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WTF Dailies August 22, 2025

US stock futures were mixed as Wall Street readied for the main event of the week: Federal Reserve Chair Jerome Powell's speech at the Jackson Hole symposium in Wyoming.

Sage Kakkat

21 Aug 2025 — 7 min read

US stock futures were mixed as Wall Street readied for the main event of the week: Federal Reserve Chair Jerome Powell's speech at the Jackson Hole symposium in Wyoming.
Stocks swung last week as Fed policy predictions shifted. After July's Consumer Price Index (CPI) report showed inflation had increased at a pace that was in-line with analysts' expectations, rate-cut bets surged, sparking a two-day stock rally. However, a second check on inflation that week, July's Producer Price Index report, came in hotter-than-expected and abruptly threw cold water on rate-cut hopes and stocks' march higher.
This week, more signs that a rate cut may not be imminent piled up. Minutes from the Federal Reserve's last meeting showed that the two officials who dissented from the decision to hold rates steady in July were largely alone in their opinion. The minutes also indicated inflation was more of a concern for officials than labor market weakness. Finally, two policymakers, Jeffrey Schmid and Beth Hammack, expressed wariness over a September rate cut on Thursday.
Meanwhile, President Trump has continued a pressure campaign on the Federal Reserve, publicly bashing Powell and, more recently, calling for the resignation of Fed governor Lisa Cook for alleged mortgage fraud. His tariff policy also continues to evolve with its ultimate impact on inflation difficult to predict.
Against this backdrop, Powell's speech has investors on edge. His remarks are set to not only shake up rate-cut bets but also shape monetary policy for years to come.
Amid the countdown to his Jackson Hole remarks, stocks slipped on Thursday. Disappointing Walmart (WMT) earnings and hotter-than-expected jobless claims data contributed to a dip in sentiment.
Most Asian stocks rose on Friday, although gains were muted as investors hunkered down in anticipation of more cues on U.S. interest rates from an upcoming address by Federal Reserve Chair Jerome Powell.
Japanese shares were a mixed bag as consumer inflation data for July showed price growth remaining well above the Bank of Japan’s annual target, a trend that could push the bank into raising interest rates further.
Regional markets took middling cues from a negative session on Wall Street, as technology shares continued to decline, while mixed earnings from Walmart (NYSE:WMT) also weighed.
Japan’s Nikkei 225 index moved in a tight range, while the broader TOPIX index added 0.4%.
Japanese consumer price index inflation cooled in July, data showed on Friday. But core inflation cooled slightly less than expected, while underlying inflation also remained well above the BOJ’s 2% annual target.
Sticky inflation puts more pressure on the BOJ to hike interest rates, with analysts seen penciling in at least one rate hike by end-2025. Such a scenario bodes poorly for Japanese shares.
Broader Asian stocks advanced on Friday, with most regions set for middling weekly performances after sharp losses earlier this week.
Chinese markets, however, outpaced their peers on expectations of more stimulus from Beijing. Non-tech sectors, which represent a greater portion of mainland markets, also benefited from buying as investors pivoted out of tech en masse.
The Shanghai Shenzhen CSI 300 and Shanghai Composite indexes rose 0.7% and 0.3%, respectively, on Friday, and were trading up between 2% and 3% this week.
The CSI300 was at a 10-month high, while the SSEC scaled a nine-year peak.
Hong Kong’s Hang Seng index rose 0.4% but was trading down mildly for the week, amid weakness in tech shares and a mixed crop of second-quarter earnings.
Australia’s ASX 200 fell 0.2%, but was set for mild weekly gains after racing past the 9,000 point level for the first time ever.
South Korea’s KOSPI rose 0.9%, extending a rebound from recent losses. But the index was set to lose nearly 2% this week on an extended rout in tech shares.
India’s Nifty 50 index fell 0.5% on Friday, but was trading up 1.5% this week. Strong Indian PMI data and promises of reform from the government helped investors look past concerns over higher U.S. trade tariffs against India over its purchases of Russian oil.
Singapore’s Straits Times index rose 0.2% and was trading up 0.3% this week.

Market Close

The Dow surged to new highs following Fed Chair Jerome Powell’s highly anticipated speech at Jackson Hole, where he opened the door to a potential rate cut in September. While reiterating the Fed’s data-dependent approach, Powell acknowledged recent soft labor-market data, reinforcing market expectations for easing. In response, bond yields and the dollar declined, while equities rallied, particularly rate-sensitive sectors.
Small-caps jumped nearly 3.8%, with value-style and cyclical stocks outperforming. The consumer sector led gains within the S&P 500.
The Jackson Hole symposium has historically been a venue for signaling major policy shifts, and this year was no exception. Powell’s remarks suggested a growing bias toward easing, stating that “the shifting balance of risks may warrant adjusting our policy stance.” We think this reflects two key points: current policy remains restrictive, and downside risks to employment are increasing. While a rate cut isn’t guaranteed—with one more CPI and jobs report due before the September 17 meeting—the Fed appears inclined to act.
Market pricing now reflects nearly an 80% probability of a cut, up from 70% last week. From an investment perspective, potential beneficiaries include rate-sensitive and cyclical industries such as homebuilders, real estate, and banks.
Along with the Fed's preferred measure of inflation, investors will likely be paying close attention to NVIDIA's earnings results, which are scheduled to be released on Wednesday after the market close. NVIDIA’s significance is underscored by its massive $4.2 trillion market capitalization, now representing 8% of the S&P 500.
Demand and investment in artificial intelligence (AI) remain robust, with AI-focused companies driving much of the market’s gains this year; however, elevated valuations appear to have sparked renewed skepticism, contributing to a pullback in the Nasdaq this week. A recent MIT report added to the caution, revealing that 95% of surveyed firms have yet to see returns on their generative AI investments. That said, investors are likely to scrutinize profitability more closely than in the past, given the heightened expectations.

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