Closing Recap

U.S. stocks finished mostly lower in a quiet session, with the Nasdaq posting a sixth consecutive decline as investors remained cautious ahead of Fed Chair Powell’s key speech tomorrow; the dollar firmed, oil gained, gold slipped, and Treasury yields were little changed. 

Key Takeaways 

• Stocks Slip Ahead of Powell: Major indices declined for another day (S&P -0.40%, Nasdaq -0.34%), with the Nasdaq 100 logging a 6-day losing streak as investors awaited guidance from Jackson Hole. 
• Profit-Taking in Momentum Names: Recent market winners and momentum stocks have seen a consistent pullback over the last week as investors lighten up positions. 
• U.S.-EU Trade Deal Finalized: A major trade deal between the U.S. and the EU was formally announced, with the U.S. imposing a 15% tariff on most goods, but the market reaction was muted. 
• Fed Speakers Offer Mixed Views: Fed officials Schmid, Hammack, and Bostic gave varied opinions on the need for rate cuts, adding to the uncertainty ahead of Powell’s speech. 
• Economic Data Disappoints: Weekly jobless claims rose, and the Philadelphia Fed manufacturing survey for August fell sharply, missing expectations and signaling regional weakness. 
• Oil Rises, Gold & Crypto Fall: Crude oil prices posted a second day of gains, while gold and cryptocurrencies declined. 
• Sentiment Cautious: Investor sentiment gauges (NAAIM, AAII) showed a notable increase in bearishness and a pullback from peak equity exposure. 

Market Overview

U.S. equity markets continued their modest pullback today, with major indices finishing lower for the fifth consecutive session as investors adopted a cautious “wait-and-see” approach ahead of Federal Reserve Chairman Jerome Powell’s highly anticipated speech at the Jackson Hole symposium tomorrow morning. The recent profit-taking has been most pronounced in the Nasdaq 100, which has now declined for six straight days, its longest losing streak since late 2022. This follows a powerful rally that had pushed indices to all-time highs, and the current consolidation reflects nervousness about the Fed’s next move and the sustainability of the recent gains. 

Index	Up/Down	% Change	Last
DJ Industrials	-152.81	-0.0034	44785
S&P 500	-25.6	-0.004	6370
Nasdaq	-72.55	-0.0034	21100
Russell 2000	4.72	0.0021	2274

A major positive development today was the formal announcement of a comprehensive trade deal between the U.S. and the European Union. The agreement sets a 15% U.S. tariff on most EU imports and includes significant EU commitments to purchase U.S. energy and invest in U.S. strategic sectors. While this removes a massive overhang of uncertainty, the market’s reaction was surprisingly subdued, suggesting the news may have been largely priced in or overshadowed by the focus on the Fed. 

Economic data released this morning was largely disappointing. Weekly jobless claims rose more than expected, and the Philadelphia Fed business conditions index for August slumped, missing forecasts and showing a sharp drop in new orders. However, flash PMIs for August were surprisingly strong, and existing home sales also beat expectations, creating a mixed picture for the economy. A parade of Fed speakers throughout the day offered divergent views on the path for interest rates, further highlighting the importance of Powell’s speech today for providing a clearer policy signal.

Economic Data

Economic data yesterday was mixed, with weak jobless claims and a poor Philly Fed survey contrasting with strong flash PMIs and better-than-expected existing home sales. 

• Weekly Jobless Claims: Rose to 235,000 (from 224,000), above the 225,000 consensus. Continuing claims also climbed to 1.972 million. 
• Philadelphia Fed Business Conditions (Aug): Slipped to -0.3 (below +7.0 consensus, vs. +15.9 July). New Orders -1.9, Employment 5.9. Prices Paid 66.8. 
• Existing Home Sales (July): Rose 2.0% m/m to a 4.01 million unit rate (above 3.92M consensus). Inventory at 4.6 months’ supply. 
• S&P Global Flash PMIs (Aug): Manufacturing 53.3 (vs. 49.8 July), Services 55.4 (vs. 55.7 July), Composite 55.4 (vs. 55.1 July). All showing strong expansion. 
• Leading Economic Indicators (July): Fell -0.1%, in line with consensus. 

Commodities, Currencies, and Treasuries 

Gold prices edged lower, with December futures down $6.90 (-0.2%) to settle at $3,381.60 per ounce. The precious metal was pressured by a stronger U.S. dollar as investors positioned ahead of Chairman Powell’s speech. Crude oil prices rebounded for a second day, with WTI gaining $0.81 (+1.29%) to settle at $63.52/bbl, finding support from the positive trade news and technical factors after a recent slide. Natural gas prices also bounced from nine-month lows. 

Asset	Up/Down	Unit / % Change	Last
WTI Crude	0.81	USD/bbl	63.52
Brent	0.83	USD/bbl	67.67
Gold	-6.9	USD/oz	3381.6
EUR/USD	-0.0034	USD	1.1616
USD/JPY	0.9	JPY	148.22
10-Year Note	0.034	%	0.0433

The U.S. dollar index gained, with the Euro falling -0.35% and the Yen weakening 0.6% against the greenback. Treasury yields were little changed across the curve, with the 10-year yield up about 3 basis points to 4.33% as the bond market awaited clarity from the Fed.

Looking Ahead 

The entire market’s focus is now on Federal Reserve Chairman Jerome Powell’s keynote speech at the Jackson Hole symposium today at 10:00 AM ET. His commentary on the economic outlook, inflation, and the future path of interest rates will be the most significant market-moving event of the week. Investors will be parsing his words for any shift in tone that could confirm or challenge the market’s current expectation for a September rate cut. Expect heightened volatility around the speech. Q2 earnings season continues next week with key reports from the tech sector.