Closing Recap

U.S. stock futures indicate a slightly lower open, suggesting a pause after Friday’s powerful rally that sent the Dow to a new all-time high, as investors digest Fed Chair Powell’s dovish pivot and look ahead to key inflation data this week. 

Key Takeaways 

• Futures Slip After Powell-Led Surge: Equities are poised for a modest pullback after a massive rally on Friday, where the Dow hit a new record and other indices surged, following Powell’s Jackson Hole speech. 
• Powell’s Dovish Tilt Ignites Rally: Fed Chair Powell’s comments on Friday hinting at a near-term interest rate cut significantly boosted market sentiment and sent rate cut odds for September soaring to nearly 90%. 
• Focus Shifts to PCE Inflation & Earnings: The market’s main focus this week will be Friday’s Personal Consumption Expenditures (PCE) Price Index, the Fed’s preferred inflation gauge, and earnings from tech giant Nvidia (NVDA). 
• Global Markets Mixed: Asian markets were mostly higher (Shanghai +1.6%, Hang Seng +1.9%), while European markets are slightly lower, and the UK is closed for a holiday. 
• Oil & Gold Consolidate: Crude oil prices are modestly higher, while gold is down slightly after rallying last week. 
• Yields & Dollar Steady: Treasury yields and the U.S. dollar are little changed in early trading, consolidating after sharp moves on Friday. 
• Valuation & Sentiment Warnings Persist: Despite the rally, some indicators show record tech valuations relative to GDP and low institutional cash levels, which have historically been sell signals. 

Market Overview

U.S. equity markets are set for a slightly lower open this morning, suggesting a period of consolidation after a powerful rally on Friday sent the Dow Jones Industrial Average to a new all-time high. The surge was a direct reaction to U.S. Federal Reserve Chair Jerome Powell’s highly anticipated speech at the Jackson Hole symposium, where he adopted a more dovish tone and hinted at a potential near-term interest rate cut. His comments led traders to boost the probability of a September rate reduction to nearly 90%, igniting a broad-based rally, particularly in interest-rate-sensitive sectors like small caps, homebuilders, and banks. 

Index (Futures)	Up/Down	% Change	Last
Dow	-98	-0.0021	45617
S&P 500	-18.25	-0.0029	6464
Nasdaq	-85.5	-0.0036	23484

After a mixed week that saw the Nasdaq pull back while the Dow gained, Powell’s speech provided a clear catalyst, propelling risk assets higher. This week, the market’s attention will shift to a new set of key events. The most important will be Friday’s release of the Personal Consumption Expenditures (PCE) Price Index, which is the Fed’s preferred inflation gauge. The data will be critical in confirming whether the recent cooling trend in inflation is continuing, which would solidify the case for a September cut.

Additionally, the Q2 earnings season continues with a heavy dose of software company reports and, most notably, results from AI-leader Nvidia (NVDA). In Washington, the Congressional Budget Office (CBO) released an estimate that President Trump’s increased tariffs could significantly reduce the national deficit over the next decade. Global markets were mixed overnight, with strong gains in China and Hong Kong, while European markets are slightly lower in holiday-thinned trading (UK closed).

Economic Calendar

Today’s U.S. economic calendar is very light, with a focus on regional manufacturing data: 

• 8:30 AM ET: National Activity Index for July 
• 10:00 AM ET: New Home Sales M/M for July 
• 10:30 AM ET: Dallas Fed Manufacturing Index for August 

Earnings Calendar: 

• Before the Open: GASS, NSSC, PDD, SSL 
• After the Close: FSCO, HEI, SMTC, SNT Key 

This Week: 

• Personal Consumption Expenditures (PCE) Price Index (Friday). 
• Earnings from Nvidia (NVDA). 
• Start of Wall Street conference season. 

Commodities, Currencies, and Treasuries 

Gold prices are easing slightly, with spot gold down around $7.30 (-0.2%) to $3,411.20 per ounce, consolidating after a strong rally last week. Crude oil prices are modestly higher, with WTI up about $0.44 to $64.10/bbl, finding some support from the improved risk sentiment following Powell’s speech. 

Asseet	Up/Down	Unit / % Change	Last
WTI Crude	0.44	USD/bbl	64.1
Brent	0.4	USD/bbl	68.13
Gold	-7.3	USD/oz	3411.2
EUR/USD	-0.0021	USD	1.1695
USD/JPY	0.44	JPY	147.37
10-Year Note	0.019	%	0.04277

The U.S. dollar is little changed against a basket of currencies after falling sharply on Friday. Treasury yields are ticking slightly higher after a significant drop on Friday, with the 10-year yield up about 1.9 basis points to 4.277%. Cryptocurrencies are pulling back from recent highs. 

Looking Ahead 

The market will be digesting Fed Chair Powell’s dovish pivot from Jackson Hole and looking for confirmation from upcoming economic data. The main event of the week will be Friday’s PCE inflation report. Any significant deviation from the recent cooling trend could challenge the market’s high conviction in a September rate cut and reintroduce volatility. Earnings reports, particularly from Nvidia, will also be a key focus for the tech sector and the broader market’s growth narrative. With August winding down, trading volumes may remain somewhat light ahead of the post-Labor Day ramp-up.