WEEK IN PERSPECTIVE: Stocks advance modestly on rate-cut bets and mega-cap gains

📈 Weekly Market Recap: Modest Gains Amid Rate Cut Optimism

U.S. equities posted modest gains this week as investors digested a blend of corporate developments, economic indicators, and growing certainty around a September rate cut. The S&P 500 edged up 0.3%, while the Nasdaq Composite led major benchmarks with a 1.1% gain, powered by strength in mega-cap tech stocks. In contrast, the Dow Jones Industrial Average slipped 0.3%, though smaller-cap indices showed broader market participation—Russell 2000 rose 1.0%, and the S&P MidCap 400 climbed 1.3%.

🏆 Record Highs On Friday morning, both the S&P 500 and Nasdaq Composite reached new all-time highs, hitting 6,532.65 and 21,878.81, respectively.

💡 Mega-Cap Momentum Mega-cap stocks continued to lead. A favorable antitrust ruling for Alphabet, allowing it to retain its Chrome browser, lifted the communication services sector by 5.1%. Tech names also benefited from upbeat earnings and dovish Fed expectations, nudging the Information Technology sector up 0.2%.

🛡️ Defensive Sectors Mixed Defensive plays saw uneven performance:

• Health Care: +0.4%

  
  

• Consumer Staples: +0.3%

  
  

• Utilities: -1.1%

⚡ Lagging Sectors

• Energy dropped 3.5%, pressured by commodity weakness.

• Financials fell 1.7%, as softer labor data raised concerns about future loan demand.

🚗 Consumer Discretionary Strength The consumer discretionary sector surged 1.6%, driven by standout gains in Amazon and Tesla.

📊 Economic Data & Fed Outlook Economic indicators reinforced expectations for monetary easing:

• August nonfarm payrolls came in at 22K (vs. 78K expected)

  
  

• Private payrolls rose 38K (vs. 90K expected)

  
  

• Wage growth remained modest

These figures pushed the probability of a September rate cut to 100%, according to the CME FedWatch Tool. Meanwhile, mixed readings from ISM services, ADP employment, and productivity added complexity to the outlook.

📉 ETF & Sector Highlights

• Vanguard Mega Cap Growth ETF: +0.8%

  
  

• SPDR S&P Retail ETF: +3.75%, boosted by strong retail earnings

• PHLX Semiconductor Index: +1.6%, outperforming despite NVIDIA volatility

🔍 Weekly Performance Summary | Index | Weekly Change | S&P MidCap 400 | +1.3% | | Nasdaq Composite | +1.1% | | Russell 2000 | +1.0% | | S&P 500 | +0.3% | | Dow Jones Industrial | -0.3% |

📌 Takeaway: This week underscored the continued dominance of mega-cap tech alongside encouraging signs of broader market participation. Investor confidence remains anchored in the Fed’s anticipated policy pivot, even as corporate and economic signals remain mixed.

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