Major U.S. stock indices delivered another solid week of gains, with the SPY (S&P 500) climbing 0.98%, QQQ (Nasdaq) advancing 0.49%, and DIA (Dow Jones Industrial Average) leading with a 1.72% rally. The Dow touched a new intraday record high for the first time since December, but did not close at a record high, while both the S&P 500 and Nasdaq achieved new all-time highs during the trading week.

The week’s momentum was driven by inflation data that reinforced expectations for Federal Reserve rate cuts. July’s Consumer Price Index held steady at 2.7% annually, matching June’s rate and coming in below the 2.8% consensus forecast. This cooler-than-expected reading boosted investor confidence that the Fed will begin cutting rates at its September meeting, with CME FedWatch now showing a 92.1% probability of a quarter-point reduction.

The earnings landscape remained relatively quiet during the week, with most major companies having already reported second-quarter results. Second-quarter earnings season has proven largely positive. Technology stocks continued to provide market leadership, though breadth concerns persist as only 24% of S&P 500 stocks are outperforming the index over the past 60 days.

The coming week centers on the Federal Reserve’s Jackson Hole Economic Policy Symposium, where Chair Jerome Powell’s Friday keynote will be closely watched for signals about the pace and magnitude of potential rate cuts. A packed earnings calendar features retail bellwethers Home Depot, Target, and Walmart that will provide crucial insights into consumer spending patterns, while Intuit offers glimpses into small business health. 

📅 Wednesday, Aug 20th

• FOMC Meeting Minutes: The minutes of the July FOMC meeting will be published and will detail how participants weighed inflation risks against growth concerns. Investors often parse the minutes for the balance of views on keeping the federal funds rate at its current 4.25%–4.50% target range, as well as the frequency of references to “soft landing” scenarios versus “upside risks” to inflation.
  
  Traders should also monitor any discussion of the Fed’s balance sheet strategy, although no changes to the current approach are anticipated, and watch for hints on the trajectory of interest rates in 2025 based on the June Summary of Economic Projections, which showed a split among participants on whether to cut rates next year.

📅 Thursday, Aug 21st

• Unemployment Claims: Initial weekly jobless claims are expected to rise modestly to 226,000 following the prior reading of 224,000, reflecting a still-tight labor market that could temper rate cut expectations. Market participants should watch for any significant deviation from the 226,000 forecast, a drop could strengthen equities on resilient growth hopes. Additionally, revisions to the previous week’s 224,000 figure and changes in continuing claims will offer key insights into underlying labor market momentum and Federal Reserve policy direction.
  
• Flash Manufacturing PMI: The upcoming report follows a July reading of 49.8 and is expected to edge up to 49.9, indicating a still-subdued manufacturing sector just below the 50 expansion–contraction threshold. Market participants should watch the new orders subindex, which was 47.1 in July, and the employment index, which fell to 43.4, its lowest in five years. Supplier delivery times were 49.3 and input prices were 64.8, both key for assessing supply chain pressures, cost trends, and potential central bank policy implications.
  
• Flash Services PMI: The upcoming report for August is forecast at 53.3, down from July’s robust 55.7, indicating a deceleration in service-sector expansion. Investors should also focus on the new orders sub-index, as a drop below the 50 mark would signal contracting demand ahead of the full report. The business activity index will reveal whether service output continues growing above the breakeven 50 level or slips toward stagnation. Traders must watch the prices-paid component, with a rise above July’s 69.9 reading potentially foreshadowing higher input-cost pressures. Finally, the employment index, currently at 46.4, will be crucial for assessing labour-market resilience and its implications for consumer spending.

📅 Friday, Aug 22nd

• Fed Chair Powell at Jackson Hole Symposium: The 47th annual symposium will take place August 21–23, in Jackson Hole, Wyoming, bringing together roughly 120 central bankers, academics, and market participants to discuss “Labor Markets in Transition: Demographics, Productivity, and Macroeconomic Policy.”
  
  Fed Chair Jerome Powell’s keynote will be closely watched for any signals on the projected terminal federal funds rate, currently 4.25%–4.50%, and for potential updates to the Fed’s 2025–2026 dot plot forecasts. Markets will parse his comments on inflation, and on labour-market conditions, where wage growth and hiring trends remain under scrutiny. Any indication that the Fed views labour-market pressures as persistent could shape expectations for the timing and pace of future rate cuts, influencing rate-sensitive assets.

