Macro Events & News
The Federal Reserve lowered short-term interest rates by 25 basis points, citing recent weakness in the labor market as a key factor behind the move. Fed Governor Stephen Miran dissented, calling for a 50-basis-point cut. The updated dot plot showed most members expect another 50 basis points of easing, signaling more cuts than indicated in prior meetings.
Retail sales added to market optimism, with August rising 0.6% month over month, beating estimates by 0.2 percentage points. Sentiment improved further late in the week after President Trump and President Xi held a call that included discussion of a possible sale of TikTok to U.S. investors.
Positive macro news and easing trade concerns boosted rate-sensitive sectors like small caps and technology, driving the major indexes to fresh all-time highs. Chinese ADRs also gained after Beijing announced new stimulus measures and companies like Alibaba Group (NASDAQ: BABA) and Baidu (NASDAQ: BIDU) revealed AI initiatives, including reports of a domestic chip designed to rival NVIDIA H20 chips.
The 10-year Treasury yield inched upward to 4.13% and the VIX climbed to 15.45.
All the major indexes ended marginally higher for week: the Dow up 1%, the S&P 500 up 1%, and the Nasdaq led gaining 2%.
Watchlist News
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Adobe Inc (NASDAQ:ADBE) climbed through the week as enterprise software stocks rebounded after recent selling tied to fears of AI-driven disruption.
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GameStop Corporation (NYSE:GME) had been quiet following better-than-expected earnings but gained momentum alongside broader technology names after the Fed confirmed rate cuts.
6% ▲
Palo Alto Networks Inc (NASDAQ:PANW) advanced with the broader tech sector, a move that may provide the push needed to carry the stock toward new all-time highs.
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Workday Inc (NASDAQ:WDAY) gained following its Workday Rising conference, where it announced new AI products and partnerships. The stock also benefited from a series of analyst price target upgrades that added to the upside momentum.
