This was another consequential week for market participants. First, the minutes from the most recent FOMC meeting came out and revealed a voting group that may be in favor of rate hikes in the near future. The Treasury also announced that it was expanding its capacity to buy back older bonds from $2 billion to $4 billion. Although the amount itself is too small to impact markets, there was a lot of concern surrounding the announcement.
Many were calling this another version of quantitative easing (QE), however, this is not actually the case. This is because the Treasury cannot create money, so it’s not doing any sort of easing of existing policy. Furthermore, the Treasury currently has $31 trillion in outstanding bonds. Therefore, buying back $4 billion is basically a rounding error in the grand scheme of things.
However, gold went up, the dollar fell and bond yields moved sharply simply because of what market participants felt about what they were being told. It’s likely that existing pessimism around the economy and the potential of future rate hikes were the true drivers of investor angst.
In other news, unemployment claims were down slightly this week to 206,000 from 212,000 last week. Analysts had expected about 210,000 claims prior to the announcement’s release.
On Friday, the Flash Manufacturing PMI and Flash Services PMI came out. Manufacturing came in at 53.2 compared to an expected 53.9, which was identical to last month’s reading. Services came in at 56.8 compared to an expected 54 while last month’s reading came in at 54.6.
The S&P was down 1.22 percent this week to close at 7,674 on Friday. This was a loss of 94.88 points over the past five trading days. For the month, the market is up 2.64 percent. This week, it made a high of 7,777 on Monday morning before reversing and sliding to a low of 7,640 on Thursday afternoon.
The Dow lost 282 points this week to close Friday’s trading at 53,277. This was a loss of 0.53 percent over the last five trading days. It is up 2.41 percent over the last month. This week, the index made a high of 53,665 on Wednesday and a low of 52,788 on Thursday.
Finally, the Nasdaq was down 2.27 percent this week to close at 26,180 at the end of trading Friday. This was a decrease of 607 points over the last five trading days. For the month, the index is still up about 2 percent. During the last five days, the index made a high of 26,789 on Monday morning and a low of 26,033 on Thursday afternoon.
Gold continued its hot streak in August this week climbing to a fresh monthly high of almost $4,600 an ounce. However, it is still far from its yearly high of $5,500 an ounce set in February. Silver was also up big this week hitting nearly $70 an ounce on Friday before retreating.
The upcoming week will surely be another interesting one as a number of important news announcements are on the calendar. On Wednesday, the Core Price Index for July will be released along with preliminary GDP data from the second quarter of 2026.
On Friday, the preliminary benchmark payrolls revision for 2026 comes out. This is the difference in the number of jobs reported and the number of jobs that are found to actually exist. Last year, payrolls were reduced by 818,000, and this year, the gap is expected to widen to 911,000.