Powell’s Signal Sends Wall Street Indices to Record Territory
The U.S. stock market staged a violent reversal on Friday as Federal Reserve Chair Jerome Powell delivered his long-anticipated remarks at Jackson Hole, opening the door for a September interest rate cut. The shift electrified equities: the Dow Jones Industrial Average (^DJI) surged nearly +903 points (+2%) to a fresh high of 45,670.96, the S&P 500 (^GSPC) jumped +1.47% to 6,463.60, and the Nasdaq Composite (^IXIC) climbed +1.69% to 21,434.44. Treasury yields slipped sharply—the 10-year (^TNX) falling 5 bps to 4.26%, and the 30-year (^TYX) easing 3 bps to 4.89%—while the Dollar Index (DXY) slid almost 1% to 95.06. Traders boosted bets for a 25 bp September cut to 91.5% odds, compared with 70% odds earlier in the day. The volatility in futures and bonds confirmed just how quickly Powell’s language recalibrated expectations across markets.
Mega-Cap Technology and AI Leaders React: NVDA, META, GOOGL, AMZN, TSLA
Technology stocks, which had been hit hard earlier in the week amid doubts about the AI trade, rebounded aggressively. NVIDIA (NVDA), after sliding early on reports that it halted supplier work on its H20 chip for China, reversed into positive territory, finishing around $177.21 (+1.28%). CEO Jensen Huang confirmed in Taiwan that NVIDIA is in talks with the U.S. government to offer a “B30A” Blackwell-based chip to China, subject to export approval. Meta Platforms (META) gained +1.69% to $751.58, supported by its newly announced $10 billion six-year cloud deal with Alphabet (GOOGL). Alphabet itself rallied +2.16% to $204.96. Amazon (AMZN) rose about +2% while Tesla (TSLA) jumped nearly +5%, regaining momentum after a bruising August. The moves showed that despite political pressure and export restrictions, mega-cap tech remains the market’s center of gravity.
Sector Rotation: Housing, Banks, and Cyclicals Surge
The rate-sensitive sectors lit up as yields collapsed. The SPDR S&P Homebuilders ETF (XHB) soared +5%, with Builders FirstSource (BLDR) ripping +8%, while PulteGroup (PHM), Toll Brothers (TOL), and D.R. Horton (DHI) each advanced +5–6%. Regional banks surged as the SPDR S&P Regional Banking ETF (KRE) jumped +4.58% to $64.62. Large banks followed: Goldman Sachs (GS) and American Express (AXP) climbed nearly +4% each. The breadth was extraordinary—on the NYSE, advancers outnumbered decliners by more than 12-to-1. For investors, this was not just a mega-cap story; the rally was systemic.
Earnings Tape: ZM, ROST, BJ, INTU, WDAY
Corporate earnings played a pivotal role in stock-specific volatility. Zoom Video (ZM) exploded +10.8% to $81.07 after posting EPS of $1.16 versus consensus of $0.72, with Enterprise revenue up 7% and churn steady at 2.9%. Ross Stores (ROST) rallied ~4% after topping sales expectations, following solid reports from TJX Companies (TJX) earlier in the week. By contrast, BJ’s Wholesale (BJ) cratered –8% to $97.66 as quarterly revenue of $5.38B missed the $5.48B estimate, despite EPS of $1.14 beating forecasts. Comparable club sales fell 0.3%, though ex-gas comps rose 2.3%. Membership fee income jumped +9% to $123M, showing resilient consumer engagement even as fuel dynamics cloud top-line. Intuit (INTU) slumped –4.91% to $663.53, warning of slower growth at 14–15% for Q1 versus expectations of 15.9%. Workday (WDAY) slipped after guiding its Q3 subscription revenue at $2.24B, in line with consensus, but cited weakness in government and education clients.
