The Weekly Update
Week of August 18th, 2025
By Christopher T. Much, CFP®, AIF®
Stocks rose last week despite mixed signals on inflation as investors kept one eye on the Fed’s September meeting.
The Standard & Poor’s 500 Index advanced 0.94 percent, while the Nasdaq Composite Index added 0.81 percent. The Dow Jones Industrial Average rose 1.74 percent. The MSCI EAFE Index, which tracks developed overseas stock markets, increased 2.16 percent.
Third Gain in Four Weeks
Stocks posted modest losses to start the week as investors braced for July consumer inflation reports. The White House’s executive order on Monday extending the tariff deadline for China by 90 days failed to move markets in the other direction.
Stocks then staged a two-day rally following the latest Consumer Price Index (CPI) report, which showed July inflation held steady over the prior month—beating expectations. The inflation news led some investors to move into small-cap stocks, with the Russell 2000 Index of small-cap stocks rising 5 percent over Tuesday and Wednesday.
However, markets slipped Thursday as investors dug into the Producer Price Index (PPI) for July, which showed wholesale inflation hit a 3-year high last month; this was the third weekly gain in the past four weeks for each of the three major averages; the S&P and Nasdaq advanced four of the last five weeks.
A Mixed Inflation Story
Inflation continues to give mixed signals, which can unsettle investors who anticipate the Fed adjusting rates at its September meeting.
Last week’s CPI report showed that “headline” (retail) inflation held steady. Stocks rose in response, even though core inflation—excluding volatile food and energy prices—was hotter than economists expected.
Two days later, the PPI report revealed that inflation began to creep into wholesale prices in July. Stocks fell in response as investors processed the conflicting reports.
This Week: Key Economic Data
Monday: Homebuilder Confidence Index.
Tuesday: Housing Starts. Building Permits. Federal Reserve Official Michelle Bowman speaks.
Wednesday: Minutes from Fed’s FOMC July Meeting. Federal Reserve Official Christopher Waller and Atlanta Fed President Raphael Bostic speak.
Thursday: Weekly Jobless Claims. Services & Manufacturing PMI Composite. Existing Home Sales. Leading Economic Indicators. 30-Year TIPS (Treasury Inflation-Protected Securities) Auction. Fed Balance Sheet. Atlanta Fed President Raphael Bostic speaks.
Friday: Fed Chair Jerome Powell speaks.
Source: Investor’s Business Daily – Econoday economic calendar; August 15, 2025
The Econoday economic calendar lists upcoming U.S. economic data releases (including key economic indicators), Federal Reserve policy meetings, and speaking engagements of Federal Reserve officials. The content is developed from sources believed to be providing accurate information. The forecasts or forward-looking statements are based on assumptions and may not materialize. The forecasts also are subject to revision.
This Week: Companies Reporting Earnings
Monday: Palo Alto Networks, Inc. (PANW)
Tuesday: The Home Depot, Inc. (HD)
Wednesday: The TJX Companies, Inc. (TJX), Lowe’s Companies, Inc. (LOW), Analog Devices, Inc. (ADI)
Thursday: Walmart Inc. (WMT), Intuit Inc. (INTU)
Source: Zacks, August 15, 2025
Companies mentioned are for informational purposes only. It should not be considered a solicitation for the purchase or sale of the securities. Investing involves risks, and investment decisions should be based on your own goals, time horizon, and tolerance for risk. The return and principal value of investments will fluctuate as market conditions change. When sold, investments may be worth more or less than their original cost. Companies may reschedule when they report earnings without notice.
