Stocks slipped on Friday, but still closed out a winning week. The reason for the late wobble came from Jackson Hole: in his first keynote as Federal Reserve Chair, Kevin Warsh made clear he isn’t satisfied that inflation is beaten and traders quickly moved a September rate hike from a maybe to the base case.
Even so, Thursday’s Nvidia-driven surge was big enough to carry all three major indexes higher on the week.
The Close
| Index | Close | Day/Week |
|---|---|---|
| Dow Jones | 53,559.99 | −0.02% / +0.5% wk |
| S&P 500 | 7,711.76 | −0.25% / +0.5% wk |
| Nasdaq 100 | -0.69% / +0.35% wk |
The Dow’s weekly gain was its first in three weeks. The Friday drag came mostly from chips: Nvidia and Intel slipped, and the broader semiconductor group gave back some of Thursday’s jump.
What Moved the Market: Warsh Goes Hawkish
The whole session turned on one speech. Warsh said the summer’s better inflation readings did not convince him that the underlying trend has truly improved, and that the Fed still has “work to do.”
In plain terms, he signaled he is leaning toward raising rates rather than holding. BMO called it a deliberately hawkish message.
Markets responded fast: the odds of a September rate hike jumped to about 57.5%, up from roughly 35% just a day earlier. Short-term Treasury yields, which track Fed expectations most closely, spiked, the 2-year rose more than 6 basis points (0.06%) to about 4.30% while longer-term yields stayed roughly flat.
Movers and a Softer Jobs Signal
Away from the Fed, earnings still drove single names. Marvell Technology fell more than 10% after its profit-margin guidance disappointed and investors were underwhelmed by the payoff from its new AI-chip deal with Google. Gap jumped about 13% after naming a new boss for its struggling Old Navy brand, even though the quarter was mixed.
There was also a notable data point buried in the day: an annual government revision showed the US economy had roughly 79,000 fewer jobs as of March than first reported (private payrolls were cut by about 178,000), a hint that hiring has been softer than the headline numbers suggested.
Across Other Markets
| Market | Level | What Moved It |
|---|---|---|
| 2-yr Treasury | ~4.30% | Spiked ~6bp on the hawkish speech — the clearest sign of rising hike bets |
| 10-yr Treasury | ~4.68% | Roughly flat; long-end held as short-end did the moving |
| US Dollar (DXY) | ~99.1 | Firmed to about a one-week high as hike odds and short yields rose |
| Crude oil (WTI) | ~$82.9 | Slipped, snapping a two-week win streak, even with Hormuz risks lingering |
| Gold | low ~$4,531 | Sold off sharply after the speech as a firmer dollar and hike bets hit bullion |
Key Risks for Next Week (Week of August 31)
It’s a jobs week, and it lands right after Warsh hardened his stance, so every labor number now carries extra weight for the September decision. Note it is a full trading week; the Labor Day holiday falls the following Monday, September 7.
Scenario Matrix for Next Week
| Risk | Why it Matters | Watch |
|---|---|---|
| August jobs report | The swing factor. A strong print likely locks in a September hike; a weak one reopens the debate | Fri, Sep 4 |
| Labor-market run-up | JOLTS, ADP and jobless claims set the tone before payrolls — and Friday’s revision already hinted hiring is softer | Tue–Thu |
| Rate-hike repricing | Short-term yields are climbing; rate-sensitive tech and growth stocks are the most exposed | All week |
| AI-trade durability | Semis wobbled into the weekend (Marvell, Nvidia). The test is whether tech holds up as hike bets rise | All week |
| Yields & geopolitics | Long-end yields sit near multi-decade highs; oil, Hormuz, Russia–Ukraine and US–Canada tariffs (plus a Bank of Canada decision) can jolt inflation bets | Ongoing |
The through-line: with a hike now the base case, good economic news is once again “bad news” for stocks, because it hands Warsh the cover to tighten.
All of it feeds into the Fed’s rate decision a little over two weeks away.
