Late August is an awkward season for Wall Street. The heat has not quite broken, trading desks are half-empty, and the Stock Trader's Almanac whispers that markets, like schoolchildren, tend to stumble at summer's end. This week, the ritual played out: technology stocks, having levitated since spring, suddenly sagged. Nvidia, AMD, Palantir, Meta—the mascots of the artificial intelligence boom—gave back gains in a spasm of doubt. Some called it a correction, others a reckoning, but the mood was unmistakable: euphoria had tipped into suspicion.

Washington's watchful eye has only sharpened that suspicion. The AI gold rush, turbocharged by promises of trillion-dollar revolutions, has been tempered by congressional hearings and regulatory murmurs. Investors, once giddy, now face the possibility that the future may be not only overhyped but overregulated. What was supposed to be a frictionless path to endless growth suddenly looks like a corridor lined with bureaucrats. Even revolutions, it turns out, can be overbought.

The selloff, of course, has multiple explanations, depending on which analyst you consult. Some point to valuation excesses, others to seasonal weakness. August, they remind us, is historically unkind to equities. Still others detect a more primal impulse: investors, spooked by their own success, retreating before the mirror cracks. It may simply be exhaustion—markets, like people, cannot sustain perpetual optimism without inviting collapse.

Against this backdrop, the futures markets slipped lower on Thursday morning, with Dow futures down 0.4%, the S&P off by 0.3%, the Nasdaq by 0.4%. What traders await, above all, is clarity from the one institution that can still shift the narrative with a phrase: the Federal Reserve. In Jackson Hole, Wyoming, the Fed's annual symposium begins, a conference as much performance as policy. The setting—mountains, pines, an almost pastoral serenity—belies the intensity of what takes place there. Every August, central bankers gather to confer, but what the world hears are not conversations but oracles. Jerome Powell, speaking Friday morning, will be parsed with a fervor usually reserved for theologians. Will he hint at a September rate cut, now deemed less certain after a spate of weak job market data? Or will he keep the suspense alive, reminding markets that the neutral rate—the elusive Goldilocks zone where the economy is neither overheated nor chilled—remains more aspiration than fact?

The minutes from the Fed's July meeting, released Wednesday, offered only cautious language: policymakers believe current rates hover just above neutral. Traders, once almost unanimous in betting on a September cut, have scaled back their conviction. A week ago, the odds stood at near certainty; now they hover around 79%, according to LSEG data. 

This week is also marked by a wave of retail earnings. Walmart raised its sales and profit outlook, buoyed by shoppers who have come to rely on its low prices. Yet its shares fell anyway—punished, perhaps, for doing too well in a market that treats resilience as a sign of fragility. Target and The Home Depot, by contrast, painted a more mixed picture earlier in the week, cautioning that tariffs and higher costs could weigh on holiday spending. Together, the reports sketch a consumer who is still spending, but warily, steering toward bargains and away from indulgence.

Elsewhere, the crosscurrents were equally sharp. Boeing rose on rumors of a megadeal with China, while Coty, the beauty-products maker, plunged 20% on weak U.S. demand—proof that lipstick economics does not always offer comfort. Each subplot contributes to the same uneasy conclusion: a market suspended between optimism and dread, desperate for reassurance but unwilling to believe in it.

In other news, the US president has called for the resignation of Federal Reserve Governor Lisa Cook amid allegations of mortgage fraud. She replied that she will not be intimidated. There is no new information on the alleged preparations for a meeting between Zelensky and Putin with a view to a ceasefire in Ukraine. However, US Vice President JD Vance has stated that Russia wants to recover territories currently under Ukrainian control, confirming rumors that have been circulating for some time.

On the macro side, weekly jobless claims ticked up to 235,000 for the week ending August 16, overshooting estimates of 225,000 and signaling a labor market that may be cooling at the edges.

On the Asia-Pacific markets, a slight easing in the technology sector allowed South Korea (+0.5%) and Taiwan (+1.5%) to recover. The mood remains gloomy in Japan (-0.7%) and Hong Kong (-0.2%), but is improving in India (+0.3%). Special mention goes to the Australian ASX, which gained nearly 1%, boosted by a surge in Brambles (+12%) after quarterly results that revived the industrial sector. European leading indicators are bearish.

Today's economic highlights:

On today's agenda: Japan's PMIs; France, Germany, Eurozone, and United Kingdom PMIs; in the United States, new jobless claims, Philadelphia Fed business outlook, PMIs, existing home sales, and the leading index. See the full calendar here.

