Powell at Jackson Hole: Mixed close, AI and retail in focus

Introduction#

U.S. equities head into Friday, August 22, 2025 with a cautious tone after a mixed, risk‑off close and a dense slate of overnight headlines ahead of Fed Chair Jerome Powell’s keynote at Jackson Hole. According to Monexa AI end‑of‑day data, the S&P 500 (^) finished at 6,370.17 (−25.61, −0.40%), the Dow Jones Industrial Average (^) closed at 44,785.50 (−152.82, −0.34%), and the Nasdaq Composite (^) ended at 21,100.31 (−72.54, −0.34%). Volatility was mixed: the CBOE Volatility Index (VIX) settled at 16.58 (−0.12%), while the Russell 2000 Volatility Index (RVX) rose to 24.03 (+2.47%), signaling relatively higher small‑cap uncertainty.

The previous session’s losers were heavyweights in Big Tech and Consumer Defensive, while select commodity‑linked cyclicals and integrated energy names held up. Overnight, the narrative stayed macro: coverage from CNBC underscored elevated expectations for a near‑term rate cut and the risk of volatility if Powell leans hawkish; Reuters flagged tighter Treasuries as Fed hawks re‑emerged; and Bloomberg highlighted the global focus on Jackson Hole as investors look for guidance on the path of policy. Company‑specific headlines were busy too, including pressure points around NVDA and China‑geared chips, retail takeaways following WMT, and evolving content‑rights dynamics in streaming.

Market Overview#

Yesterday’s Close Recap#

The tape finished lower and defensive leadership faltered. According to Monexa AI, breadth skewed negative across healthcare, utilities, and parts of industrials, while integrated oil and select materials bucked the weakness. Notably, WMT dropped after posting a mixed quarter, weighing on staples sentiment, and solar stocks slid sharply, pressuring clean‑energy laggards. In Tech, megacaps were modestly lower, with NVDA and AMD fading ahead of the August 27 earnings event for Nvidia and amid fresh headlines on China‑specific chips.

Index levels remain close to medium‑term trendlines. The S&P 500 sits above its 50‑day average (6,260.66) and roughly 1.71% below its 52‑week high (6,481.34), per Monexa AI. The Nasdaq Composite is similarly above its 50‑day average (20,686.23), but leadership is narrowing—small declines in mega‑caps are exerting outsized influence on the indices.

Under the surface, Monexa AI heatmap data captured a “cautious / slightly risk‑off” tone: weakness in healthcare (notably medtech and CROs), communications dispersion with GOOGL modestly up but META and NFLX down, and visible pressure in utilities and rate‑sensitive REITs. Conversely, integrated energy (CVX, XOM and a handful of packaging names registered strength. The mix points to idiosyncratic drivers outweighing a clean factor rotation.

Overnight Developments#

Jackson Hole dominates the macro narrative. CNBC reported that futures firmed ahead of Powell’s speech, with investors scanning for any confirmation of a September cut, while guest commentary highlighted the risk of volatility if the Fed maintains a “higher‑for‑longer” posture. Reuters noted a tightening in Treasuries as hawkish voices resurfaced into the event. Separately, global policy headlines included an overnight press report suggesting the U.S. and EU formalized a trade truce with reduced tariffs on select goods (including semiconductors and pharmaceuticals), a potential tailwind for transatlantic supply chains if sustained.

At the company level, multiple outlets highlighted fresh uncertainty around China‑focused AI chips for NVDA. Overnight press summarized reports that production related to the H20 chip was suspended amid security concerns from Beijing, while separate commentary suggested Nvidia is in dialogue with U.S. officials about potential alternative products—developments that keep China exposure and export control dynamics front‑of‑mind for semiconductors. In media, reports indicated NFLX and CMCSA advanced on chatter tied to MLB streaming rights, reinforcing the intensifying battle for live sports in the streaming ecosystem. Meanwhile, a widely circulated podcast recap flagged a six‑year, roughly $10 billion cloud deal between META and GOOGL to support Meta’s AI ambitions as it ramps data center capacity over the medium term.

