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Stocks posted a solid gain last week, riding a rally in megacap tech stocks while overcoming interest rate anxiety, a downward revision to jobs data, and mixed inflation reports.

The Standard & Poor’s 500 Index rose 1.59 percent, while the Nasdaq Composite Index climbed 2.03 percent. The Dow Jones Industrial Average added 0.95 percent. The MSCI EAFE Index, which tracks developed overseas stock markets, gained 1.18 percent.^1,2

Stocks At New Highs

Stocks rose to start the week on renewed AI enthusiasm, with the Nasdaq hitting a new record intraday high. Stocks continued to push ahead on Tuesday despite fresh data showing large downward revisions to job creation for the 12 months through March.³

The rally continued midweek after an unexpected drop in wholesale inflation appeared to boost investors’ hopes for Fed rate moves before the year’s end.^4,5

Investors cheered Thursday’s consumer inflation report, anticipating that the reading wouldn’t be enough to derail a Fed rate move this month. The S&P and Nasdaq posted record intraday highs and closes three days in a row, while the Dow Industrials cracked 46,000 for the first time.⁶

The Nasdaq hit a new record close on Friday, while the S&P 500 flattened out and the Dow posted a modest loss on the week’s last day of trading.⁷

Fed Meets After Mixed Inflation Reports

Wednesday’s Producer Price Index (PPI) report showed wholesale prices fell 0.1 percent in August after a 0.7 percent increase in July. Then, on Thursday, fresh Consumer Price Index (CPI) data showed that retail prices rose a hotter-than-expected 0.4 percent in August—faster than July’s 0.3 percent gain.^8,9

All eyes will be on Fed Chair Powell this week. He is expected to outline his plan to adjust rates at the Fed’s scheduled two-day meeting, which ends on Wednesday, September 17. Investors will be looking for insights about how he plans to guide the economy through this period of sluggish job growth and stubborn consumer inflation.

Footnotes and Sources

1. ^{WSJ.com, September 12, 2025}
   
2. ^{Investing.com, September 12, 2025}  
3. ^{WSJ.com, September 8, 2025}
4. ^{CNBC.com, September 9, 2025}
5. ^{WSJ.com, September 10, 2025}
6. ^{CNBC.com, September 11, 2025}
7. ^{CNBC.com, September 12, 2025}
8. ^{WSJ.com, September 10, 2025}
9. ^{WSJ.com, September 11, 2025}

Stocks made gains last week, even as megacap tech gains outweighed economic concerns.

The Standard & Poor’s 500 Index advanced 0.33 percent, while the Nasdaq Composite Index rose 1.14 percent. The Dow Jones Industrial Average descended 0.32 percent. The MSCI EAFE Index, which tracks developed overseas stock markets, gained 0.04 percent.^1,2

Tech Gains, Jobs Slow

Markets started the week on shaky ground. The Dow Industrials, S&P 500, and Nasdaq each slipped downward more than half a percentage point. Tariff uncertainty rose again, as a court ruling injected fresh doubt. Meanwhile, rising Treasury yields amplified volatility and rattled megacap tech names.³

By Tuesday, stocks managed a partial rebound, and market direction shifted. Tech bounced back the next morning—led by two megacap tech stocks’ gains—with one soaring after avoiding an antitrust penalty.⁴

On Thursday, softer private hiring data and rising layoff trends fueled hopes of an imminent Fed rate move, with the S&P hitting a fresh record close. Treasury yields dropped significantly on rate-cut speculation, reinforcing risk appetite. The mood shifted again on Friday. A surprisingly weak jobs report undercut market optimism.^5,6

Focus on Jobs

Friday’s employment report fell short, as employers created fewer jobs last month.

Unemployment increased to 4.3 percent in August from 4.2 percent the prior month, hitting a 4-year high. Job growth slowed to 22,000 jobs in August, after much higher expectations of 75,000. In addition, a revision of the June estimate decreased the number by 27,000 jobs.⁷

Footnotes and Sources

1. ^{WSJ.com, September 5, 2025}
2. ^{Investing.com, September 5, 2025}  
3. ^{CNBC.com, September 2, 2025}
4. ^{CNBC.com, September 3, 2025}
5. ^{CNBC.com, September 4, 2025}
6. ^{WSJ.com, September 5, 2025}
7. ^{MarketWatch.com, September 5, 2025}

Stocks ended the week slightly lower as mixed economic data led to some profit-taking by investors ahead of the holiday weekend.

The Standard & Poor’s 500 Index edged down 0.10 percent, while the Nasdaq Composite Index slipped 0.19 percent. The Dow Jones Industrial Average slid 0.19 percent. The MSCI EAFE Index, which tracks developed overseas stock markets, skidded 1.53 percent.^1,2

Stocks Rise, Then Falter

Stocks initially rose but then took a breather as investors continued to process Fed Chair Powell’s comments from the Fed’s annual symposium.³

Stocks regained momentum midweek as investors waited for the Q2 corporate report from the nation’s most influential artificial intelligence (AI) company. The AI chip maker posted results Wednesday night, with a mixed reception in after-hours trading. On Thursday, the stock rallied, which helped the S&P 500 close above 6500 for the first time.^4,5

On Friday, the Fed’s favorite inflation gauge, the Personal Consumption Expenditures (PCE) Index, aligned with expectations. Still, stocks were under pressure from the opening bell as investors appeared to take profits ahead of the Labor Day weekend.⁵

Mixed Economic News

Revised gross domestic product (GDP) numbers showed the economy grew more quickly in Q2 than initially thought, which was a win for the economic bulls. However, the economic bears pointed out that orders of durable goods declined and the trade deficit was wider than expected. The PCE report, while in line with expectations, was at a 2.9 percent annual rate in July.^6,7,8

Investors are closely watching every piece of economic data for insights about what the Fed will do with interest rates at its two-day meeting, which ends September 17.  So expect attention to focus on speeches by Fed officials until the Fed enters its blackout period before the September meeting.

Footnotes and Sources

1. ^{WSJ.com, August 29, 2025}
2. ^{Investing.com, August 29, 2025}
3. ^{CNBC.com, August 25, 2025}
4. ^{CNBC.com, August 27, 2025}
5. ^{CNBC.com, August 28, 2025}
6. ^{WSJ.com, August 29, 2025}
7. ^{CNBC.com, August 28, 2025}
8. ^{MarketWatch.com, August 29, 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}