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Last Updated: 20-Aug-25 09:04 ET | Archive
Weighed down by the weight of expectations in front of Powell speech
Briefing.com Summary:
*Mega-cap weakness is acting as a drag on the market, while value stocks and the equal-weighted S&P 500 show relative strength.
*Earnings reports are sparking single-stock moves but not moving market sentiment.
*Investor caution persists in front of Powell's Jackson Hole speech on Friday.
So far this week, the participation has been light (evidenced by lower-than-average volume), the mega-cap stocks have been weak (evidenced by the Vanguard Mega-Cap Growth ETF being down 1.6%), and there has been some rebalancing (evidenced by the equal-weighted S&P 500 being up 0.5% and the Russell 3000 Value Index being up 0.3% versus the Russell 3000 Growth Index being down 1.4%).
There has also been a slate of earnings results from some widely held companies, none of which have moved the broader market with any conviction.
That includes companies such as Home Depot (HD), Palo Alto Networks (PANW), Medtronic (MDT), Toll Brothers (TOL), and another gaggle this morning that has featured Target (TGT), Lowe's (LOW), TJX Cos. (TJX), Estee Lauder (EL), and Analog Devices (ADI).
Currently, the S&P 500 futures are down six points and are trading 0.1% below fair value, the Nasdaq 100 futures are down 43 points and are trading 0.2% below fair value, and the Dow Jones Industrial Average futures are down six points and are trading in line with fair value.
Target is a downside outlier. Its stock is down 10% even though the company topped some downtrodden quarterly sales and EPS expectations and reaffirmed its FY26 outlook. Reportedly, there is some investor dismay that Target appointed an insider, the current COO, to become the new CEO, effective February 1, 2026.
TJX, Lowe's, and Analog Devices are all trading higher after their results, but the point remains that they aren't moving the market, which is being weighed down by continued softness in the mega-cap issues.
The market is also being weighed down by the weight of expectations leading up to Fed Chair Powell's speech on Friday at the Jackson Hole Symposium. The uncertainty of what might be said there to signal a possible rate cut in September—or not—is keeping investor conviction under wraps.
That is true in the Treasury market, just as it is in the stock market. For the week, the 2-yr note yield is down one basis point to 3.75%, and the 10-yr note yield is down two basis points to 4.30%.
There isn't any U.S. economic data of note today to stir things up, although Japan reported a 7.5% year-over-year decline in July imports and a 2.6% year-over-year decline in exports; meanwhile, the eurozone registered a 2.0% year-over-year increase for July CPI and a 2.3% year-over-year increase for core CPI.
Several central banks were out with rate decisions today. The People's Bank of China left its loan prime rates unchanged; the Reserve Bank of New Zealand cut its policy rate by 25 basis points to 3.00%; Bank Indonesia cut by 25 basis points to 5.00%; and central banks in Sweden and Iceland left their policy rates unchanged at 2.00% and 7.50%, respectively.
The next FOMC policy decision won't come until September 17, but the minutes for the July 29-30 FOMC meeting will be released at 2:00 p.m. ET today. Those minutes will be scrutinized to see how close the hawks (i.e., those who didn't favor a rate cut) might have been to joining Fed Governors Waller and Bowman in seeing the opening for a rate cut.
In related news, President Trump is calling on Fed Governor Lisa Cook to resign amid allegations raised by FHA Director Pulte that she might have committed mortgage fraud, according to Bloomberg.
Never a dull moment these days when it comes to the Fed.
