Closing Recap

U.S. stocks finished mostly lower in a quiet session, pulling back from record highs as investors consolidated recent gains and digested ongoing Fed policy uncertainty; oil prices rallied, gold was little changed, the dollar firmed, and Treasury yields were mixed. 

Key Takeaways 

• Stocks Consolidate Near Highs: Major indices slipped after a strong rally on Friday, with the Dow and S&P 500 down slightly, while small caps underperformed. 
• Tech Outperforms: The Nasdaq edged higher, supported by continued strength in mega-cap technology and AI-related names (AAPL, AMZN, GOOGL, NVDA, TSLA). 
• Focus on NVDA Earnings & PCE: Investor attention is now squarely on Nvidia’s (NVDA) earnings report on Wednesday and the Fed’s preferred PCE inflation gauge on Friday. 
• Fed Independence Concerns Linger: Markets continue to grapple with President Trump’s criticism of the Fed, with headlines today suggesting he is attempting to fire Fed Governor Lisa Cook. 
• Oil Rallies: Crude oil prices gained nearly 2%, finding support from technical factors and a stable demand outlook. 
• Gold Flat, Crypto Dips: Gold prices were little changed, while cryptocurrencies like Bitcoin pulled back from recent highs.
•  Economic Data Mixed: July New Home Sales missed estimates, but the Dallas Fed manufacturing index showed slight improvement. 

Market Overview 

U.S. equity markets started the final week of August with a day of quiet consolidation, finishing mostly in negative territory as investors took a breather following Friday’s powerful, Powell-induced rally that sent the Dow to a new record. After a strong run-up, major indices traded in a relatively tight range today, with a slight negative bias. The Dow and S&P 500 both slipped, and small caps underperformed. However, the tech-heavy Nasdaq continued to show relative strength, propped up by gains in several “Magnificent Seven” mega-cap stocks, underscoring the market’s continued reliance on the AI growth narrative. 

Index	Up/Down	% Change	Last
DJ Industrials	-349.27	-0.0077	45282
S&P 500	-27.59	-0.0043	6439
Nasdaq	-47.24	-0.0022	21449
Russell 2000	-22.78	-0.0096	2339

With a light economic calendar to start the week, much of the market’s focus was on positioning ahead of several key upcoming catalysts. The most anticipated event will be the earnings report from AI chip leader Nvidia (NVDA) on Wednesday, which is seen as a crucial barometer for the entire tech sector. Additionally, the release of the Personal Consumption Expenditures (PCE) Price Index on Friday, the Fed’s preferred inflation gauge, will be critical in shaping expectations for the September FOMC meeting. 

Geopolitical and policy headlines also remained in focus. President Trump announced a new tariff investigation into imported furniture, potentially impacting retailers. More significantly, headlines emerged suggesting President Trump is attempting to fire Federal Reserve Governor Lisa Cook, reigniting concerns about the central bank’s independence and causing some intraday volatility in the U.S. dollar and crypto markets.

Economic Data

Economic data yesterday was mixed, with a miss on new home sales but a slight improvement in a regional manufacturing survey. 

• New Home Sales (July): Fell -0.6% m/m to a 652K annualized rate (vs. 630K consensus). New home supply remained elevated at 9.2 months. The median sale price was down -5.9% year-over-year. 
• Dallas Fed Manufacturing Index (Aug): Declined slightly to -1.8 from 0.9 in July, remaining in contraction for 6 of the 8 months this year. 

Commodities, Currencies, and Treasuries 

Gold prices were little changed, with December futures down just $1.00 to settle at $3,417.50 per ounce, as the market consolidated after Friday’s rally. Crude oil prices jumped, with WTI gaining $1.14 (+1.80%) to settle at $64.80/bbl. The rally was attributed to technical factors and a stable demand outlook ahead of inventory data. 

Asset	Up/Down	Unit / % Change	Last
WTI Crude	1.14	USD/bbl	64.8
Brent	1.07	USD/bbl	68.8
Gold	-1	USD/oz	3417.5
EUR/USD	-0.0092	USD	1.1623
USD/JPY	0.83	JPY	147.75
10-Year Note	0.011	%	0.04267

The U.S. dollar experienced a volatile session; it initially fell on reports of Trump attempting to fire a Fed governor, which raised concerns about Fed independence, but then rebounded to finish near flat as the dust settled. Treasury yields edged slightly higher for most of the session before ending little changed, with the 10-year yield holding near 4.267%. Bitcoin prices fell, dropping to a seven-week low as traders took profits and reacted to the Fed policy uncertainty.

Looking Ahead 

The market will be keenly focused on Wednesday’s earnings report from Nvidia (NVDA), which is expected to be a major catalyst for the tech sector and the broader market. The release of revised Q2 GDP data on Thursday and the PCE inflation report on Friday will be critical for shaping the economic outlook and Federal Reserve policy expectations. Any further developments regarding President Trump’s relationship with the Fed or new trade policy announcements could also inject significant volatility.