US equities ended the week mixed, with the S&P 500 rallying Friday to finish modestly higher after four straight declines. Powell’s Jackson Hole remarks, signaling potential rate cuts, boosted sentiment and fueled a rally in Treasuries, pushing yields lower. Large-cap value, energy, financials, and materials led gains, while the Nasdaq slipped on profit-taking and renewed AI spending concerns. Mid- and small-cap indexes outperformed. Economic data showed resilience: the composite PMI rose to 55.4, its fastest pace this year, with manufacturing surging to a 39-month high. However, tariffs drove the sharpest input cost increases since May, pressuring prices. Labor market data softened, as jobless claims rose to 235,000, above expectations, while continuing claims also ticked higher—adding to evidence of cooling employment conditions.
European equities advanced, with the STOXX Europe 600 up 1.40% on hopes of US rate cuts. Italy’s FTSE MIB gained 1.54%, France’s CAC 40 rose 0.58%, Germany’s DAX was flat, and the UK’s FTSE 100 hit a record high, climbing 2.00%. Eurozone business activity expanded for a third month, with the composite PMI rising to 51.1, led by the strongest manufacturing growth in over three years. Germany saw continued output gains, while France showed signs of stabilizing, though eurozone consumer confidence slipped. In the UK, inflation accelerated to 3.8% in July, with services inflation rising to 5.0%, while business activity strengthened as PMI rose to 53.0. UK house prices grew 3.7% year over year. Sweden’s Riksbank left rates at 2% but signaled possible cuts later.
