Major U.S. indices were mixed—consolidating after a flood of economic data this past week. Much of the market’s strength has been driven by Mega Cap stocks, with top-heavy gains lifting the indexes. Market breadth is not weak: 61% of S&P 500 stocks are above their 50-day moving averages and 60% above their 200-day MAs. However, broad participation remains limited; only 24% of S&P 500 components have outperformed the index over the past 60 days, highlighting a stock pickers’ market.
Technically, the Dow, S&P 500, and Nasdaq all reached intraday all-time highs this week, which is bullish. Divergences, such as the S&P 500’s RSI lagging price gains, warrant attention but aren’t alarming.
Outlook
The trend remains modestly bullish, supported by strong earnings surprises, though some consolidation could appear next week if breadth fails to catch up with index gains.
Economic Headlines
Central Bankers Converge on Jackson Hole as Fed Faces Crucial Decisions
The Kansas City Fed’s annual Jackson Hole Symposium begins Thursday, drawing global policymakers at a moment of economic uncertainty. Fed Chair Jerome Powell is set to deliver a highly anticipated speech Friday, where he’s expected to outline the central bank’s new policy framework for managing inflation and employment.
Markets will watch closely for any clues about the Fed’s September meeting, as officials weigh how tariffs, stubborn inflation, and signs of labor market cooling should shape interest rate policy. While some policymakers argue for patience, others favor rate cuts, and Powell’s remarks could tip the balance.
Recent U.S. data has been mixed: consumer prices rose more than expected in July, wholesale inflation signaled pressure on businesses, and retail sales showed resilience despite weaker sentiment. Globally, the symposium offers a stage for central bankers to reaffirm independence amid political pressures and to compare notes on the impact of U.S. trade policy.
Beyond Wyoming, central banks from New Zealand to the UK face their own tests, with fresh inflation, retail, and manufacturing data expected to shape policy across Asia, Europe, and Latin America.
Trump to Host Zelensky in Washington Amid Ukraine Tensions
Donald Trump will host Ukrainian President Volodymyr Zelensky on Monday following the U.S. president’s decision to drop calls for an immediate ceasefire. The visit comes after Trump’s Alaska summit with Vladimir Putin failed to produce a breakthrough, with Putin renewing demands that Kyiv cede the Donbas region.
Trump signaled he would urge Zelensky to negotiate a deal, while European leaders stressed that any territorial decisions remain Ukraine’s. Zelensky has repeatedly rejected giving up Donetsk and Luhansk, and Russia continues military pressure, launching 85 drones and a ballistic missile overnight. The visit marks a pivotal moment in U.S.-Ukraine relations as Trump, Zelensky, and European allies navigate stalled peace talks.
Trade News
On the trade front, the most recent news is that President Donald Trump said he would set levies on semiconductors and steel in the coming two weeks. Trump suggested the charge on imported semiconductors could be 200% to 300% and mentioned a possible exemption for companies moving manufacturing to the US. In regard to steel, he already levied tariffs of 50% back in June, so it will be interesting to see what additional amounts, if any, could be on the horizon.
Earnings Wrap Up
Earnings are wrapping up for Q2 and continue to support of the bullish narrative, especially those coming from the technology sector. Out of the 459 S&P 500 companies that have reported, 69% have beaten on the top line with an 81% beat rate on the bottom line. Q2 revenue growth is currently tracking at 6.03% year-over-year with EPS growth coming in at 11.28% thus far.
Economic Data:
- Consumer Price Index (CPI): Rose by 0.2% m/m, inline with estimates. Core CPI rose by 0.3% m/m, also as expected. oth y/y figures were close to estimates (2.7% and Core 3.1%), with both diverging further from the Fed’s target of 2%.
- Producer Price Index (PPI): Rose by 0.9%, way above the estimates for 0.2% price growth. Core PPI was also up 0.9%. oth y/y figures far exceeded estimates (3.3% and Core 3.7), highest levels sinch March.
- Initial Jobless Claims: Decreased 2K to 224K versus last week’s 226K, and just below the 225K expected. Continuing Claims decreased 21K from last week to 1.953M, suggesting hiring may have picked up slightly.
- Retail Sales: Increased by 0.5%, slightly below expectations for 0.6%. Biggest gainer was Motor Vehicle and Parts Dealers, up 0.3% while biggest decliner was Building Material, down 0.05%.
- U. of Mich Consumer Sentiment: 58.6 vs. 62.0 expected.
- Current Conditions: 60.9 vs. 67.5 expected.
- 1 Year Inflation: 4.9% vs. 4.4% expected.
Crypto Highlights: Fed Ends Oversight Program as Market Surges
Crypto news was light this week, with two notable developments. The Federal Reserve announced it will wind down the Biden-era Novel Activities Supervision Program, which had increased scrutiny of banks’ involvement in digital assets—a move reflecting broader U.S. regulatory efforts to engage with the crypto industry. Meanwhile, the market saw strong gains in July, led by Ether, pushing total crypto market capitalization to $3.7 trillion, up 14% for the month, according to a JPMorgan research note.
What to Watch:
The biggest focus this week is likely Fed Chair Jerome Powell’s annual Jackson Hole speech on Friday morning. In past years, Powell has used the event to signal major policy shifts, and markets will be watching closely for clues on interest rates. Expectations for a September 17 rate cut are around 85%, down from near certainty before last week’s hotter inflation and economic data. Investors are also pricing in another cut later this year, with a reasonable chance of a third.
Economic Calendar:
- Monday (8/18): NAHB Housing Market Index
- Tuesday (8/19): Housing Starts, Building Permits
- Wednesday (8/20): Fed Minutes, MBA Mortgage Applications Index
- Thursday (8/21): Continuing Claims, Initial Claims, Philly Fed, S&P Global Manufacturing and Services PMIs, Leading Index, Existing Home Sales
- Friday (8/22): -nothing-
Earnings:
- Monday (8/18): Bitdeer Technologies Group (BTDR), Polestar Automotive Holdings (PSNY), Palo Alto Networks Inc. (PANW), Fabrinet (FN), XP Inc. (XP)
- Tuesday (8/19): Home Depot Inc. (HD), Medtronic PLC (MDT), Viking Holdings. (VIK), American Sports Inc. (AS), Xpeng Inc. (XPEV), Keysight Technologies Inc. (KEYS), ZTO Express (ZTO), Toll Brothers Inc. (TOL)
- Wednesday (8/20): TJX Companies Inc. (TJX), Lowes Companies Inc. (LOW), Analog Devices Inc. (ADI), Target Corp. (TGT), Estee Lauder Companies Inc. (EL), Baidu Inc. (BIDU), Futu Holdings Ltd. (FUTU)
- Thursday (8/21): Walmart Inc. (WMT), Intuit Inc. (INTU), Workday Inc. (WDAY), Ross Stores Inc. (ROST), Zoom Communications Inc. (ZM)
- Friday (8/22): Alibaba Group Holding (BABA), Gold Fields Ltd. (GFI), Ubiquiti Inc. (UI) BJ’s Wholesale Club Holdings Inc. (BJ)
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