S&P 500: 0.26% DOW: 1.56% NASDAQ: -0.58% 10-YR Yield: 4.26%
What Happened?
Markets stumbled early in the week, with major indices sliding more than 200 bps. But following the latest Jackson Hole Federal Reserve meeting, equities clawed back ground. The S&P 500 eked out a modest gain of 26 bps, the Dow rose 156 bps, while the tech-heavy Nasdaq couldn’t quite keep pace, ending the week down 58 bps.
Investor focus was squarely on retail heavyweights, Walmart, Home Depot, and Target, as earnings offered a window into household spending resilience amid tariffs. Sentiment soured after Walmart missed expectations for the first time in three years. With the U.S. consumer still the key driver of growth, the disappointment weighed heavily, prompting a risk-off tone and pushing the 10-year Treasury yield higher.
The turnaround came when Fed Chair Jerome Powell hinted at the possibility of rate cuts as soon as September. In a year already defined by volatility and shifting narratives, this signal was enough to ease investor anxiety. Markets interpreted Powell’s remarks as a green light for looser financial conditions ahead, sending equities higher and restoring some optimism.
While the bounce was welcome, the path forward remains anything but straightforward. Investors will continue to parse corporate earnings and Fed commentary for signs of durability in both consumer demand and policy support; for now, the prospect of easier monetary policy has bought markets a reprieve.
Highlights From Powell’s Jackson Hole Speech
- Powell hints at a weakening labor market and a “shifting balance of risks that may warrant adjusting our policy stance”.
- “Higher tariffs have begun to push up prices in some categories of goods…We cannot take the stability of inflation expectations for granted. Come what may, we will not allow a one-time increase in the price level to become an ongoing inflation problem.”
The key takeaway – Markets found their footing Friday morning after Fed Chair Jerome Powell delivered what is likely his final speech at Jackson Hole. Typically reserved in tone to avoid overcommitting, Powell surprised by signaling that there is “cause to adjusting our policy.” For investors and analysts who had been waiting months for any hint of easing, the message resonated. With growth still uneven and the housing market stuck in limbo, sellers holding firm on prices while buyers wait for borrowing costs to come down, the prospect of lower rates offered a dose of optimism for both corporate and household balance sheets.
Even so, Powell was careful to stress that any shift depends on the trajectory of economic data. But nuance was all the market needed. The suggestion that rate cuts are on the table, even conditionally, was taken as a clear sign of relief. Investors interpreted his comments as a meaningful step toward looser financial conditions and a policy stance more supportive of growth, fueling hopes that the long-awaited inflection point in monetary policy may finally be approaching.
WMT Earnings: WMT Stock Wilts as Q2 Earnings Miss Forecasts
- WMT down nearly 3% in pre-market trading after is missed Q2 earnings forecasts.
- First time WMT has missed earnings estimates in three years. Came in at $0.68 per share vs. $0.74 estimates.
- WMT beat revenues by 4.8% and instore sales increased 4.6%, but rolled back thanks to uncertain economic picture.
The key takeaway – Walmart’s rare earnings miss rattled markets this week, as investors had been watching closely to see how the retail giant would navigate an environment shaped by tariffs and shifting consumer behavior. As the largest retailer in the United States and a bellwether for household spending, Walmart is often viewed as a proxy for the health of the American consumer. With consumer demand driving the bulk of U.S. economic growth, the disappointment raised questions about whether cracks are beginning to form in the foundation of the economy.
The timing mattered. Investors had hoped that retail results would clarify whether tariffs were significantly eroding margins and curbing household purchasing power. Walmart’s stumble, along with softer showings from other retail names, signaled that the pressures are real and that even the strongest operators are not immune. For markets, the message was clear: if the U.S. consumer begins to retrench, the broader economy loses its most reliable engine. That prospect added to the sense of uncertainty about growth heading into the back half of the year.services inflation proves sticky, the Fed may find itself forced to keep policy tighter for longer.
U.S. government plans to take a 10% stake in Intel
- President Trump told reporters the US Government had bought 10% stake in Intel, driving the stock price up 7%.
- Comes days after SoftBank, a Japanese conglomerate, also placed a $2B investment into Intel.
The key takeaway – Intel stands as the only major U.S. semiconductor firm capable of producing advanced chips on American soil, making it a keystone in the race for artificial intelligence dominance. In a bold move, the U.S. government has agreed to acquire roughly a 10 percent stake in Intel by converting existing funds earmarked under the CHIPS and Science Act, totaling $8.9 billion, into equity holdings without voting rights. President Trump hailed the deal as a “great deal for America,” emblematic of a new era of industrial policy rooted in national resilience.
The transaction underscores a broader strategic shift toward affirming U.S. exceptionalism in semiconductor manufacturing. By turning grants into ownership, the administration isn’t just subsidizing production, it’s placing an equity bet on America’s tech future. Critics warn of government overreach, but supporters argue it ensures taxpayers share in the upside of critical tech investments.
Together, with another investment from SoftBank, which added another $2 billion into Intel equity, these moves paint a vision of America returning to the forefront of global tech leadership.
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