The Major Markets closed out last week with mixed results. The Dow Jones was the standout performer with slight gains in the S&P 500 and the MSCI World Index. The Nasdaq and Emerging Markets both ended slightly lower.

Some of the greatest gains were in Small Cap. Small Cap Value added over three- and three-quarter percent. Meanwhile, the growth side of the style boxes saw weakness with losses even present in the Large Cap Growth segment.

Friday, headlines shifted to the news out of Jackson Hole. In prepared remarks, Fed Chairman Jerome Powell said:

“In the near term, risks to inflation are tilted to the upside, and risks to employment to the downside—a challenging situation. When our goals are in tension like this, our framework calls for us to balance both sides of our dual mandate. Our policy rate is now 100 basis points closer to neutral than it was a year ago, and the stability of the unemployment rate and other labor market measures allows us to proceed carefully as we consider changes to our policy stance. Nonetheless, with policy in restrictive territory, the baseline outlook and the shifting balance of risks may warrant adjusting our policy stance.”

This gave further credence to a September rate cut. That said, this had largely already been priced into the market as the CME Group’s Fedwatch tool continue to however around the 85% probability range of a 25-basis point cut for most of August.
Treasuries saw the yield curve dip slightly last week. The greatest drop was in the intermediate duration which saw yield fall by 9 basis points. This had the effect of lifting Bond indices as a whole. As a result, the Bloomberg Barclays Aggregate Bond index added 0.43% for the week.