The S&P 500 index rose 0.4% last week after cooling inflation and an unexpected drop in retail sales boosted the odds for a sixth straight monetary policy pause in September.
The index ended the week up 3.8% quarter-to-date and 14% for the year.
The probability of the Federal Reserve extending its policy pause next month jumped after July’s consumer and wholesale price inflation rates, both headline and core, declined and retail sales for the month unexpectedly slumped the most since May 2025. The week ended with a 67% chance that the Fed will leave interest rates unchanged, up from 56% the week prior, according to the CME FedWatch tool.
Treasury Secretary Scott Bessent said on CNN that the US plans to announce measures on Iran next week that have “never been seen.”
Defense Secretary Pete Hegseth said the US can sustain its blockade against Iran “indefinitely,” Al Jazeera reported.
The energy sector in the S&P 500 had the largest percentage gain of the week, up 7.3%, followed by a 1.5% advance in utilities and 1% increases for both consumer staples and health care. Financials, industrials, real estate and tech also rose week to week.
Three S&P 500 sectors that declined were consumer discretionary, communication services and materials, down 2%, 1% and 0.9%, respectively.
This week, companies reporting Q2 earnings include Home Depot (HD), Analog Devices (ADI), TJX Companies (TJX), Lowe’s Companies (LOW), Target (TGT) and Walmart (WMT), among others.
Economic data includes the July minutes of the Federal Open Market Committee meeting, S&P Global manufacturing and services purchasing managers’ indexes, industrial production, building permits and housing starts.
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