  • Dollar index: 98,372
  • Gold: $3,332
  • Crude Oil (BRENT): $67.20 (WTI) $63.08
  • United States 10 years: 4.3%
  • BITCOIN: $113,160

In corporate news:

  • Walmart raised its annual sales and profit forecasts as low prices attracted shoppers amid rising costs, though its shares fell due to cautious consumer spending and concerns over tariffs.
  • Dayforce will be acquired by Thoma Bravo in a $12.3 billion deal, taking the HR software provider private in a move to strengthen the buyout firm's software portfolio.
  • Boeing is reportedly in talks to sell up to 500 jets to China, which would mark a major breakthrough in the Chinese market after years of trade tension.
  • Vattenfall shortlisted Rolls-Royce SMR and GE Vernova to build small modular nuclear reactors in Sweden, marking the country's first nuclear expansion in four decades.
  • Johnson & Johnson announced a $2 billion investment in North Carolina to expand U.S. manufacturing ahead of possible drug tariffs under Trump's trade policies.
  • McCormick & Company will acquire a controlling 75% stake in McCormick de Mexico for $750 million, strengthening its flavor market position in Mexico.
  • Full Truck Alliance reported a 17.2% rise in Q2 revenue and a 50.5% increase in net income, driven by higher order volume and operational efficiency.
  • Bilibili swung to a profit in Q2 with a 20% revenue increase, boosted by strong mobile game and advertising growth.
  • Masimo sued U.S. Customs over its decision to allow Apple to import smartwatches with disputed blood-oxygen technology during ongoing patent litigation.
  • ServiceNow and SENAI-SP launched an AI skills training program across São Paulo to prepare Brazil's workforce for digital transformation.
  • Meta Platforms paused AI hiring due to overstaffing, restructuring its AI group, and received regulatory approval for infrastructure investments in Louisiana.
  • Citigroup appointed a new head of corporate banking real estate and investigates HR complaints against wealth head Sieg.
  • Tesla CEO Elon Musk faces a lawsuit over an alleged illegal lottery and announced the six-seat Model Y may not launch in the US.
  • Pulsar Helium Inc. is raising up to GBP 5 million for its Topaz helium project.

Analyst Recommendations:

  • Analog Devices, Inc.: KGI Securities Co Ltd downgrades to outperform from buy and raises the target price from USD 220 to USD 258.
  • Bio-Techne Corporation: Citi upgrades to buy from neutral and raises the target price from USD 55 to USD 70.
  • Coreweave, Inc.: Arete Research upgrades to buy from neutral with a price target raised from USD 158 to USD 180.
  • Coty Inc.: Citi downgrades to neutral from buy and reduces the target price from USD 6.50 to USD 4.25.
  • Extra Space Storage Inc.: Goldman Sachs downgrades to neutral from buy and reduces the target price from USD 169 to USD 146.
  • Icon Public Limited Company: Citi downgrades to neutral from buy and reduces the target price from USD 225 to USD 200.
  • Kilroy Realty Corporation: Goldman Sachs downgrades to sell from neutral with a target price of USD 33.
  • Marvell Technology Group Ltd: KGI Securities Co Ltd downgrades to neutral from outperform and reduces the target price from USD 95 to USD 75.
  • Snap Inc.: Baptista Research upgrades to buy from hold with a target price of USD 8.90.
  • Truist Financial Corporation: Wells Fargo downgrades to market weight from overweight with a target price of USD 47.
  • Westlake Corporation: Baptista Research downgrades to hold from buy and reduces the target price from USD 94.50 to USD 91.10.
  • Amd (Advanced Micro Devices): Guotai Haitong Securities maintains its overweight recommendation and raises the target price from USD 162 to USD 199.
  • Circle Internet Group, Inc.: President Capital Management Corp maintains its buy recommendation and reduces the target price from USD 358.20 to USD 229.
  • Estee Lauder: B Riley Securities Inc. maintains its neutral recommendation and raises the target price from USD 60 to USD 90.
  • Globant S.a.: Jefferies maintains its buy recommendation and reduces the target price from USD 110 to USD 80.
  • Lantheus Holdings, Inc.: Leerink Partners maintains its outperform recommendation and reduces the target price from USD 134 to USD 99.
  • Marvell Technology Group Ltd: KGI Securities Co Ltd downgrades to neutral from outperform and reduces the target price from USD 95 to USD 75.
  • Match Group, Inc.: Baptista Research maintains its hold recommendation and raises the target price from USD 34.30 to USD 41.50.
  • Toll Brothers, Inc.: Wolfe Research maintains its outperform recommendation and raises the target price from USD 130 to USD 160.