Stocks Surge Late in Volatile Week as Powell Signals September Rate Cut

Last week was a volatile one for stocks, largely in response to mixed economic data, corporate earnings reports and the anticipation of a key speech from Federal Reserve Chair Jerome Powell at the end of the week. The major benchmark indexes ebbed and flowed for much of the week until last Friday, when equities surged after Powell hinted at a likely interest rate cut in September. The S&P 500, the Russell 2000 and the Global Dow each posted weekly gains, with the Dow reaching a record high last Friday. The NASDAQ ended the week in the red, despite an end-of-week rally. Treasury yields edged higher earlier in the week, but the prospects of an interest rate cut pulled yields lower by week’s end.

July Home Sales Up Slightly; Median Prices Dip From June

Sales of existing homes rose 2.0% in July, reflecting a slight improvement in housing affordability. Existing home sales were up 0.8% from July 2024. Inventory of existing homes ticked down from a supply of 4.7 months in June to 4.6 months last month. The median existing-home price was $422,400 in July, down from $432,700 in June but 0.2% above the July 2024 estimate of $421,400. Sales of existing single-family homes also rose 2.0% in July and were up 1.1% over the last 12 months. The median existing single-family home price was $428,500 in July, lower than the June estimate of $438,600 but higher than the July 2024 figure of $427,200. Inventory of existing single-family homes in July sat at a 4.5-month supply.

Eye on the Week Ahead

This week reveals the second iteration of gross domestic product for the second quarter. The initial estimate of GDP had the economy growing at a rate of 3.0%. Also out this week is the July report on personal income and expenditures. Included in that report are the estimates of consumer spending and prices for consumer goods, the Federal Reserve’s preferred measure of inflation.