The central bank’s annual meeting starts Friday. This year’s theme will focus on the labor market. Yesterday, the Fed’s FOMC minutes showed that the main risk is still tariffs that could trigger inflation, while labor market risks are secondary. Clearly, before deciding the theme, they did not foresee Trump’s tariff-for-tariff policy. This Fed has always been chasing the market.
The four major indexes continue to diverge. The Nasdaq has pulled back for six straight sessions, with bigger swings in the past two days, led down by AI leaders. The Dow Jones 30 has been flat near record highs for four days, with small gains in the last two.
The S&P pulled back yesterday to the short-term trend line and mid-term moving average around 633, then bounced. But it did not climb back above the 638 pivot level. That 638 area is today’s intraday resistance, while 633 remains the key mid-term support test.
Most individual stocks are down premarket, but only slightly. Walmart (WMT) reported earnings below expectations, which is rare. The last time was Q1 2022. Same-store sales and Sam’s Club growth both beat market estimates. The company now expects full-year revenue growth slightly above prior guidance. Shares are down 3% premarket.
Reuters said Boeing (BA) may secure a China order of up to 500 planes. Shares are up 2%. Today’s focus remains on AI leaders that have led the recent drop. These include PLTR, MSFT, META, chip stocks AVGO and NVDA, plus TSLA and AMZN. Yesterday, they quickly rebounded after hitting mid-term moving averages. If they follow through higher today, a short-term bottom is possible. If they drop again, indexes will keep searching for support.
The Philly Fed index released premarket fell sharply month-on-month (-0.3 vs prior 15.9). Around 10 a.m., August flash PMI for services and manufacturing, plus existing home sales and leading indicators, will be released.
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