August 22, 2025
Markets:
U.S. stock futures edged higher Friday morning as investors awaited Federal Reserve Chair Jerome Powell’s speech at Jackson Hole. Markets are hoping for clues on the path of monetary policy, with the CME FedWatch tool showing a 75% probability of a quarter-point rate cut at the September meeting.
The possibility of lower rates has recently fueled a rotation out of megacap tech and into small caps and value plays. Still, a more hawkish tone from Powell could quickly shift sentiment.
On the corporate front, Nvidia CEO Jensen Huang confirmed the company is in talks with the U.S. government about shipping a more advanced chip to China. Meanwhile, Meta Platforms awarded a $10 billion cloud contract to Alphabet’s Google.
President Trump is set to make a major announcement at noon from the White House, with speculation swirling around the Chips Act.
Portfolio:
Today is a pivotal day. Powell’s speech and President Trump’s announcement are front and center, and the market has been holding its breath. Once these events are behind us, we can reset and move forward.
Yesterday, SPY held its trendline but the hammer candle failed to confirm. The setup going into Powell’s speech is an inside day. With recent PPI data in mind, we don’t expect the Fed to clearly signal rate cuts just yet. In our view, the “pain trade” remains higher—most have doubted this rally, but the chase has not even begun.
Remember the stat we highlighted last month: near-record levels of cash are still sitting in money markets, and managers need to put that money to work. That fuel hasn’t yet entered equities, but it will—and when it does, it can push markets sharply higher.
For now, all eyes are on Powell and Trump at noon. Once those events pass, the market can digest and set up for next week. Expect lighter volumes ahead of Labor Day, but today’s moves could open the door to new opportunities that carry us into September, when volumes return and we can shift into full attack mode.
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