Closing Recap (Week Ending August 29) 

U.S. stocks finished higher for the week, though Friday saw a pullback led by technology following disappointing sector news. In-line inflation data kept September rate cut expectations high, supporting gold prices, while the US dollar held steady against major currencies and Bitcoin struggled below $110,000. 

Key Takeaways 

• Stocks End Week Higher Despite Friday Dip: Major indices posted weekly gains (S&P 500 +0.59%, Nasdaq +1.51%), with small caps outperforming (+3% WTD). Tech weakness, sparked by MRVL’s outlook, led Friday’s decline. 
• PCE Inflation In-Line: July Core PCE inflation met estimates (+2.9% Y/Y), reinforcing market expectations for a Federal Reserve rate cut in September (probability holding steady at 84%). 
• Bitcoin Struggles: Bitcoin dipped below $110,000, sparking debate among traders about whether the pullback presents a buying opportunity or signals further short-term weakness after a strong July rally. 
• Currency Pairs Consolidate: Major FX pairs like EUR/USD and USD/JPY traded within established ranges, reflecting a balance between divergent economic backdrops and uncertainty over future Fed policy. 
• Market Sentiment vs. History: The Fear & Greed Index remains in “Greed” territory, even as markets enter September, which is historically the worst month for stock performance. Insider selling activity was also noted as high. 
• Week Ahead Focus – Key Risk Events: The crucial US Jobs Report (Fri) and US ISM PMIs (Tue/Thu) will be the primary drivers, alongside key Eurozone Flash HICP inflation data (Tue). 

Looking Ahead

Looking ahead, the market focus shifts decisively to the health of the labor market and broader business activity. The upcoming week, though starting slow with a US holiday, culminates in the crucial US Jobs Report for August on Friday. This report will be a major determinant for solidifying or challenging the high probability of a September Fed rate cut. Before that, US ISM Manufacturing and Services PMIs will offer timely insights into economic momentum and input cost pressures. 

In Europe, flash inflation data (HICP) from the Eurozone on Tuesday will be critical for the ECB’s policy path, especially given the Euro’s strong performance year-to-date. In Australia, Q2 GDP data will provide insight into the economy’s resilience. The key question for the week is whether the incoming economic data, particularly from the labor market, will confirm the need for the highly anticipated Fed easing cycle.

Market Overview

U.S. stocks finished the final trading day of August on a weaker note, primarily driven by pressure in the technology sector after Marvell Technology (MRVL) issued a disappointing report and outlook, re-igniting concerns about data center spending. The much-anticipated PCE inflation report provided little motivation for investors, as the data landed exactly in line with expectations (Core PCE Y/Y at 2.9%). This kept market pricing for a September Fed rate cut firm at around 84%. 

Index	Last Closing Level	Friday’s Change	Friday’s Change (%)	Weekly Change (%)
DJ Industrials	45544	-92.02	-0.002	-0.19%
S&P 500	6460	-41.6	-0.0064	0.0059
Nasdaq	21455	-249.61	-0.0115	0.0151
Russell 2000	2362	-15.38	-0.0065	0.04%

Despite Friday’s pullback, major indices secured strong gains for the week and completed a historically strong month of August, defying typical seasonal weakness often seen under second-term presidents. Small caps were a notable outperformer for the week, suggesting some broadening of market participation. Market sentiment remains elevated, with the Fear & Greed Index holding in “Greed” territory. However, this optimism confronts significant historical headwinds as the market enters September, traditionally the weakest month for stocks. 

Furthermore, conflicting underlying data points present a confusing picture: M2 money supply continues to rise, and core inflation remains well above the Fed’s target, yet rate cuts are almost fully priced in. Cautionary signals, such as high levels of insider selling, add another layer for investors to consider as they weigh bullish momentum against potential emerging risks.

Economic Data Calendar (Week of September 1st) 

MON (Sep 2): 

• US Labor Day: US markets closed. 
• China Caixin Manufacturing PMI (Final): Key activity gauge for China. 
• EZ/UK Final Manufacturing PMIs (Aug): Final readings for Eurozone and UK factory activity. 

TUE (Sep 3): 

• EZ Flash HICP (Aug): Headline inflation exp. 2.0% Y/Y, Core exp. 2.2% Y/Y. Key input for ECB policy. 
• US ISM Manufacturing PMI (Aug): Watched closely after strong S&P Global Flash PMI (53.3) suggested renewed factory improvement and strong new orders. 

WED (Sep 4): 

• Australian Real GDP (Q2): Expected to show subdued growth (Q1 was +0.2% Q/Q), reinforcing fragile growth backdrop. 
• US ADP National Employment (Aug): Precursor to Friday’s NFP report. 
• EZ/UK Final Services PMIs (Aug): Final readings for the services sector. 

THU (Sep 5): 

• US ISM Services PMI (Aug): Flash S&P Global PMI for services showed continued robust expansion (55.4), but also sharply rising prices charged. 
• Swedish CPIF (Aug): Inflation data watched by Riksbank. 

FRI (Sep 6): 

• US Jobs Report (Aug): Headline NFP exp. +75k (vs +73k prior), Unemployment Rate exp. rising to 4.3% (from 4.2%). Key for Fed decision. 
• Canadian Jobs Report (Aug): Labor market data watched by BoC to assess economic weakness. 
• UK Retail Sales (Aug): Delayed report for July/August. 

Commodities, Currencies, and Treasuries 

Gold prices climbed on Friday, with December futures settling near $3,516/oz. The move higher was supported by expectations for a Fed rate cut in September, which firmed up after in-line PCE inflation data. Crude oil futures (WTI) slipped on Friday, settling around $64.01/bbl, as news of record-high US crude oil production in June added to supply concerns. In the currency markets, major pairs consolidated. 

Asset	Last Level	Friday’s Change	Unit / % Change
WTI Crude	64.01	-0.59	USD/bbl
Brent Crude	68.12	-0.5	USD/bbl
Gold (Dec Fut.)	3516.1	41.8	USD/oz
EUR/USD	1.17	0.0021	Rate
USD/JPY	146.95	0.0079	Rate
10-Year Note Yield	0.04227	0.0002	Yield (%)
Bitcoin (approx)	~109,800	-4.30%	USD

The EUR/USD pair held steady above 1.165, maintaining its significant gains for the year, supported by diverging policy outlooks compared to the US. The GBP/USD pair remained range-bound, trading between 1.3389 and 1.3594 as traders awaited fresh catalysts. The USD/JPY pair oscillated around the 147.00 level, caught between tighter Japanese fundamentals and US rate cut expectations, notably closing below its 50-day moving average, signaling weakening upward momentum. Treasury yields were relatively stable on Friday after reacting to the PCE data.