S&P 500 Weekly Update for August 25-29, 2025

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Weekly Market Update Summary (August 18–22, 2025)
Outlook for August 25-29, 2025:
Market Performance (August 18–22):
The week was relatively quiet with below-average trading volume, typical for summer.
The S&P 500 rose 0.27% for the week, driven by a strong Friday session (up over 1.5%) following Federal Reserve Chair Jerome Powell’s Jackson Hole speech hinting at potential rate cuts in September.
The Dow hit an all-time closing high, up 1.5%. Small caps (Russell 2000) surged 3.3%, and mid-caps rose 2.6%. The NASDAQ lagged, declining 0.6%.
Small caps and cyclical sectors led gains, while mega-cap tech faced headwinds.
Energy, real estate, and materials sectors performed well; tech and communication underperformed.
Key Market Dynamics:
Market Sentiment: The market shifted from a defensive posture to a "risk-on" tone after Powell’s speech, though volume remained low, suggesting limited participation from "smart money."
Inflation Concerns: Last week, PPI indicated inflationary pressure, causing market apprehension. Focus is shifting to the upcoming core PCE report this Friday.
Fed Policy: Powell’s dovish comments fueled optimism, but mixed Fed signals (e.g., Cleveland Fed’s Beth Hammock highlighting inflation but was mostly ignored on Friday) created a mixed picture.
Overhead Resistance: The S&P 500 is testing resistance at 6468, failing to close above it for two weeks. A breakout requires mega-cap tech strength.
Geopolitical Factors: Russia-Ukraine peace talks and Middle East tensions remain in the background but could impact markets if escalated.
Technical Indicators:
Weekly charts show a weakening trend (ADX below 20), but remains positive (green line above red). Daily charts indicate short- and intermediate-term weakening trend.
Advance-decline lines are at all-time highs, but volume is lagging price, signaling potential caution.
Sentiment is neutral, with no extreme bullish or bearish readings. The VIX is declining but could rise seasonally in late August–October.
Momentum indicators (e.g., RSI, StochRSI) are positive but showing signs of slowing, with some (e.g., Coppock Curve) indicating a potential slowdown.
Sector and Asset Trends:
Defensive sectors (healthcare, staples, energy) are holding up, while growth areas (tech, communication) are lagging.
Small caps and cyclicals benefit from lower interest rate expectations.
Bonds are in a short- and intermediate-term uptrend; commodities are positive; the dollar remains weak, supporting stocks.
Interest rates dropped slightly (10-year yield at 4.26%), but Japan’s rising yield is a concern.
Looking Ahead (August 25–29):
Focus on the core PCE report, which could influence Fed rate cut expectations (75% chance of a cut on September 17).
Continued monitoring of overhead resistance and mega-cap tech performance to determine if the rally has legs or if a defensive shift resumes.
Seasonally, late August to September is weak, with post-election years historically negative for August.
Investors should watch for follow-through on Friday’s rally and potential volatility from geopolitical developments or economic data surprises.
Conclusion:
The S&P 500’s late-week rally was emotionally driven by Powell’s dovish stance, but low volume and mixed signals suggest caution. While small caps and cyclicals led, mega-cap tech’s weakness and overhead resistance pose challenges. Investors should stay vigilant for economic data and Fed policy updates.

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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!