Markets Await the Fed’s Next Interest Rate Decision:
Stocks were mixed last week despite a strong rally on Friday sparked by Federal Reserve Chair Jerome Powell, who hinted at potential adjustments to short-term interest rates in the near future.
The S&P 500 Index picked up 0.27 % while the Nasdaq Composite Index lost 0.58%. The Dow Jones Industrial Average rose 1.53 %. The MSCI EAFE Index, which tracks developed overseas stock markets, increased 0.80%.1,2
Source: Bloomberg Finance, L.P. (Performance data normalized 8/15/25 = 0)
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.3
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.4
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.5
Sources: U.S. Department of the Treasury, Board of Governors of the Federal Reserve System, Charles Schwab
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%) beat all three major stock averages.6
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.7
This Week: Key Economic Data
Source: Bloomberg Finance L.P.
This Week: Companies Reporting Earnings
Source: EarningsWhispers
Author
Gary Aiken
Chief Investment Officer
Concord Asset Management
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Footnotes and Sources
1WSJ.com, August 22, 2025
2Investing.com, August 22, 2025
3CNBC.com, August 19, 2025
4CNBC.com, August 20, 2025
5MarketWatch.com, August 22, 2025
6WSJ.com, August 22, 2025
7WSJ.com, August 22, 2025
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