Waller comments and Nvidia news drive chop before August CPI print
September seasonality takes hold as rate fears and dovish Fed signals clash. The desk shifts focus to next week's inflation data after a mixed Friday fade.
The week
The tape is acting exactly like September history suggests. The action is choppy. Participation is narrow. The desk watched SPY open Monday at 767.05. Global bond yields spiked early in the week. Oil stayed stubbornly high on renewed geopolitical tensions. That pressured equities. Tuesday saw a dip down to 761.78. Wednesday stabilized at 765.16.
Thursday shifted the narrative. Buyers stepped in. SPY rallied to 773.17. It was the best day of the week, printing a 1 percent gain across the board. The Nasdaq added 1.4 percent on the day. Friday gave some of that advance back. The tape faded into the close. SPY finished the week at 770.19.
What moved
Indices managed to finish slightly green despite the chop. SPY gained 0.4 percent on the week, closing at 770.19. QQQ added 0.5 percent to close at 718.96. IWM gained 0.3 percent to 296.01. DIA ground out a 0.1 percent gain.
Sector performance was mixed. XLU Utilities took the top spot. The group gained 2.6 percent. This rate-sensitive bid was the direct result of Thursday''s macro news. XLK Technology gained 0.8 percent. XLV Health Care added 0.7 percent. XLE Energy and XLF Financials both gained 0.4 percent.
On the downside, XLY Discretionary was the worst group. It shed 1.4 percent. XLB Materials dropped 1.3 percent. XLP Staples lost 0.9 percent. XLRE Real Estate fell 0.8 percent. XLI Industrials lost 0.5 percent. XLC Communications dropped 0.4 percent.
Friday''s session was soft and defensive. SPY dropped 0.4 percent. QQQ sat flat. IWM added 0.1 percent. Sector rotation on Friday was negative for XLV Health Care and XLY Discretionary. Both dropped 1.3 percent. XLF Financials lost 0.8 percent.
Crypto caught a strong bid early in the week. BTC gained 4.6 percent. It topped the $80,000 mark midweek. ETH added 3.8 percent. MSTR had a standout performance. The stock gained 11.1 percent on the week. It ran from a Tuesday low of 124.88 to a Thursday high of 144.82. COIN gained 3.4 percent on the week but dropped 4.2 percent during Friday''s session.
What drove it
The tape spent the week caught in a tug of war. Dovish Fed signals battled strong economic data.
Fed Governor Waller provided the primary catalyst Thursday. He stated he would support holding rates steady if data shows inflation abating. The desk watched buyers rush in. The Magnificent Seven led the Nasdaq higher.
Nvidia added fuel to the tech rally Thursday. The company announced the acquisition of Hugging Face. The AI capex narrative re-ignited instantly.
Friday reversed the tone. The August jobs report printed stronger than expected Friday morning. Rate fears came right back. The Friday tape faded as bond yields reacted to the employment numbers. The market is pricing in the reality that the Fed remains data-dependent.
What we expect next week
Next week is a four-day trading schedule. Monday, September 7 is Labor Day. US markets are closed.
Wednesday brings the consumer credit report. Thursday, September 10 delivers August PPI. The prior year-over-year read was 4.7 percent.
Friday, September 11 is the August CPI print. This is the main event for the week. The inflation data lands right on top of the current Waller-versus-jobs-report conflict.
The desk is watching the 773.17 Thursday high on SPY as upside resistance. If CPI prints hot, we expect a retest of the 761.78 Tuesday low. We are trading the levels. We hold no bias into the print.
The bottom line
The tape remains vulnerable to rate shocks. Thursday proved that buyers will step in on dovish Fed speak. Friday proved that economic data still commands the final word. Next week is entirely about the inflation data. The desk is positioned for chop ahead of Friday. We will respect the 761.78 downside trigger on SPY. Keep stops tight.
Not financial advice
This column is an inside look at desk operations and my personal market observations, not a recommendation to buy or sell any specific security. Trading carries inherent risks, and you must conduct your own due diligence or consult a licensed professional before putting capital at risk. The levels and views discussed represent desk posture at the time of publication and are subject to change without notice.
This brief was generated and published by the desk's auto-brief model from live market data, and reviewed under Guy Gentile's byline. Numbers are pulled from a single intraday snapshot and may differ from final closing prints. Not investment advice.
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