Last week, major U.S. stock indexes experienced gains, with the Nasdaq Composite up 2.16%, the S&P 500 increasing by 1.02%, and the Dow Jones Industrial Average rising 0.29%. The tech-heavy Nasdaq outperformed due to a rally in AI and technology stocks, notably bolstered by NVIDIA’s strong revenue outlook. Conversely, concerns about inflation and potential Federal Reserve rate hikes limited upside potential.
In July, PCE inflation rose 3.7% year over year and core PCE increased 3.3%, significantly above the Fed’s 2% target. Consumer spending growth slowed to 0.2%, while personal income rose 0.4%. The GDP growth rate for Q2 was confirmed at 1.5%, down from 2.1% in Q1. Meanwhile, weekly jobless claims fell to 203,000 and durable goods orders climbed 1.1%.
Despite the mixed economic signals, investor sentiment was influenced by Fed Chair Kevin Warsh’s remarks on persistent inflation, which led to increased expectations for a September rate hike. Overall, while the economy continues to advance, challenges such as inflation and declining consumer confidence present considerable hurdles.
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