August 29, 2025, Weekly Stock Market Return Recap, by Kip Lytel CFA, Montecito Capital Management. The S&P 500 has marked its fourth consecutive month of gains, closing above the 6,500 mark for the first time on Thursday. The Dow rose by more than 3% in August, while the S&P 500 increased nearly 2% for the month. The Nasdaq, which is heavily focused on technology, advanced by 1.6% in August. Traders estimate that there is roughly an 87% chance the central bank will cut its benchmark interest rate by a quarter percentage point next month, according to CME Group data. Additionally, Factset reports that over 80% of S&P 500 companies have exceeded EPS estimates for Q3 thus far, which is above the five-year average of 72%. The forward 12-month P/E ratio for the S&P 500 is 16.6, which is lower than both the five-year average of 18.6 and the ten-year average of 16.9. The US government stated that GDP increased by 3.3% in the second quarter, a surprising rise from its initial estimate and a broad recovery from the 0.5% decline in Q1. The Commerce Department reported that prices rose by 2.6% in July compared to the same month last year. While inflation is considerably lower than the approximately 7% peak it reached three years ago, it remains significantly above the Federal Reserve’s 2% target.

August 22, 2025, Weekly Stock Market Return Recap, by Kip Lytel CFA, Montecito Capital Management. For the week, the Dow experienced a gain of 1.5%, and the S&P 500 advanced by 0.3%, while the Nasdaq saw a decrease of 0.6%. In his speech at Jackson Hole, Fed Chair Powell indicated the possibility of a rate cut in September, stating, “With policy in restrictive territory, the baseline outlook and the shifting balance of risks may warrant adjusting our policy stance.” On the topic of the labor market, Powell observed that the recent slowdown in hiring, combined with a deceleration in labor force growth, creates “a curious kind of balance that results from a marked slowing in both the supply of and demand for workers.” He remarked, “This unusual situation suggests that downside risks to employment are rising.” Powell cautioned that if these risks materialize, they could do so rapidly, resulting in sharply higher layoffs and an increase in unemployment. The July jobs report indicated that the US economy added 73,000 jobs last month, while revisions to the job gains in May and June eliminated approximately 250,000 job additions from the initial reports. Over the past three months, job gains have averaged a mere 35,000.

August 15, 2025, Weekly Stock Market Return Recap, by Kip Lytel CFA, Montecito Capital Management. Stocks showed gains on mixed economic news for the week: The S&P 500 was up by +0.9%, the Nasdaq increased by +0.8%, and the Dow rose by +1.7%. Retail sales climbed 0.5% in July, falling short of forecasts but marking the second consecutive monthly gain following a decline in spring. The number of Americans filing new applications for jobless benefits decreased last week amid low layoffs, with initial claims for state unemployment benefits falling by 3,000 to a seasonally adjusted total of 224,000 for the week ending August 9, as reported by the Labor Department on Thursday. Economists surveyed by Reuters had predicted 228,000 claims for the latest week. The Consumer Price Index (CPI) for July increased by 0.2%, matching consensus estimates and accelerating from June’s 0.1% gain, according to data from the Bureau of Labor Statistics. Although the core consumer price index (CPI) rose by 0.32% month-over-month, raising the year-over-year rate to 3.1%, tariffs are not the cause of inflation. Shelter accounted for approximately 32% of the monthly increase, followed by a three-year high in medical care services (driven by dental services) and a rise in transportation services (led by airfares); these three categories together made up over 70% of July’s core CPI increase. The largest tariff-related contributor—household furnishings and supplies—accounted for less than 10%. The Producer Price Index (PPI) for July indicated that inflation for businesses rose by 0.9% over the previous month, significantly ahead of the 0.2% increase that was forecast, according to data from the Bureau of Labor Statistics released on Thursday. On an annual basis, prices rose by 3.3%, the highest since February. Goldman Sachs warned that the ‘Goldilocks’ stock market may be impacted as the bank cautioned that “this calm could quickly turn into a storm if growth slows or the Fed tightens monetary policy.”

August 8, 2025, Weekly Stock Market Return Recap, by Kip Lytel CFA, Montecito Capital Management. All major indexes experienced gains over the week, recovering from their most challenging week in several months, as investor apprehensions about tariffs and the state of the economy have eased. The Dow rose by 1.3% for the week, the S&P 500 increased by 2.4%, and the tech-heavy Nasdaq surged by 3.9%.  As the second quarter (Q2) earnings reached their peak weekly season, the S&P 500 is reporting impressive results. The percentage of S&P 500 companies that have reported positive earnings surprises, as well as the extent of these surprises, is above their 10-year averages. On a year-over-year basis, the S&P 500 is showing double-digit earnings growth for the third consecutive quarter, with companies reporting earnings that are 8.4% higher than estimates in total. Furthermore, the blended revenue growth rate for the second quarter so far is 6.3%, and 81% of S&P 500 companies have reported actual revenues exceeding estimates, surpassing the 5-year average of 70%. However, the U.S. economy grew at an average annual rate of merely 1.3% in the first half of 2025, compared to 3% in 2024.

August 1, 2025, Weekly Stock Market Return Recap, by Kip Lytel CFA, Montecito Capital Management. All key US indices ended the week lower amid concerns over tariffs, job growth, nuclear submarines, and the firing of the BLS chief responsible for employment data. For the trading week: S&P index -2.36%, Dow industrial average -2.92%, and Nasdaq index -2.17%. In July, the U.S. economy added a mere 73,000 jobs, significantly below the consensus estimate of 110,000. The unemployment rate rose to 4.2%, compared to 4.1% previously, suggesting a potential weakening in labor market conditions. Moreover, the Fed’s favored inflation metric, the core Personal Consumption Expenditures (PCE) Price Index, indicated that core inflation in the U.S. increased by 0.26% over June, largely driven by a notable rise in goods prices. The markets were also shaken by reports that the U.S. was deploying nuclear submarines in “appropriate regions” in response to provocative comments from former Russian President Medvedev.