Market Recap
The major indices started the week on solid footing, with SPY and QQQ grinding higher into Nvidia earnings on Wednesday evening.
NVDA delivered another strong report and outlook, initially sending shares sharply higher and helping push the broader AI and semiconductor trade higher on Thursday. The Nasdaq gained 1.6% on the session, while NVDA closed up nearly 9%. However, there was little follow-through into Friday, with NVDA giving back much of the move and the broader market falling back into its recent range.
The main macro catalyst came on Friday with Fed Chair Kevin Warsh’s first Jackson Hole speech. Warsh struck a noticeably hawkish tone, emphasizing that inflation remains above the Fed’s 2% target and that recent softer inflation readings have not yet demonstrated a meaningful improvement in the underlying trend. He also described financial conditions as not particularly restrictive, leaving the door open to further tightening if inflation fails to improve.
Markets quickly repriced the path for rates. The implied probability of a September rate hike jumped from roughly 35% before the speech to around 56-60% afterward, putting a near-term hike firmly back on the table. Treasury yields and the dollar moved higher in response.
The shift in rate expectations weighed most heavily on the more rate-sensitive areas of the market. IWM was notably weak, with the Russell 2000 falling around 1.5% for the week, while XBI and biotech stocks also came under pressure. This left a clear divergence beneath the surface, with the headline indices holding up relatively well while small caps and other rate-sensitive groups weakened.
Gold was also hit following Warsh’s comments as yields and the dollar moved higher, reversing some of its recent strength.
Crypto was comparatively uneventful. BTC and ETH mostly chopped sideways throughout the week, consolidating after the recent move higher rather than providing much directional momentum.
Watchlist
CRM reported earnings last week alongside the announcement of its ClaudeForce partnership with Anthropic, producing a strong reaction in the stock. More broadly, software has been one of the stronger areas of the market recently, making CRM worth watching, even if there isn’t anything immediately obvious to action.
NOW PLTR are two other software names showing relative strength and remain on watch if momentum in the group continues.
NVDA remains in focus following earnings, although the largest moves were likely captured over the two sessions surrounding the report. Despite the initial positive reaction, the stock has ultimately moved back toward the middle of its broader daily range, leaving the setup less compelling unless it can begin expanding out of that range again.
IBIT ETHA / BTC ETH have now traded mostly sideways for the past two weeks following the initial breakout rally. The consolidation has tightened and could resolve in either direction. Rather than anticipating the move, the focus will be on waiting for price to break from the current range and then looking for momentum to follow.
With expectations for another rate hike increasing and IWM showing notable weakness, rate-sensitive and unprofitable growth companies could remain under pressure. One group setting up particularly well to the downside is quantum computing.
QBTS RGTI are both firmly below their 50-day and 200-day moving averages and remain in Stage 4 declines. Any weak bounces into resistance could provide opportunities for continuation lower, particularly if small caps and speculative growth remain under pressure.
Closing Thoughts
Friday’s action put a halt to the market’s recent leg higher. With NVDA moving back into its range, SPY, QQQ and much of the semiconductor group are once again sitting around the middle of their recent consolidation ranges, leaving little clear directional edge.
The main exception is IWM, where the shift in rate expectations has created more meaningful weakness and pushed small caps toward a potential breakdown.
Software and crypto remain two of the stronger areas of the market, but it is difficult to expect sustained momentum if the broader indices continue to lack direction. There can still be opportunities within individual themes and catalysts, but the overall environment looks increasingly selective.
For now, it appears we may have re-entered a sideways, choppy regime, particularly as we head into September. Rather than forcing trades in the middle of these ranges, the focus shifts back toward patience and waiting for cleaner setups and stronger momentum to emerge.
If you enjoyed this read, please consider leaving a like on the post, and let me know in the comments if I missed anything or what you’re watching for this week!
P.S.
If you haven’t checked out the Valhalla Portal yet, it’s where I track catalysts, setups, and market activity in real time - a live feed of everything that moves the tape, built for the community. I’ll be doing a dedicated post soon walking through all the features in detail, so stay tuned for that. In the meantime, you can check it out here: