S&P 500 ended last week +0.94% higher at 6,449.80 US yields trade higher: 10-year +3.5 bps last week to 4.321%Gold lower last week -1.87% to $3,334.98 an ounceDXY -0.43% last week to 97.84What to look out for today
Companies reporting on Monday, 18th August: Palo Alto Networks. Blink Charging
Key data to move markets today
EU: German Bundesbank Monthly Report.
US Stock Indices
Dow Jones Industrial Average +0.08 %.
Nasdaq 100 -0.50%.
S&P 500 -0.29%, with 7 of the 11 sectors of the S&P 500 down.
The Dow Jones Industrial Average reached a new intraday high on Friday but did not close at a new record for 2025.
On Thursday, an after-hours filing revealed that Berkshire Hathaway had added UnitedHealth to its portfolio, acquiring a position valued at approximately $1.6 billion last quarter. As a result, UnitedHealth shares jumped 11.98% Friday, despite remaining -39.90% YTD. Since UnitedHealth is a major component of the Dow Jones Industrial Average, the index traded in positive territory for most of the day, having advanced as much as 0.50%, but ultimately rising only +0.08% on Friday. It closed at 44,946, falling 68 points short of its record close from 4th December. In contrast, both the S&P 500 and the Nasdaq ended the day lower at -0.29% and -0.50%, respectively. For the week, the S&P 500 closed +0.94% higher at 6,449.80, the Nasdaq 100 traded +0.43% higher and the Dow Jones Average +1.74%.
Looking ahead, investors will be focussed on several key events this week. Retail will be in focus as Home Depot’s corporate earnings are expected on Tuesday, Target on Wednesday, and Walmart is set to publish its Q2 earnings report on Thursday. The FOMC minutes are due for release on Wednesday while the flash PMIs and initial jobless claims are due on Thursday. The Kansas City Fed's annual economic symposium in Jackson Hole is also scheduled to begin, bringing together Fed officials, academic economists, and central bankers from around the world. Fed Chair Jerome Powell is expected to speak at the symposium on Friday, 22 August at 10 am ET.
According to LSEG I/B/E/S data, y/o/y earnings growth for the S&P 500 in Q2 is projected to be +12.9%. This number jumps to 14.8% when excluding the Energy sector. Of the 459 companies in the S&P 500 that have reported earnings to date for Q2 2025, 80.2% have reported earnings above analyst estimates, with 78.9% of companies reporting revenues exceeding analyst expectations. The y/o/y revenue growth is projected to be 6.3% in Q2, increasing to 7.4% when excluding the Energy sector.
Information Technology, at 94.3%, is the sector with most companies reporting above estimates, while Consumer Discretionary, with a surprise factor of 12.9%, is the sector that’s beaten earnings expectations by the highest surprise factor. Within Materials, 46.2% of companies have reported above estimates, and Real Estate at -0.6% is the sector with the lowest surprise factor. The S&P 500 surprise factor is 8.4%. The forward four-quarter price-to-earnings ratio (P/E) for the S&P 500 sits at 22.9x.
In corporate news, Daniel O’Day, according to Bloomberg news, Gilead Sciences’ CEO, stated that the company's new HIV prevention drug, Yeztugo, is expected to receive favourable insurance coverage. This statement comes amidst uncertainty over how the US administration will handle recommendations for such treatments.
Swiss chocolatier Lindt & Spruengli is considering moving the production of its iconic gold-wrapped Easter bunnies to the US to avoid import tariffs.
Danish jewelry company Pandora is weighing potential price increases in the US and other markets in response to higher tariffs, according to its CEO.
S&P 500 Best performing sector
Health Care +1.65%, with UnitedHealth Group +11.98 %, Centene +5.97 %, and Moderna +4.98 %.
S&P 500 Worst performing sector
Financials -1.12%, with Wells Fargo -2.91%, Morgan Stanley -2.61%, and KKR & Co -2.59%.
Mega Caps
Alphabet +0.53 %, Amazon +0.02 %, Apple -0.51%, Meta Platforms +0.40 %, Microsoft -0.44%, Nvidia -0.86%, and Tesla -1.50%.
Information Technology
Best performer: First Solar +11.05 %.
Worst performer: Applied Materials -14.07%.
