Posts made in August 2025

Stocks were mixed last week despite a powerful Friday rally sparked by Federal Reserve Chair Jerome Powell, who opened the door to adjusting short-term interest rates.

The Standard & Poor’s 500 Index picked up 0.27 percent while the Nasdaq Composite Index lost 0.58 percent. The Dow Jones Industrial Average rose 1.53 percent. The MSCI EAFE Index, which tracks developed overseas stock markets, increased 0.80 percent.^1,2

All Eyes on Powell

Stocks traded in a narrow band to start the week as investors awaited fresh economic data and comments from Fed officials at their annual symposium in Jackson Hole, Wyoming.

After a big retailer reported quarterly results on Tuesday and gave encouraging guidance, stocks pushed higher. But markets took a breather later in the day as pressure on megacap tech and chipmakers led the Nasdaq and the broader market lower.³

The S&P 500 and Nasdaq fell after minutes from the Federal Reserve’s July meeting were published; they revealed that most Federal Open Market Committee (FOMC) members were more concerned about inflation than the job market.⁴

On Friday, markets rebounded after Fed Chair Powell opened the door to a rate move at the Fed’s September meeting. The day’s gain was strong enough to regain the week’s lost ground for the S&P and nearly all of it for the Nasdaq—and put the Dow solidly ahead for the week.⁵

Watch the Rotation

Investors appeared to rotate out of megacap tech as some expressed concern about valuations and the durability of the AI-driven rally. Two facts helped support this observation: the S&P fared better than the tech-heavy Nasdaq for the week, and the Russell 2000 Index of small-cap stocks (+3.25 percent) beat all three major stock averages.⁶

The Federal Reserve also rotated a bit. In contrast to the Fed’s July meeting—where inflation was the bigger concern for most Committee members—Fed Chair Powell’s Friday morning speech at Jackson Hole revealed the FOMC was now more concerned with the jobs market.⁷

Footnotes and Sources

1. ^{WSJ.com, August 22, 2025}
2. ^{Investing.com, August 22, 2025}    
3. ^{CNBC.com, August 19, 2025}
4. ^{CNBC.com, August 20, 2025}
5. ^{MarketWatch.com, August 22, 2025}
6. ^{WSJ.com, August 22, 2025}
7. ^{WSJ.com, August 22, 2025}

Stocks rose last week despite mixed signals on inflation as investors kept one eye on the Fed’s September meeting.

The Standard & Poor’s 500 Index advanced 0.94 percent, while the Nasdaq Composite Index added 0.81 percent. The Dow Jones Industrial Average rose 1.74 percent. The MSCI EAFE Index, which tracks developed overseas stock markets, increased 2.16 percent.^1,2

Third Gain in Four Weeks

Stocks posted modest losses to start the week as investors braced for July consumer inflation reports. The White House’s executive order on Monday extending the tariff deadline for China by 90 days failed to move markets in the other direction.³

Stocks then staged a two-day rally following the latest Consumer Price Index (CPI) report, which showed July inflation held steady over the prior month—beating expectations. The inflation news led some investors to move into small-cap stocks, with the Russell 2000 Index of small-cap stocks rising 5 percent over Tuesday and Wednesday.⁴

However, markets slipped Thursday as investors dug into the Producer Price Index (PPI) for July, which showed wholesale inflation hit a 3-year high last month; this was the third weekly gain in the past four weeks for each of the three major averages; the S&P and Nasdaq advanced four of the last five weeks.^5,6,7

A Mixed Inflation Story

Inflation continues to give mixed signals, which can unsettle investors who anticipate the Fed adjusting rates at its September meeting.

Last week’s CPI report showed that “headline” (retail) inflation held steady. Stocks rose in response, even though core inflation—excluding volatile food and energy prices—was hotter than economists expected.

Two days later, the PPI report revealed that inflation began to creep into wholesale prices in July. Stocks fell in response as investors processed the conflicting reports.^8,9

Footnotes and Sources

1. ^{WSJ.com, August 8, 2025}
2. ^{Investing.com, August 8, 2025}  
3. ^{MarketWatch.com, August 4, 2025}
4. ^{CNBC.com, August 5, 2025}
5. ^{CNBC.com, August 6, 2025}
6. ^{WSJ.com, August 7, 2025}
7. ^{WSJ.com, August 8, 2025}
8. ^{WSJ.com, August 5, 2025}
9. ^{Advantage.FactSet.com, August 1, 2025}

Stocks rebounded last week as investor optimism for a September rate adjustment and strong Q2 corporate results overcame the rollout of fresh tariffs.

