
The Week That Was
If you read last week's blog you might recall that I was slightly bullish but thought consolidation could be in the works, as markets waited for Powell's end-of-the-week remarks at the Jackson Hole symposium. Well, just like the title of today's blog proclaimed, the markets and my forecast received a "stick save" from Powell. For those of you unfamiliar with that term, it comes from hockey jargon, meaning whenever a player manages to pull out a situational "save" at the last instant. I think that's a fair analogy for the market this week. Remember, heading into Friday, the S&P 500 had fallen five consecutive days. Much of that weakness was led by the MegaCaps, as stalwarts Nvidia, AMD, Palantir, and Meta were all down more than 5% at one point during the week. Given their size and Market Cap, the indices began to follow suit. The S&P 500 is on pace to close the week modestly higher.
One item that did catch my attention during the tech sell-off was how the overall market breadth held relatively firm. That was an indication that investors weren't fleeing the markets completely. On the contrary, they were looking to other sectors for new leadership. This led a more cyclical bias, especially after Friday's Powell speech, as sectors like Consumer Discretionary, Industrials, Energy, and Financials became the new leaders. In fact, the weekly advance/decline for the S&P 500 was 4:1 advancers, so even as the S&P 500 finished relatively flat on the week (+0.26%), the strength under the surface had broadened. We also saw this play out amongst the Equal Weight S&P 500 (SPXEW) which set a new all-time high and the Russell 2000 (RUT) which rallied over 3.80% to close out the week.
Economic data was mixed for the week, highlighted by the biggest surprise, the S&P Purchasing Managers' Index (PMI) Manufacturing data which crushed expectations (53.3 vs 49.7 expected). A reading above 50 signals expansion. S&P PMI services also beat (55.4 vs 54.2 expected), and the overall composite reading jumped to 55.4, its highest since December, with employment, new orders, output, and input prices all higher. Initial and continuing jobless claims were both higher than expected, but not remarkably so, and the Leading Index data was in line at -0.1%.
Retail earnings were in focus led by Walmart (WMT) which fell 3.0% on the week after the company missed on analysts' earnings expectations. The company did, however, report a better-than-expected 4.6% rise in U.S. sales at stores open a year or more excluding fuel, and did raise fiscal 2026 net sales guidance. Lowe's (LOW) finished the week 5.0% higher after reporting earnings that surpassed analysts' earnings per share estimates and raised guidance for the fiscal year. Finally, Target (TGT) finished the week down over 5.0% despite earnings per share and revenue that both beat expectations.
Outlook for Next Week
At the time of this writing (1:20 p.m. ET), all the major indices are considerably higher (DJI + 902, SPX + 99, COMPX + 424, RUT + 88) as markets finish the week on a high note, following signals from Chairman Powell that September rates cuts are on the way. Powell acknowledged that the downside risks to labor are rising and that the economy is slowing. Investors took that to mean the "Powell put" is back and piled their money back into risk assets. The Russell 2000 (RUT) is up 3.90% today while Bitcoin (BTC) is up over 4.00% in today's trading. Breadth continues to strengthen and has been broad based and cyclical in nature, as the other 493 stocks are catching up with the Magnificent 7. Seventy-one percent of the S&P 500 stocks are trading above their respective 50-day MAs while 68% are trading above their 200-day MAs. That's an improvement of over 8% from last week's close.
From a technical perspective, the Dow Jones hit an all-time high today while the S&P 500 is within a stone's throw of its all-time high. The Nasdaq, given tech's underperformance this week, is the laggard, but still within 1.30% from last week's all-time high. The market seems to have found a new catalyst to push it forward, a semi-dovish Federal Reserve, and the broadening of the rally suggests more strength below the surface. All the major averages crept back above their respective 20-day MAs, something I mentioned last week, as a potential support level to watch. This is why I remain bullish for the upcoming week.
Other Potential Market-Moving Catalysts
Economic:
- Monday (Aug. 25): New Home Sales, Dallas Fed, Building Permits
- Tuesday (Aug. 26): Philly Fed, Durable Goods, Consumer Confidence
- Wednesday Aug. 27): MBA Mortgage Applications Index
- Thursday (Aug. 28): Continuing Claims, Initial Claims, GDP, Pending Home Sales
- Friday (Aug. 29): Personal Consumption Expenditures, Personal Income, Personal Spending, U Mich Consumer Sentiment
Earnings:
- Monday (Aug. 25): PDD Holdings Inc. (PDD), Heico Corp. (HEI)
- Tuesday (Aug. 26): Bank of Montreal (BMO), KE Holdings Inc. (BEKE), MongoDB Inc. (MDB), Okta Inc. (OKTA), BOX Inc. (BOX), PVH Corp. (PVH), JOYY Inc. (JOYY)
- Wednesday (Aug. 27): Williams-Sonoma Inc. (WSM), JM Smucker Co. (SJM), Abercrombie & Fitch Co. (ANF), Foot Locker Inc. (FL), Kohl's Corp. (KSS), Nvidia Corp. (NVDA), CrowdStrike Holdings Inc. (CRWD), Snowflake, Inc. (SNOW)
- Thursday (Aug. 28): Toronto-Dominion Bank (TD), Dollar General Corp. (DG), DICK's Sporting Goods Inc. (DKS), Burlington Stores Inc. (BURL), Dell Technologies, Inc. (DELL), Marvell Technology Inc. (MRVL), Autodesk Inc. (ADSK), Affirm Holding Inc. (AFRM), Ulta Beauty Inc. (ULTA)
- Friday (Aug. 29): Alibaba Group Holding (BABA), Frontline Plc (FRO)
Technical Take
S&P 500 Index (SPX + 99 to 6,469)
The S&P 500 (SPX) is on track to for a + 0.30% weekly gain on the heels of a big Friday rally, following Chair Powell's speech and the Jackson Hole Symposium. The buy the dip mantra seems to be in place, and the broadening of the rally, outside of the Magnificent 7 stocks, signals there may be more upside to come. Last week, I called out the divergence between the SPX highs and the declining RSI, as a potential warning signal, and I added that to the graph again this week. The SPX once again found support at its 20-day MA, validating, at least in the short-term, that the uptrend remains in place. A push above last week's high price of 6481 could be in order next week.
Technical translation: intermediate-term bullish, near-term bullish