Materials and Mining
Best performer: Newmont +1.24 %
Worst performer: International Paper -2.43%.
European Stock Indicest
CAC 40 +0.67 %.
DAX -0.07%.
FTSE 100 -0.42%.
Commodities
Gold spot -0.05% to $3,334.98 an ounce.
Silver spot +0.22% to $37.99 an ounce.
West Texas Intermediate -1.24% to $63.14 a barrel.
Brent crude -1.05% to $66.14 a barrel.
Gold prices remained relatively stable Friday, but posted a weekly decline. Market attention turned to the discussions between US President Donald Trump and his Russian counterpart, Vladimir Putin after Friday’s session.
Spot gold was -0.05% to $3,334.98 per ounce and was -1.87% for the week.
Oil prices ended the week down over 70 cents on Friday as traders anticipated discussions between US President Donald Trump and Russian President Vladimir Putin. These talks were seen as a potential opportunity to ease sanctions against Moscow, which were imposed in response to the conflict in Ukraine.
Brent crude futures settled at $66.14 a barrel, a decrease of 70 cents or -1.05%. WTI crude futures also fell by 79 cents, or -1.24%, to $63.14. For the week, WTI was -0.33%, while Brent saw a marginal increase of +0.03%.
Concerns about future fuel demand were exacerbated by economic data from China. Government figures revealed that the growth of factory output had fallen to an eight-month low, and retail sales growth had slowed to its lowest rate since December. Although China's crude throughput, which is a measure of the amount of crude oil processed by refineries, increased by 8.9% y/o/y in July, it was still down from the higher levels recorded in June.
This increase in refinery throughput did not fully alleviate concerns, as China's oil product exports also rose compared to the previous year, suggesting a decrease in domestic fuel demand.
Sentiment was also negatively affected by forecasts of a growing oil market surplus and the prospect of a sustained period of higher US interest rates. Additionally, data from energy technology company Baker Hughes indicated that the number of oil rigs, a key indicator of future supply, increased by one to 412 this week.
Note: As of 5 pm EDT 15 August 2025
Currencies
EUR +0.55% to $1.1713.
GBP +0.21% to $1.3555.
Bitcoin -0.48% to $117,403.86.
Ethereum -1.12% to $4,431.93.
The dollar weakened on Friday as expectations for a September Fed rate cut remained intact.
The dollar had jumped Thursday after data showed US producer prices rose more than expected in July. However, it surrendered most of those gains by Friday, ending the week down -0.43%.
Chicago Fed President Austan Goolsbee expressed ‘unease’ on Friday regarding recent reports of an increase in services inflation, citing what he considers a stagflationary impact from tariffs on the economy.
Investors were also closely monitoring the Alaska summit for any potential progress toward a ceasefire in Ukraine. Most analysts anticipated that Europe's single currency, the euro, would benefit from such a deal. The euro was up +0.55% against the US dollar at $1.1713 and finished the week +0.62% higher.
The dollar found little support from the increase in US retail sales in July, driven by strong demand for motor vehicles and promotional activities from retailers like Amazon and Walmart.
Looking ahead, markets are now awaiting the upcoming Fed’ Jackson Hole symposium for further clues on future monetary policy.
The British pound rose against the weakening dollar on Friday, ending the week higher following positive economic data and a hawkish rate cut by the BoE. The pound gained +0.21% on Friday to reach $1.3555. It was +0.89% for the week.
The dollar fell against the Japanese yen on Friday, -0.39% to ¥147.18. This was prompted by surprisingly strong Japanese growth data, which indicated that export volumes had held up well despite new US tariffs. For the week, the yen strengthened +0.37% against the dollar. The yen also found support from remarks by US Treasury Secretary Scott Bessent, who suggested that the BoJ could be ‘behind the curve’ in its approach to inflation.
Fixed Income
US 10-year Treasury +3.1 basis points to 4.321%.
German 10-year bund +7.4 basis points to 2.789%.
UK 10-year gilt +5.3 basis points to 4.700%.
US Treasury yields rose Friday, with the 10-year yield reaching a two-week high. This was driven by traders reducing their expectations for a 50 bps interest rate cut by the Fed next month due to Thursday's higher-than-expected producer price inflation data.
