historically, September trading has been punctured by both institutional investors rebalancing their portfolios and retail trading reaching its annual low, while corporations are forced to cool their buybacks before the next earnings season.
While “past performance is not indicative of future results,” options market positioning shows traders are already getting more cautious in the near-term. And who can blame them? While quarterly rebalancing and buyback freezes are quarterly constants, individual investors are a relatively new force on the markets, with their influence roughly tripling from the pre-pandemic era.
Retail investors now command about a third of total trading volumes in U.S. markets, compared with around 10% in 2018. So, when retail investors return from holidays and reassess positions, with portfolio rebalancing and profit-taking on the surge, this influences the broad markets three times more than in the past. Add multiple all-time highs to the picture – led by a relatively narrow set of stocks with high valuations – and you’ve got a recipe for volatility.
All Eyes on Macro
With the earnings season now officially locked in following Nvidia’s earnings release, economic data is retaking markets’ attention. The July PCE inflation report did little to shake the widespread September rate-cut expectations, as both headline and core PCE came in line with expectations and confirmed only a modest increase from previous months. The print confirmed that tariffs have yet to meaningfully filter into consumer prices, despite a recent increase in producer inflation.
Bets on a September cut grew sharply after Fed Chair Jerome Powell signaled a more dovish stance at Jackson Hole, citing recent cooling in the labor market. Policymakers held rates steady this year, citing worries that Trump’s higher tariffs could rekindle inflation – but gradual weakening of one of their two mandates, jobs, seems to have tilted the scale.
Incoming data continued to muddy the picture for the central bank. The second GDP growth estimate indicated that the economy expanded at a 3.3% annualized pace in the second quarter, above the initial estimate of 3% growth. However, economists expect that slowing job growth – acknowledged by Powell in his remarks – won’t be able to support the fast economic expansion for much longer, adding fuel to rate-cut calls even though inflation remains a notable risk.
While consumer spending rose in July by the most in four months, August’s consumer sentiment index declined more than expected, and the consumer expectations component dropped to its lowest since May. Moreover, both 1-year and 5-year inflation expectations inched up in August, reflecting continued household worries – despite a second month in a row of strong increases in personal incomes.
Still, analysts overwhelmingly predict a 25 bps rate cut barring a strong upward surprise in the upcoming unemployment report, which will be one of the key factors determining the Fed’s easing pace this year – and likely next.
Stocks That Made the News
▣ Nvidia (NVDA) beat on top and bottom lines, delivering revenue growth of 56% year-over-year to $46.7 billion. Still, the AI leader sold off heavily, as investors fretted about growth outlook. The beats were narrower than before, and Nvidia’s all-important data center business – responsible for the overwhelming majority of revenue – modestly missed some analyst expectations. Doubts about the fate of Nvidia’s China business amid the U.S.-China trade war further weighed on sentiment. This, despite optimistic Q3 outlook – with revenue expected to surge to $54 billion even without including H20 China sales. Interestingly, besides AI chips, Nvidia’s Q2 growth was driven by its gaming division (with revenue up 49%) and its asset management arm that saw a massive income boost thanks to CoreWeave’s rally.
▣ Marvell Technology (MRVL) stock plunged after reporting data center revenue below expectations and posting disappointing guidance for the current quarter, leading losses in the sector. Concerns over the company’s AI growth prospects led analysts to downgrade the stock and reduce price targets.
▣ Dell Technologies (DELL) fell despite topping estimates, as weak current-quarter profit margin guidance on AI server sales largely overshadowed strong earnings. Still, the company reported strong AI momentum, projecting strong growth in AI server revenue for fiscal 2026. Analysts remain optimistic about Dell’s position in the AI market, with price target upgrades reflecting confidence in its growth prospects.
▣ Super Micro Computer (SMCI) dropped as the liquid-cooling champion was weighed down by broader market tech weakness and its apparently unresolved compliance and reporting issues. SMCI warned it still hasn’t fully fixed the accounting issues that nearly got it delisted from Nasdaq back in February.
▣ Autodesk (ADSK) was one of the few bright spots in the large-cap tech with a surge of almost 10% on the week. The professional software giant clocked strong quarterly earnings and raised its fiscal 2026 revenue guidance, driven by strong cloud and AI strategies.
▣ S&P 500’s tech-sector gains were led last week by Snowflake (SNOW), which soared nearly 23%. The AI data cloud provider posted better-than-anticipated results and boosted its guidance as it added more customers.
▣ Among tech megacaps, the strongest performance was seen at Alphabet (GOOGL) with a surge of over 6% on the week. The company’s shares continued to be lifted by enthusiasm about its AI advancements, particularly its Google Gemini AI model, which investors see as gaining ground against competitors like OpenAI’s ChatGPT. The announcement of the new Google Pixel 10 series and associated AI features at the “Made by Google 2025” on August 20 showcased Google’s AI leadership in consumer hardware and strengthened investor confidence in Alphabet’s AI-driven growth narrative, providing a fresh catalyst for the stock.
Upcoming Earnings and Dividend Announcements
The Q2 2025 earnings season is nearly over, but several notable releases are still scheduled for this week. The highlight of the week will be Broadcom’s (AVGO) earnings release, scheduled for September 4. Other notable reports are coming from Zscaler (ZS), Salesforce (CRM), Hewlett Packard Enterprise (HPE), Dollar Tree (DLTR), Lululemon Athletica (LULU), DocuSign (DOCU), Ciena (CIEN), and Samsara (IOT).
Ex-dividend dates are coming this week for Realty Income (O), Lockheed Martin (LMT), McDonald’s (MCD), Nike (NKE), Halliburton (HAL), Home Depot (HD), Qualcomm (QCOM), PepsiCo (PEP), Bank of America (BAC), among other dividend-paying firms.
For additional exclusive market insights and content from TipRanks Macro & Markets research analyst Yulia Vaiman, click here.