Source: ThinkorSwim trading platform
Past performance is no guarantee of future results.
S&P 500 Equal Weight Index (SPXEW + 141 to 7,662)
The chart of the S&P 500 Equal Weight Index (SPXEW) looks stronger than the SPX, as it finally broke through its December highs. The story of the week was the rotation from tech to the cyclical sectors, and this is reflected in the chart below. We finally saw the participation of the other 493 stocks, outside the Mag7, which powered the index to new highs.
Technical translation: intermediate term bullish, near-term bullish

Source: ThinkorSwim trading platform
Past performance is no guarantee of future results.
Cryptocurrency News:
Not a lot of news on the crypto front this week, other than a few items. First, BofA reported that all asset classes except Crypto saw weekly inflows. Per their report, money flowed into equities, bonds, money market and gold funds in the week through Wednesday, while crypto funds had outflows of about $700 million. This report was issued Wednesday, so it doesn't capture today's move of 4.40% in spot BTC which would likely include some large inflows. Also, in an interesting note from Bloomberg around Bitcoin volatility, annualized volatility has dropped to 38% from close to 200% more than a decade ago. This has led to investors, who are looking for wilder swings, to turn to Ethereum, as Ether exchange-traded fund volumes have matched or surpassed their Bitcoin counterparts on several trading days.
Market Breadth:
The Bloomberg chart below shows the current percentage of members within the S&P 500 (SPX), Nasdaq Composite (CCMP), and Russell 2000 (RTY) that are trading above their respective 200-day Simple Moving Averages (SMA). Stocks rallied into the close of the week, after showing early weakness, leading to a nice bump in breadth in the SPX. On a week-over-week basis, the SPX (white line) breadth jumped to 64.33% from 62.73%, the CCMP (blue line) fell to 45.27% from 46.98%, and the RTY (orange line) was relatively flat, moving to 53.81% from 54.51%SS.

Source: Bloomberg L.P.
Market breadth attempts to capture individual stock participation within an overall index, which can help convey underlying strength or weakness of a move or trend. Typically, broader participation suggests healthy investor sentiment and supportive technicals. There are many data points to help convey market breadth, such as advancing vs. declining issues, percentage of stocks within an index that are above or below a longer-term moving average, or new highs vs. new lows.
This Week's Notable 52-week Highs (382 today): Nio Inc. (NIO + $0.85 to $6.41), Sofi Technologies Inc. (SOFI + $1.58 to $24.90), Alphabet (GOOGL + $7.57 to $207.32), Bank of America Corp. (BAC + $1.27 to $49.53)
This Week's Notable 52-week Lows (13 today): Vision Marine Technologies Inc. (VMAR - $0.02 to $1.59), Olb Group Inc. (OLB - $0.05 to $1.02), VCI Global Limited (VCIG - $0.03 to $0.74)
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