Crypto and Blockchain Proxies Rip Higher: ETH, BTC, MSTR, COIN, HOOD
Digital assets mirrored equities as traders priced in looser policy. Ethereum (ETH-USD) jumped +8.6% to above $4,600, brushing against its 2021 high of $4,866. Bitcoin (BTC-USD) advanced +2.7% to $116,275, with Solana (SOL-USD) and XRP (XRP-USD) also climbing ~4%. Equity proxies surged: MicroStrategy (MSTR) +5.20% to $355.14, Coinbase (COIN) +6.6%, Robinhood (HOOD) +4.2%, and Circle (CRCL) +9.6%. Liquidity-sensitive assets remain the sharpest beneficiaries of falling yields and a weaker dollar.
China EV Competition: NIO and TSLA in Spotlight
NIO (NIO) ripped +16.88% to $6.47 after unveiling its new ES8 SUV priced from 308,800 yuan (~$43,000) under a battery subscription plan, which lowers upfront costs and lets customers upgrade batteries monthly. Deliveries are scheduled for September. The affordability push raises competitive pressure on Tesla (TSLA) in China, where demand is slowing. Tesla’s own stock climbed ~+5%, reflecting both the macro lift and EV enthusiasm, but the market will monitor whether margin compression intensifies in Shanghai.
Broad Indices and Equal Weight Strength
The rally’s breadth was confirmed as the Invesco S&P 500 Equal Weight ETF (RSP) hit a record high at $189.62 (+2.02%), outperforming the traditional cap-weighted SPDR S&P 500 ETF Trust (SPY). The Russell 2000 (RUT) surged +3.75% to 2,359.33, extending small-cap outperformance. This shift signals the rally is no longer pinned to only the Magnificent Seven; it’s now systemic, pulling in financials, builders, cyclicals, and industrials.
Insider Activity and Market Positioning
Institutional flows remain underweight in mega-cap tech stocks—NVDA, MSFT, AAPL, AMZN, GOOGL, META—by roughly 140 basis points relative to their S&P 500 weight, the weakest allocation in 16 years. Historically, such under-ownership has coincided with strong forward returns, especially when earnings growth remains intact. Watch for insider transactions across cyclicals and tech. If banks and builders show cluster insider buying into September, it would strengthen the bullish case; conversely, accelerated selling in AI semis would argue for trimming exposure.
Technical Levels and Tactical Calls
S&P 500 (^GSPC): Resistance looms at 6,500–6,520; holding above 6,350 is constructive.
Dow (^DJI): Breakout above 45,500 sets up a run toward 46,000.
Nasdaq (^IXIC): Needs 21,600 cleared to reclaim leadership; NVDA earnings will be key.
Russell 2000 (^RUT): Strong momentum; potential to lead if September cuts materialize.
Equal Weight RSP: Fresh highs confirm breadth.
Verdict: Buy, Hold, Sell
^GSPC — Buy. Broadening participation, easing yields, and record-high leadership favor higher ground toward 6,650 if September delivers a cut.
^DJI — Buy. Industrials and financials at new highs show durable strength; momentum remains intact.
^IXIC — Hold. AI headline risk tempers conviction, but dips remain buyable if NVDA guidance is constructive.
^RUT — Buy. Lower yields directly support refinancing and small-cap leverage; this remains the index with the most room to run.
NVDA — Buy. Despite China restrictions, secular AI demand and U.S. export workarounds leave upside; watch margins and backlog disclosure.
META, GOOGL — Buy. Cloud deal reshapes capex profiles; structural growth intact.
AMZN — Buy. Macro + consumer relief plus AWS stabilizing make it a winner in easing-rate cycles.
TSLA — Hold. Macro tailwind, but China price war risk holds margins in check.
ZM — Hold/Accumulation. AI monetization traction is clear, but execution risk remains.
INTU, WDAY, BJ — Hold. Guidance and fundamentals cautious; wait for stabilization before re-rating.
Crypto proxies (MSTR, COIN, HOOD) — Tactical Buy. Short-term plays on rate-cut liquidity flows.