The Standard & Poor’s 500 Index rose 2.43 percent, while the Nasdaq Composite Index gained 3.87 percent. The Dow Jones Industrial Average added 1.35 percent. The MSCI EAFE Index, which tracks developed overseas stock markets, increased 2.77 percent.^1,2

Stocks Gyrate

Stocks pushed higher to start the week, with major averages gaining between 1.3 percent and 2 percent—their best day since May. Investors seemed more optimistic for a rate move after the weaker-than-expected July jobs report.^3,4

Stocks rose again midweek after the White House confirmed a mega-cap tech company would invest $500 billion more in domestic manufacturing. News of additional tariffs on India was greeted with a muted reaction from investors.⁵

The updated tariffs previously announced by the White House went into effect on Thursday. Markets initially rose in early trading but then came under pressure as the day continued.⁶

But the S&P and Dow rose again on Friday, ending the week with solid gains. The tech-heavy Nasdaq ended the week with a record close.⁷

Economy Watch

Services comprise 70 percent of the economy, so Wall Street closely monitors the Institute for Supply Management’s Services Index.

So, news on Tuesday that growth in services came below economists’ expectations was a bit of a concern. However, investors seemed to quickly look past the number and focus more on the 122 S&P 500 companies that reported earnings last week.^8,9

Footnotes and Sources

1. ^{WSJ.com, August 8, 2025}
2. ^{Investing.com, August 8, 2025}  
3. ^{MarketWatch.com, August 4, 2025}
4. ^{CNBC.com, August 5, 2025}
5. ^{CNBC.com, August 6, 2025}
6. ^{WSJ.com, August 7, 2025}
7. ^{WSJ.com, August 8, 2025}
8. ^{WSJ.com, August 5, 2025}
9. ^{Advantage.FactSet.com, August 1, 2025}

Stocks fell last week as investors assessed progress on trade negotiations, new U.S. tariffs, and fresh data on the U.S. economy.

The Standard & Poor’s 500 Index fell 2.36 percent, while the Nasdaq Composite Index declined 2.17 percent. The Dow Jones Industrial Average dropped 2.92 percent. The MSCI EAFE Index, which tracks developed overseas stock markets, lost 2.95 percent.^1,2

Action-Packed Week

Stocks largely went sideways over the first half of the week as investors waited for more Q2 corporate results, fresh economic data, and the Fed decision.

The U.S.-E.U. trade agreement announced over the weekend had a muted impact on the market as the week began. Stocks then retreated as China trade talks appeared to stall, with the Dow declining the most of the three major averages through midweek.^3,4

Stocks gained on Wednesday morning after the latest gross domestic product (GDP) report showed consumer spending powered the economy back to 3 percent annualized growth in Q2. That afternoon, the Federal Reserve announced they were holding rates steady, which put some pressure on stocks.⁵

Selling pressure continued on July’s final trading day as investors continued to fret about the Fed’s next move. The Personal Consumption and Expenditures (PCE) Index—the Fed’s favored inflation metric—showed a June uptick in core goods prices, unsettling investors.⁵

Stocks were under pressure from the opening bell on Friday as investors sorted through fresh tariff announcements from the White House, a softer-than-expected July jobs report, and mixed Q2 corporate reports from two megacap tech names.^6,7

Mixed Economic Signals

There was a trove of economic data for investors to parse last week.

First, there was economic growth. While 3 percent GDP growth in Q2 is a solid step up from a 0.5 percent contraction in Q1, consumer spending largely drove the increase, offset by slower business spending—especially investment in equipment and buildings.⁸

The PCE report showed why the Fed remains focused on inflation. Finally, Friday’s jobs report pointed to a slowdown in hiring in July. A bit more concerning was that the jobs data from prior months were revised lower.

The Fed has no meeting in August, with three other meetings scheduled for 2025.

Footnotes and Sources

1. ^{WSJ.com, August 1, 2025}
2. ^{Investing.com, August 1, 2025}
3. ^{CNBC.com, July 28, 2025}
4. ^{CNBC.com, July 29, 2025}
5. ^{WSJ.com, July 31, 2025}
6. ^{MarketWatch.com, August 1, 2025}
7. ^{WSJ.com, August 1, 2025}
8. ^{WSJ.com, July 30, 2025}