The Weekly Update
Week of August 25th, 2025
By Christopher T. Much, CFP®, AIF®
Stocks were mixed last week despite a powerful Friday rally sparked by Federal Reserve Chair Jerome Powell, who opened the door to adjusting short-term interest rates.
The Standard & Poor’s 500 Index picked up 0.27 percent while the Nasdaq Composite Index lost 0.58 percent. The Dow Jones Industrial Average rose 1.53 percent. The MSCI EAFE Index, which tracks developed overseas stock markets, increased 0.80 percent.
All Eyes on Powell
Stocks traded in a narrow band to start the week as investors awaited fresh economic data and comments from Fed officials at their annual symposium in Jackson Hole, Wyoming.
After a big retailer reported quarterly results on Tuesday and gave encouraging guidance, stocks pushed higher. But markets took a breather later in the day as pressure on megacap tech and chipmakers led the Nasdaq and the broader market lower.
The S&P 500 and Nasdaq fell after minutes from the Federal Reserve’s July meeting were published; they revealed that most Federal Open Market Committee (FOMC) members were more concerned about inflation than the job market.
On Friday, markets rebounded after Fed Chair Powell opened the door to a rate move at the Fed’s September meeting. The day’s gain was strong enough to regain the week’s lost ground for the S&P and nearly all of it for the Nasdaq—and put the Dow solidly ahead for the week. 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.
Watch the Rotation
Investors appeared to rotate out of megacap tech as some expressed concern about valuations and the durability of the AI-driven rally. Two facts helped support this observation: the S&P fared better than the tech-heavy Nasdaq for the week, and the Russell 2000 Index of small-cap stocks (+3.25 percent) beat all three major stock averages.
The Federal Reserve also rotated a bit. In contrast to the Fed’s July meeting—where inflation was the bigger concern for most Committee members—Fed Chair Powell’s Friday morning speech at Jackson Hole revealed the FOMC was now more concerned with the jobs market.
This Week: Key Economic Data
Monday: New Home Sales. Dallas Fed President Lorie Logan and New York Fed President John Williams speak.
Tuesday: Durable Goods. Case-Shiller Home Price Index. Treasury Buyback Announcement. Consumer Confidence.
Wednesday: Survey of Business Uncertainty. Richmond Fed President Thomas Barkin speaks.
Thursday: Gross Domestic Product (GDP). Jobless Claims (weekly). Pending Home Sales. Corporate Profits. Fed Balance Sheet.
Friday: Personal Consumption & Expenditures (PCE) Index. International Trade Balance in Goods. Retail & Wholesale Inventories. Consumer Sentiment.
Source: Investor’s Business Daily – Econoday economic calendar; August 22, 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
Wednesday: NVIDIA Corporation (NVDA), CrowdStrike (CRWD)
Thursday: Dell Technologies Inc. (DELL)
Source: Zacks, August 22, 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.
