Stocks Upbeat on AI; Warsh: “Less is More.”:
Stocks rebounded last week as falling bond yields and upbeat AI-related corporate reports rekindled positive market sentiment despite the Fed Chair’s slightly hawkish speech.
The S&P 500 Index gained 0.49%, while the Nasdaq Composite Index rose 0.85 percent. The Dow Jones Industrial Average added 0.53 percent. The MSCI EAFE Index, which tracks developed overseas stock markets, lost 0.17%.1,2
An Active News Week
Chip stocks fell as the week kicked off, dragging down the S&P 500 and Nasdaq.Reports that the Treasury Department may buy back its own bonds helped drive yields lower.3,4
Midweek, the Personal Consumption Expenditures (PCE) Report, the Fed’s preferred inflation gauge, came in a little hotter than expected. However, core PCE, which excludes food and energy, was in line with forecasts.5
Market sentiment got a lift on Thursday as investors cheered upbeat Q2 corporate reports. A handful of high-profile tech companies said AI helped drive Q2 results and provided strong guidance. Semiconductor stocks and adjacent names in the AI trade led the rebound, driving broader gains for the Nasdaq and S&P 5006
On Friday, stocks initially shrugged off Fed Chair Kevin Warsh’s keynote speech, but sellers gained the upper hand later in the session. Short- and intermediate-term Treasury yields, including that of the bellwether 10-year Treasury note, rose as investors digested Warsh’s comments on inflation.7
Signals from Jackson Hole
At the Federal Reserve’s 2026 Economic Policy Symposium in Jackson Hole, Fed Chair Warsh expressed concerns about current inflation trends. He also said that he believes “less is more” when it comes to the Fed communicating about future policy moves.
In separate speeches, Cleveland Fed President Beth Hammack, Dallas Fed President Lorie Logan, and Minneapolis Fed President Neel Kashkari appeared to support higher short-term rates. Fed Governor Christopher Waller, Kansas City Fed President Jeffrey Schmid, and Vice Chair Philip Jefferson also took a modestly hawkish tone in their statements.8
The Treasury Department stepped in on Wednesday to say that it would double the size of its current repurchases of longer-term (10- to 30-year) Treasury debt. It’s uncertain how the move could influence markets.8
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 28, 2026
2Investing.com, August 28, 2026
3CNBC.com, August 24, 2026
4CNBC.com, August 25, 2026
5CNBC.com, August 26, 2026
6WSJ.com, August 28, 2026
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