Investors will now be focussed on the Fed's annual economic policy symposium in Jackson Hole, Wyoming this week, to see if Fed Chair Jerome Powell pushes back against the market's current rate-cut pricing.
The yield on the 2-year note, which often moves with Fed interest rate expectations, rose by +2.0 bps to 3.761% on Friday, but finished the week -0.8 bps lower. The yield on 10-year notes climbed +3.1 bps to 4.321%, ending the week +3.5 bps higher. On the long end of the curve, the 30-year yield increased by +4.7 bps to 4.920%, ending the week up +6.3 bps.
The Treasury Department is due to sell $16 billion in 20-year bonds this week, alongside $8 billion in 30-year Treasury Inflation-Protected Securities (TIPS).
Fed funds futures traders are now pricing in a 84.6% probability of a rate cut in September, down from 88.9% last week, according to CME Group's FedWatch Tool. Traders are currently anticipating 55.2 bps of cuts by year-end, lower than the 58.8 bps expected last week.
Across the Atlantic, eurozone bond yields rose on Friday as markets continued to process Thursday's US inflation data while also anticipating the Alaska summit between the US President Donald Trump and Russian President Vladimir Putin.
Germany’s 10-year yields increased +7.4 bps to 2.789%, and 2-year yields, which are particularly sensitive to rate changes, were up +2.5 bps to 1.981%. For the week, Germany's 10-year yield rose by +9.9 bps, while its 2-year yield ended +1.5 bps higher. Germany's 30-year yields climbed by +8.3 bps, concluding the week +14.3 bps higher at 3.349%.
Italy's 10-year bond yield, a benchmark for the eurozone periphery, rose +9.5 bps to 3.580%. This caused the spread between Italian and German 10-year yields to narrow to 79.1 bps, which is the tightest it has been since at least 2011, and 0.1 bps lower than the previous week. For the week, the Italian 10-year yield rose +9.8 bps.
Note: As of 5 pm EDT 15 August 2025
Global Macro Updates
July retail sales in line with consensus. In July, US retail sales experienced a modest increase, with the headline figure rising 0.5% m/o/m, in line with expectations. This follows a revised 0.9% increase in June. Excluding auto sales, retail sales also met consensus, growing by 0.3% m/o/m, with the June figure revised to a 0.8% increase. The ‘control group’ of sales, which directly influences GDP calculations, saw a 0.5% increase, slightly surpassing the 0.4% consensus forecast but trailing June's 0.8% gain.
Growth was noted across several sectors. There was a 1.6% rise in motor vehicles and parts dealers, a 1.4% increase for furniture and home furnishings stores, and a 0.8% gain in both sporting goods and non-store retailers, which includes online sales. Gasoline stations, clothing stores, and food and beverage stores also saw increases of 0.7%, 0.7%, and 0.5%, respectively. Additionally, health and personal care stores and general merchandise stores both saw a 0.4% rise.
However, sales declined in several categories. The most significant drop was a 1.7% decrease in miscellaneous store retailers, followed by building material and garden equipment stores, which fell by 1.0%. Electronics and appliance stores saw a 0.6% decline, while food services and drinking places experienced a 0.4% drop.
The US Export Price Index rose by 0.1% m/o/m, exceeding the flat consensus forecast and following a 0.5% increase in June. The Import Price Index saw a 0.4% increase, which was higher than the expected 0.1% rise and reversed the 0.1% decline observed in June.
Consumer sentiment below consensus, amid concerns over inflationary pressures and labour market weakening. Preliminary consumer sentiment for August, as measured by the University of Michigan, came in at 58.6, falling short of the consensus forecast of 62.2 and marking a decline from July's final reading of 61.7. This decrease was primarily driven by consumer concerns that both inflation and the labour market will deteriorate.
The report also revealed an uptick in inflation expectations. Preliminary one-year inflation expectations for August rose to 4.9%, from a final reading of 4.5% in July. Similarly, five-year inflation expectations climbed to 3.9% from 3.4% in July. This rise in expectations follows this week’s release of mixed July CPI data and a strong July PPI report.
The decline in overall sentiment was reflected in the sub-indices. The Current Economic Conditions index fell to 60.9 from 68.0 in July, while the Index of Consumer Expectations slightly decreased to 57.2 from 57.7. In contrast, expectations for personal finances saw a minor increase.
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