Macro Analysis#

Economic Indicators to Watch#

Today’s primary macro catalyst is Powell’s Jackson Hole speech. The focus, as captured by CNBC and Reuters, is whether the Fed validates market pricing for a September cut or leans against it by underscoring persistent inflation risks and the need for additional data. Commentary on “labor market clarity” remains a secondary theme heading into upcoming employment datapoints, with several strategists warning that a hawkish tilt could raise downside volatility into month‑end. With the VIX holding at 16.58 (−0.12%) into a major event, options experts on broadcast noted implied volatility may be “a touch low” given the policy and positioning risk, setting up tactical hedging discussions.

A second macro thread is the consumer. Overnight coverage emphasized that inflation and tariffs are still pressuring U.S. households into the back‑to‑school season, with implications for staples, general merchandise, and discretionary categories. Yesterday’s post‑earnings slide in WMT despite healthy revenue growth underscores investor sensitivity to margin mix and pricing power in a more promotional environment.

Global/Geopolitical Factors#

Export controls and tech policy are front‑and‑center. Overnight summaries of reports about NVDA and China‑geared silicon, alongside ongoing U.S. policy discussions, keep the sector exposed to headline risk on both supply and demand. Any additional clarity from Washington or Beijing—particularly around the status of current and next‑gen accelerators—can alter sector multiples in a single session.

Trade policy also re‑entered the conversation. Reports pointing to a U.S.–EU trade truce with tariff reductions for semiconductors and pharmaceuticals (if implemented as described) would be supportive for broad supply chains and margin visibility in cross‑Atlantic industrials and healthcare, while also easing price pressures on end products over time. Finally, energy policy interacts with sector performance: integrated oil resilience contrasts with pronounced weakness in solar hardware suppliers, indicating that subsidy trajectories, financing costs, and utility procurement timetables remain critical variables for renewables exposure.

Sector Analysis#

Sector Performance Table#

According to Monexa AI’s sector performance snapshot at yesterday’s close:

There is a notable discrepancy between the aggregate sector snapshot and the intraday breadth reflected in Monexa AI’s heatmap commentary. The table above captures end‑of‑day, index‑level sector moves, while the heatmap analysis highlights stock‑specific leaders and laggards and, in some cases, different breadth impressions (for instance, the heatmap flagged integrated oil strength versus solar weakness even as the sector table finished lower for Energy). Our analysis prioritizes the closing snapshot for performance attribution and uses heatmap details to explain dispersion within sectors.

Technology: Leadership narrowed. Megacaps were modestly lower—NVDA −0.24%, AMD −0.90%—while stock‑specific strength appeared in select mid‑caps like HPE (+3.71%). Storage weakness (STX −2.40%) and a pullback in high‑quality enterprise software (NOW −1.49%) kept the sector heavy. Into Nvidia’s August 27 results and amid China chip headlines, compute/networking exposure remains the fulcrum for the tape.

Communication Services: The sector showed mixed leadership dynamics. GOOGL finished +0.22%, while META and NFLX ended −1.15% and −0.63%, respectively. Outside the megacaps, a small‑cap outlier (PSKY +14.66%) skewed intraday sector optics. Streaming rights chatter around MLB for NFLX and CMCSA fed the narrative that live sports remain a critical differentiator in subscriber acquisition and retention.

Financials: Breadth was uneven. Insurance and data/analytics names lagged—ALL −3.31%, FDS −2.76%—while money‑center and custody banks showed resilience (JPM −0.26%, BK +0.52%). Crypto‑linked COIN fell −1.35%, reflecting softer risk appetite.

Consumer: The picture split between cyclical and defensive. In Consumer Defensive, large retailers fell: WMT −4.49% and COST −2.50%, pressuring the sector’s close. Select packaged foods and prestige beauty outperformed, including MKC +1.70% and EL +1.33%. In Consumer Cyclical, there were idiosyncratic upside moves in packaging (PKG +6.17%, SW +4.15%) even as large discretionary names like TSLA −1.17% and AMZN −0.83% sagged.

Healthcare: Growth/tech healthcare was weak (medtech and CROs), while defensive pharma and managed care outperformed: DHR −3.55%, IQV −3.46%, offset by MRK +1.68% and UNH +1.17%. The split underscores investors’ preference for durable cash flows over higher‑beta innovation exposure into policy risk and a potentially slower macro tape.

