Here's what drove it:
→ Cooler inflation data (CPI and PPI both came in soft) eased fears of a September rate hike. The odds of a hike dropped from ~45% to ~30% by week's end, according to CME FedWatch.
→ AI and tech earnings kept delivering. Strong results renewed confidence in the AI trade and pushed the Nasdaq up roughly 1.2% on the week.
→ Energy was the standout sector, up nearly 8%, after renewed tension around the Strait of Hormuz sent oil prices higher.
→ Volatility stayed low. The VIX sat around 14.6 — hardly a sign of nerves, even with records being set.
But the week wasn't all smooth sailing. Friday brought softer notes: July retail sales fell 0.6%, its worst reading in over a year, and consumer sentiment slipped as inflation concerns lingered. The S&P and Dow both dipped slightly into the close even as they held onto weekly gains.
The bigger picture: strong earnings are still winning the tug-of-war against economic soft spots — for now. That divergence between resilient markets and a more cautious consumer is worth watching heading into the Fed's September meeting.
Records are nice. But the real story this week was what's happening underneath them.
What stood out most to you this week — the inflation data, the AI earnings, or the consumer sentiment slip?
#Markets #Investing #WeeklyRecap #Finance
Sources: Bloomberg, WSJ
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