The stock market is on edge right now. All eyes are on Fed chief Jerome Powell, who’s set to speak at the Jackson Hole event this Friday.
Traders are betting he could confirm rate cuts are coming. A cut in September is still expected, but hot inflation data last week lowered the odds a bit.
Even with that, markets are pricing in at least one more cut by year-end, maybe even two. Powell has used this event before to drop big policy hints, so investors are preparing for fireworks.
Dow, S&P, Nasdaq Race to Break Records
Despite the inflation noise, the major indexes continue to push higher. The Dow Jones jumped 1.7% last week and even broke its late-November record. The S&P 500 added 0.9% and the Nasdaq was up 0.8%.
Small caps stole the show, with the Russell 2000 surging 3.1% and reaching its highest level in six months.
Sectors like homebuilders, airlines, financials, and biotechs also had strong weeks, which shows the rally is broadening out beyond just tech. Oil dropped to about $62.80 a barrel, and the 10-year Treasury yield edged up to 4.325%. That mix tells you investors are optimistic but still cautious about inflation and growth.
Wall Street Favourites Hit Buy Signals
Several big players are sitting near key buy zones. Tesla popped above $338 earlier in the week but closed around $330. It still has an official buy point at $367.
Micron got a lift after raising guidance on AI demand, climbing near $129 before pulling back a bit. AppLovin dipped nearly 4% but held above its base and looks ready for another move if momentum picks up.
These moves matter because they show how traders are still leaning into growth names, especially around AI and chips, even when there’s short-term pressure.
What’s Cooking for Investors
Right now, the overall trend is still positive. The S&P and Nasdaq are at fresh highs, and the Dow is leading again. Growth ETFs like ARKK and ARKG posted strong gains, and sector ETFs in homebuilders and airlines showed real strength too.
However, some AI names cooled off after weak guidance from companies like Applied Materials and Cisco.
If Powell signals cuts this week, the rally could have another leg higher. For investors, it’s about staying invested but being smart with diversification. Keep an eye on retail earnings too, with Walmart, Home Depot, and Lowe’s all reporting this week.
The big takeaway is that momentum is still on the side of the bulls, but markets are waiting for Powell’s green light to keep running.
