S&P 500 Daily Update for Monday August 25, 2025

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Market Summary for Friday, August 22, 2025:
Outlook for Monday, August 25, 2025:
Market Performance:
Positive Reaction to Powell’s Speech: Fed Chair Powell’s speech signaled openness to a September rate cut, boosting market sentiment. The Dow hit a new all-time high, while the S&P 500, NASDAQ, and NASDAQ 100 did not, though they rebounded.
Market Gains: The S&P 500 rose 1.52%, closing above the R3 pivot point at 6454 but below the key resistance of 6468. Small and mid-cap stocks outperformed, benefiting from falling interest rates (10-year yield dropped to 4.26% from 4.33%).
Volume and Sentiment: Volume increased but remained below average. Market sentiment improved from neutral (53) to positive (61), with short-term trends turning positive after reclaiming the 20-period moving averages.
Key Indicators:
Growth vs. Value: Growth slightly outperformed value, but the market remains defensive, with value stocks showing strength, especially in small and mid-caps.
Technical Indicators: Short-term indicators such as the Williams %R and short-term stochastics are extremely positive. Intermediate-term indicators, such as the Chande Trend Meter, are improving but not yet extreme positive. Long-term indicators show the market is becoming stretched relative to the 150- and 200-period moving averages.
Breadth and Momentum: Short-term breadth broke out, and longer-term breadth hit year-to-date highs. Momentum is mixed due to low conviction and an emotional reaction to Powell’s speech.
Notable Developments:
U.S. Stake in Intel: The U.S. government is taking a 10% stake in Intel, a move not seen since the 2008 financial crisis, sparking debate among free-market advocates.
Sector Performance: Most sectors rose, with discretionary leading, though staples were unchanged. The financial sector and small caps (S&P 600 up 3.8%, Russell 2000 up 3.92%) performed strongly.
Magnificent Seven: Stocks such as NVIDIA, Microsoft, Apple, and Tesla saw gains, but their outperformance is narrowing as other S&P stocks participate more.
Economic and Policy Context:
Fed’s Stance: Powell indicated that high rates in restrictive territory might warrant a policy adjustment, reinforcing expectations of a rate cut. However, Cleveland Fed President Hammack expressed inflation concerns, though her hawkish stance had little market impact.
Economic Data: No major reports were released on Friday, but upcoming data includes new home sales (Monday), durable goods (Tuesday), initial jobless claims, GDP, core PCE, personal income/spending, and consumer sentiment (Friday).
Outlook for Monday, August 25, 2025:
Positive Bias: The market is positive across short, intermediate, and long-term timeframes, but faces resistance at 6468 on the weekly S&P 500 chart. A defensive posture persists, with value outperforming growth in some areas.
Key Risks: Overhead resistance, geopolitical developments, or trade/tariff news over the weekend could impact markets. Upcoming economic data, particularly Friday’s core PCE, will be critical for rate cut expectations.
Seasonality: August 25 has been neutral to positive, but negative seasonality typically emerges in September and October, which could challenge the current uptrend.
Conclusion:
The S&P 500 rallied on Powell’s rate cut signals, with the Dow setting a record high and small/mid-caps leading. While technicals and sentiment are improving, low volume and defensive positioning suggest caution. Overhead resistance at 6468 remains a hurdle, and upcoming economic data will shape expectations for a potential September rate cut.

PDF of Slides:
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DISCLAIMER This video is for entertainment purposes only. I am not a financial adviser, and you should do your own research and go through your own thought process before investing in a position. Trading is risky!