Markets In Focus: The Week That Was and What’s On Tap
THE WEEK THAT WAS
The major indices posted modest gains for the week ending August 28, with the S&P 500 up 0.5%, the Nasdaq gaining 0.9%, and the Dow rising 0.5% for its first winning week in three. The Russell 2000 was the notable outlier, falling 1.5% as small caps bore the brunt of rising rate-hike expectations.
The big story midweek was Nvidia. The chipmaker reported fiscal Q2 earnings of $2.22 per share, topping estimates of $2.09, and the stock jumped nearly 9% on Thursday. That said, the strength didn’t spread far. The VanEck Semiconductor ETF fell more than 3% on the week, with Marvell and Applied Materials dropping 8% and 5% respectively. When the best name in a sector rallies and the rest sell off, it’s worth paying attention to what that says about where the real conviction is.
Then came Warsh. Speaking at the annual Jackson Hole symposium Friday morning, he reiterated that the Fed’s job is to deliver price stability and said current inflation readings, with PCE running at 3.7%, do not show meaningful underlying improvement. He stopped short of committing to a September hike, but markets didn’t wait for clarity. Odds of a rate increase at the September 15-16 meeting jumped to around 57%, up from roughly a third before his remarks, and the two-year Treasury yield moved higher in response. The next CPI report, due just days before that meeting, now carries considerably more weight than it did a week ago.
The Russell 2000’s underperformance fits neatly into that story. Smaller companies tend to carry more floating-rate debt and have less access to cheap financing than their large-cap counterparts, so when rate-hike odds rise, they feel it first. It was a week that started with an AI-driven rally and ended with a reminder that the Fed is still the most important variable in the room.
THE WEEK AHEAD
Equities enter the week with a still-elevated but wobbly macro backdrop: the 10-year sits near 4.75% and the 30-year above 5.3%, its highest since 2007 and a headwind for duration-sensitive multiples even as disinflation trends soften near-term Fed-hike odds ahead of the September 16 FOMC. Data flow is dense: Tuesday’s ISM Manufacturing PMI and JOLTS, Wednesday’s ADP print and Fed Beige Book, and Friday’s nonfarm payrolls/unemployment rate cap the week. The August employment report will be the single largest swing factor for rate-path repricing into the FOMC blackout.
Earnings concentrate around AI infrastructure and cybersecurity. Monday PM: CRDO, PANW, and DELL headline. Dell’s server/AI-hardware margins and Palo Alto’s platformization/ARR trajectory are key reads on enterprise IT spend. Wednesday PM brings AVGO, HPE, and SNOW, Broadcom’s custom-silicon/networking guide (consensus ~$29.4B revenue, AI semis ~$16B) is arguably the week’s most important single print for the AI-capex thesis, with HPE’s server backlog and Snowflake’s consumption trends offering read-throughs on cloud/data demand.
Geopolitically, watch renewed Iran-sanctions friction, simmering US-Canada tariff tension, and a possible Federal Circuit ruling on the tariff-refund mechanism tied to the Supreme Court’s earlier reciprocal-tariff decision as any adverse trade-policy headline compounds bond-yield pressure on multiples.
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The S&P 500 generally represents performance of 500 large companies listed on exchanges in the U. S. It is one of the most commonly followed equity indices. The Nasdaq Composite Index is a market-weighted index that measures the performance of more than 3,000 common equities listed on the Nasdaq Composite Market. The Russell 2,000 Index is a market-cap weighted index that measures the performance of approximately 2,000 of the smallest companies in the Russell 3,000 Index. The MSCI ACWI captures Large and Mid-Cap representation across 23 Developed Markets (DM) and 24 Emerging Markets (EM) countries. With 2,921 constituents, the index covers approximately 85% of the global investable equity opportunity set. FactSet Research System is a financial data and software company that provides research for Wall Street professionals and individual investors.