Industrials and Real Estate: Industrials saw drawdowns in airlines and building systems (UAL −2.66%, CARR −2.74%) with green shoots in select automation and aerospace (NDSN +3.00%, GE +0.85%). Real Estate stayed rate‑sensitive, with logistics/data center REITs weaker (PLD −1.62%, DLR −0.94%) and healthcare REIT WELL +0.57% outperforming on defensiveness. Towers were mixed (AMT +0.11%, SBAC −1.26%).

Energy and Materials: The sector close was lower on Monexa AI’s table, but internals were bifurcated. Integrated oil and services climbed—CVX +1.52%, XOM +0.64%, SLB +1.35%—even as solar underperformed (FSLR −6.99%, ENPH −3.08%) and chemicals were mixed (DOW −1.64%, LIN −0.34%). In Materials, miners firmed (NEM +1.58%, FCX +0.99%), consistent with selective commodity support.

Utilities: The sector slid as rate sensitivity and company‑specific headlines weighed. Notable decliners included PCG −4.49% and EIX −3.84%, with broad selling across regulated utilities (PEG −2.20%, SRE −1.54%) even as NEE held near flat (−0.13%).

Company‑Specific Insights#

Earnings and Key Movers#

Retail and staples: According to Monexa AI’s summary of company reports, WMT delivered a mixed Q2: adjusted EPS of $0.68 missed the $0.74 consensus, while revenue of $177.4 billion beat the $174.4 billion estimate (+4.8% YoY). Despite raising full‑year guidance, shares fell −4.49% as investors focused on margin mix and the implications of a still‑pressured consumer. In warehouse clubs, BJ was set to report this morning; early commentary indicated softer sales versus expectations even as the profit outlook improved, and shares traded lower into the print (Monexa AI company news). The setup highlights investors’ sensitivity to top‑line quality and membership trends into the back‑to‑school season.

Beauty: COTY plunged −21.60% after a surprise quarterly loss and a weak first‑half FY26 outlook (Monexa AI/FMP). The company cited cautious retailer orders, tariffs, and a more promotional market. The move reinforces the message that pricing power and inventory discipline are critical in discretionary personal care as consumer budgets tighten.

Semiconductors and AI infrastructure: UBS raised its price target on NVDA to $205 while reiterating Buy, citing robust data center demand trends into the August 27 report (Monexa AI/FMP). However, overnight headlines about China‑focused chips keep the geopolitical overhang front‑and‑center; reports pointed to a suspension of H20‑related production following Beijing’s security concerns, while separate commentary suggested Nvidia is in dialogue with U.S. officials about a new product alternative. With AMD down −0.90% and investor attention concentrated on networking and compute supply, guidance on Blackwell timing, gross margin durability, and China exposure will likely dictate near‑term multiples for the broader semi complex.

Online grocery and platforms: Wedbush downgraded CART to Underperform and cut its target to $42 from $55, citing intensifying competition from AMZN as it expands same‑day perishable delivery. CART fell −2.18%, while AMZN slipped −0.83% alongside broader mega‑cap softness. The call illustrates the challenge for standalone platforms facing integrated ecosystems with logistics and subscription flywheels.

Software and cloud: Truist lifted its target on VEEV to $268 while maintaining Hold ahead of its August 27 print, noting solid end‑market commentary from peers (Monexa AI/FMP). Meanwhile, a widely shared podcast recap flagged a sizable six‑year cloud deal between META and GOOGL to support AI build‑outs, underscoring the persistent capex intensity in hyperscale AI.

Solar and renewables: CSIQ missed on EPS (−$0.08 vs +$0.76 est.) and revenue (~$1.69B vs $1.90B est.), with leverage metrics highlighting risk. The print dovetailed with pronounced declines in U.S. solar leaders (FSLR −6.99%, ENPH −3.08%). Financing costs, policy visibility, and utility procurement cadence remain key watch‑items for the group.

Media and streaming: Reports that NFLX and CMCSA saw gains tied to potential MLB streaming rights highlight a persistent pivot toward live sports as a subscriber‑acquisition lever. For NFLX, where shares closed −0.63%, live rights are a lever to extend the ad‑tier opportunity, while for CMCSA (+0.93%) it reinforces the dual‑track strategy across broadband and content.

