Weekend Market Report-8/30/26-Jobs Report on Friday Will Be Big
Equities finished the week higher even after a soft Friday. The S&P 500 closed at 7,711.76, up about 0.5% on the week. The Dow ended near 53,560, also up about 0.5%. The Nasdaq gained about 0.8%. Small caps lagged; the Russell 2000 fell about 1.5%. That split tells you the story: mega-cap tech and software carried the tape; breadth was not as strong.
Three things drove the week: Fed Chair Kevin Warsh’s first Jackson Hole speech, Nvidia’s earnings, and a sharp weekly drop in crude.
Warsh: Inflation First
Warsh’s Jackson Hole debut was the policy event. The message was hawkish in tone, even if he refused to pre-commit to a September hike.
He said policymakers must be “confident that underlying inflation is moving to our objective, clearly and at sufficient speed. Otherwise, we have work to do.” He also said recent better CPI/PCE prints do not prove the underlying trend has improved, that financial conditions do not look very restrictive, and that short-term rates remain the Fed’s main tool. PCE is still running about 3.7% year over year, with the six-month pace hotter.
Markets heard it. Odds of a September hike jumped from the mid-30s to around 60%. Stocks dipped Friday but did not break. Bonds were mixed: the 10-year finished the week near 4.68%. The takeaway for traders is simple. The Fed is not easing. The debate is hold versus hike, not cut. That keeps a lid on multiples and favors quality over speculative junk.
Nvidia: the AI trade is not dead
Nvidia reported Wednesday after the close, and it was another beat-and-raise. Revenue came in at about $96.2 billion, more than double a year ago. Data-center sales were about $89 billion. Adjusted EPS was $2.22. Q3 revenue guidance was about $108 billion. The real spark was management’s comment that fiscal 2028 revenue could grow by about 70%, along with an expanded commitment to Amazon GPUs. Jensen Huang called AI at an “inflection point.”
The stock initially faded after hours, then ripped. On Thursday, it was up as much as 9% and added hundreds of billions to market cap. That lift spilled into Broadcom, software, and cybersecurity. Salesforce and CrowdStrike also delivered blowout prints and jumped more than 20%. The AI complex is still the market’s engine. The catch: expectations are so high that even a clean beat can produce a messy tape. Supply-chain and memory-cost comments also remind you that margins are not a free lunch.
Oil: first down week in three
Crude finally broke its winning streak. WTI settled Friday around $83.40. Brent was around $89.31. For the week, WTI fell a bit more than 4%, and Brent more than 5%. Drivers were twofold: talk that more barrels are moving through the Strait of Hormuz, and Warsh’s hike talk, which raises the risk of demand destruction. Flows are still well below pre-conflict levels, so this is a relief dip, not a new bear market in oil. Energy can stay a two-way tape: geopolitics pull it up, Fed hawkishness and better shipping pull it down.
What to expect next week
U.S. markets are open on Monday. Labor Day is Monday, September 7, so this is a full five-day week, followed by a short holiday week.
Watch this calendar:
Tuesday: ISM Manufacturing, JOLTS, construction spending. Broadcom and Dell report. Both earnings will be market-moving.
Wednesday: Beige Book, factory orders; Snowflake earnings.
Thursday: ISM Services, jobless claims. Lululemon and Zscaler report.
Friday: August jobs report. That is the week’s main event after Warsh. A hot payrolls/wage print would reinforce hike odds. A soft print would ease the hawkish tone without changing the “inflation first” stance.
Path of least resistance into Friday: choppy, with the S&P holding the mid-7,600s if Nvidia follow-through stays intact. A jobs surprise plus another hawkish Fed speaker would test that.
When I look at what acted well on Friday, while tech was getting creamed, I see the old faitfuls acting well with great relative strength. The big, solid cash-flow names led, while AI and chips lagged big time. That could be a short-term message or an intermediate-term message from the market. Anyway, the big guys like AMZN, GOOGL, META, AAPL, and MSFT did the heavy lifting on Friday and could continue to lead the market. Software, IGV, also broke out Thursday, led by names like NOW and CRM. Remember that software always does better when the chips are flailing.
Bitcoin and Ethereum gave back some this week, digesting the big move from the week before. Warsh did a good job of shooting silver in gold in the face on Friday as he waxed a bit hawkish.
The indexes are, for the most part, still bullish, with the exception of the Russell 2000, which is the most sensitive to higher rates. IWM broke some bear flag support on Friday and ended the week sitting at or just around its 50-day moving average.
Bottom line
The week was a reminder that the Fed is still an inflation hawk. Oil cooled, which helps the inflation narrative a little. Next week, the jobs report will decide whether September is a hike meeting or another hold. We still live in a constant headline market as we climb the never-ending wall of worry.
Midterm years see historically rough drawdowns, often bottoming in Sept/Oct, but have still finished positive most years, and the 12 months after midterms are one of the strongest windows in the whole cycle.
I will be watching the big-cap names early in the week for follow-through. Names like GOOGL, APPL, AMZN, MSFT. Maybe even NFLX, which has had six up weeks in a row after getting pummeled.
I still like the look of SPCX. Also watching VRT and AAOI on this pullback, but I want to see if support areas hold first.
Chips and memory names look very heavy here; may need to work a little lower before new money commitments.
Software (IGV) has started to lead again, so I am looking for some pullback names in that sector.
Have a great day. See you in the morning.