US equities delivered a positive, but volatile, week from August 18–22, 2025, culminating in a sharp rally on Friday after Jerome Powell hinted at a potential rate cut, indicating that the Fed could adjust its policy stance and signaled a move in September was possible. Early in the week, tech stocks faced significant pressure due to concerns over high valuations and the outlook for artificial intelligence. While the S&P 500 and Dow Jones closed the week 0.3% and 1.5% higher, Nasdaq fell by 0.6%.
Sentiment had been weak heading into Friday, with the S&P 500 falling for five straight sessions, its longest losing streak since January, as the market pared bets that the Fed was about to reduce borrowing costs. Powell’s speech during the Jackson Hole event halted those concerns. The equity benchmark soared more than 1.5% to notch a third straight weekly advance, with last month’s record high in sight. A plunge in short-end Treasury rates sent the US yield curve to its steepest level since 2021. Geopolitical uncertainties and rising fears surrounding the Fed’s independence have been pressuring the long end of the curve.
For this new week, the main events will be the US GDP indicators, PCE inflation data and Nvidia’s quarterly earnings report. The company has the biggest weighting in the S&P 500 at almost 8% and its position at the center of AI development have made it a barometer of the broader market.