Extended Analysis#

The market’s leadership has consolidated into a few key narratives—AI infrastructure capex, the path of the Fed, and the staying power of the U.S. consumer. Yesterday’s close encapsulated this: modest declines in mega‑cap tech nudged indices lower, staples cracked on margin anxieties, and small‑cap volatility rose even as the headline VIX stayed subdued. Into today’s session, three dynamics deserve emphasis.

First, policy sensitivity is high and asymmetric. According to Monexa AI’s volatility prints, the VIX at 16.58 is low relative to a potentially market‑moving Fed communication, while the RVX at 24.03 (+2.47%) hints at a more precarious small‑cap setup. Commentary on CNBC stressed that implieds may not fully reflect event risk; if Powell declines to validate September‑cut hopes, rate‑sensitives (utilities, REITs) and long‑duration growth could wobble. Conversely, a market‑friendly tone would likely recalibrate rate‑cut odds and lift duration plays—though stretched areas of AI and high‑multiple software could still see “sell‑the‑news” reactions if positioning is heavy.

Second, AI remains the market’s growth fulcrum, but dispersion is growing. According to Monexa AI, NVDA finished −0.24% and AMD −0.90%, small moves that nevertheless weighed on sector optics. Analyst work (Monexa AI/FMP) pointing to robust data center growth supports the bull case, but China policy headlines inject uncertainty into forward mix and margin trajectory. Investors should track: 1) Blackwell shipment cadence and networking supply; 2) data center share of revenue and gross margin directionality; and 3) management’s commentary on demand sustainability (both training and inference). These are the variables most likely to reset multiples across semiconductors and hardware‑adjacent equities in the coming week.

Third, the consumer is diverging by category. WMT’s revenue beat but EPS miss—followed by a −4.49% selloff—reinforces that mix matters as much as traffic. In a tariff‑ and inflation‑laden backdrop, value formats and private‑label may win share, but profitability hinges on inventory, promotions, and ad monetization (retail media). Monexa AI’s sector tables show Consumer Defensive down −1.75% at the close; yet, within the group, select brands (MKC, EL managed gains. Stock‑picking, not blanket factor bets, is setting outcomes.

For Energy and Materials, the message is bifurcation. Integrated oil and services’ resilience (CVX, XOM, SLB contrasts with solar’s drawdown and weakness in chemicals (DOW. Renewables face the triple headwind of financing costs, policy timing, and utility procurement. In Materials, miners (NEM, FCX benefited from selective commodity support, and could remain a relative safety valve if global growth expectations hold.

Lastly, rate‑sensitive areas (utilities, REITs) bear watching. Utilities saw broad selling—PCG −4.49%, EIX −3.84%, PEG −2.20%—consistent with rising event risk and higher real‑rate sensitivity. In REITs, logistics/data centers (PLD, DLR slipped, while healthcare REIT WELL outperformed, reflecting the market’s preference for defensive cash flows with visible growth paths.

Conclusion#

Morning Recap and Outlook#

Into the open, the market is balancing macro event risk with stock‑specific catalysts. According to Monexa AI, the indices closed modestly lower with mixed volatility signals—VIX subdued at 16.58 (−0.12%), RVX elevated at 24.03 (+2.47%). Overnight coverage from CNBC, Reuters, and Bloomberg focused squarely on Jackson Hole, where Powell’s tone could recalibrate rate‑cut odds and sector leadership within a single session. Meanwhile, the AI complex remains the fulcrum: NVDA’s August 27 report and evolving China headlines will set the tone for semis, while streaming and cloud dealflow continues to shape media and hyperscale capex narratives.

Actionably, investors should 1) respect dispersion and focus on company‑level catalysts; 2) hedge selectively given a low VIX versus event risk and an elevated RVX; 3) watch rate‑sensitive groups (utilities, REITs) and margin‑sensitive staples for Powell‑driven moves; and 4) track AI bellwethers for guidance on demand, margins, and China exposure. Within defensives, emphasis on earnings‑quality names (MRK, UNH, WELL continues to make sense into the speech. In cyclicals, sustain the distinction between hydrocarbons and renewables until financing conditions ease.

In short, today’s session likely hinges on Powell’s communication and the market’s interpretation of the policy path. With leadership concentrated and breadth uneven, price discovery will continue to be stock‑specific. Stay nimble, let the closing data guide your priors, and be prepared to pivot as the macro signal arrives.