💼 With earnings season winding down, here are some of the companies reporting this week:

📅 Tuesday, Aug 19th

• Home Depot, Inc. (HD): The Home Depot will report Q2 2025 earnings, with analysts expecting earnings of $4.72 per share (up 1% year-over-year) and revenue of $45.44 billion (5.25% growth). Market participants should focus on three key metrics: comparable sales performance following Q1’s modest 0.3% decline, big-ticket transactions over $1,000, which showed only 0.3% growth in Q1 as higher interest rates continue to pressure large home improvement projects that typically require financing, and progress from the SRS Distribution acquisition, which added $6.4 billion in sales over seven months in fiscal 2024 and is expected to deliver mid single-digit growth this year. The Pro segment now generates nearly 50% of the company’s revenue.

• Medtronic plc. (MDT): Medtronic is set to report its fiscal first-quarter 2026 results, with analysts forecasting EPS of $1.23, unchanged year-over-year. Revenue for the quarter is expected to come in around $8.38 billion, roughly 6% lower than last quarter but up about 4.7% year-over-year. Market participants should focus on segment-level trends, particularly momentum in cardiovascular and neuromodulation franchises, operating margin expansion, and management’s full-year FY 2026 guidance calling for adjusted EPS of $5.50–$5.60 alongside roughly 5% organic sales growth.

📅 Wednesday, Aug 20th

• Target Corporation (TGT): Target reports Q2 2025 earnings, with analysts expecting $2.04 earnings per share (down 20.6% year-over-year from $2.57) and $24.93 billion in revenue (down 2% from the prior year). Market participants should focus on comparable store sales trends after Q1’s concerning 3.8% decline, inventory turnover efficiency, which stood at roughly 6.0x for fiscal 2024, and management’s guidance on operating margins. Key metrics to watch include whether digital sales can maintain Q1’s 4.7% growth, traffic versus average ticket performance (traffic fell 2.4% and average ticket fell 1.4% in Q1), and any updates on the multi-year Enterprise Acceleration Office initiative aimed at improving operational agility in the challenging discretionary retail environment.

📅 Thursday, Aug 21st

• Zoom Communications, Inc. (ZM): Zoom will report Q2 2026 earnings, with consensus estimates of $1.38 EPS (down 0.7% year-over-year) and $1.20 billion in revenue (up 3.4% year-over-year). Market participants should focus on enterprise revenue growth, which has driven recent performance with 5.9% year-over-year growth in Q1, comprising 60% of total revenue, and AI monetization progress as the company’s AI Companion monthly active users surged 68% quarter-over-quarter with custom AI add-ons launched at $12 per user. Key metrics to watch include the net dollar expansion rate for enterprise customers (currently at 98%), Contact Center customer growth, and management commentary on competitive positioning against Microsoft Teams, which holds 32.3% market share versus Zoom’s dominant 55.9% in video conferencing.
  
• Walmart Inc. (WMT): Walmart reports its highly anticipated Q2 2026 earnings, with analysts forecasting earnings per share of $0.73 (an 8.9% year-over-year increase) and revenue of approximately $175.89 billion (up 3.8% YoY). Market participants should closely monitor three critical areas: e-commerce momentum with the digital business contributing ~350 basis points to comparable sales growth and maintaining 20%+ growth rates, and margin expansion driven by the company’s advertising business (Walmart Connect grew 31% last quarter) and membership income growth, which increased 14.8% in Q1. The retailer’s ability to sustain its 4.5% comparable sales growth while expanding its gross margin rate will be a crucial indicator of operational efficiency amid ongoing economic uncertainties and potential tariff impacts.
  
• Intuit Inc. (INTU): Intuit is scheduled to report fiscal Q4 2025 results, with analysts forecasting EPS of $2.66 and revenue of $3.74 billion, implying roughly 17.6% year-over-year top-line growth. Market participants should scrutinize whether Intuit hits or beats its own Q4 guidance of $3.723 billion–$3.760 billion in revenue and EPS of $2.63–$2.68. Key read-throughs may include gross margin trends in the Small Business segment and any updates to full-year FY2026 revenue and EPS guidance, which will set the tone for valuation heading into next fiscal year.

We hope this helps and happy trading!

– Trade and Travel Team