The Major Markets closed mostly higher last week. That said, last week’s returns in the Russell 2000 gave away the story that there was more taking place beyond the headlines.

The style boxes reveal that last week’s gains were effectively limited to large cap companies as Small and Mid-Cap names saw a pullback.

Information Technology was the dominate sector last week followed by gains in Communication Services and Financials. Yet again, there was still more news below the simple headline. Last week saw the last earnings release among the Magnificent 7 names when Nvidia posted a record revenue of $96.2 billion dollars in Q2.

The company’s share price popped higher on the news before settling lower Friday. Simultaneously, the Semiconductor Index fell by 2.3% for the week, highlighting the tension that is still playing out in the AI space.

Finally, on Friday Fed Chair Kevin Warsh, left no ambiguity of the primary inflation measure that the FOMC is watching, nor its mission when he said:

“Third, there should be no misunderstanding: The Fed’s price-stability objective of 2 percent, as measured by the personal consumption expenditures (PCE) price index, is a firm, fixed target. Let’s be equally clear about another aspect of the objective: Price stability is not self-executing, nor is inflation necessarily mean-reverting. It is the Fed’s job to deliver stable prices.”

This hawkishness around inflation concerns were enough to cause market participants to anticipant a better-than-not rate hike odds of 25 basis points for the upcoming September FOMC Meeting.