It's All About Nvidia

* Analyzing the markets with Richie Naso, a Wall Street veteran of over 40 years and former member of the NYSE.

DJIA 52-wk: +10.82% | YTD: +7.26% | Wkly: +1.53%

S&P 500 52-wk: +14.77% | YTD: +9.95% | Wkly: +0.27%

NASDAQ 52-wk: +20.24% | YTD: +11.32% | Wkly: -0.58%

Roundhill Mag Seven ETF 52-wk: +31.65% | YTD: +9.90% | Wkly: -1.11%

Weekly Market Highlights

Friday Rally Fueled by Powell’s Dovish Signal

• Dow Jones Industrial Average soared 846 points (≈1.9%), hitting a record closing high above 45,000—closing at approximately 45,631.74. Investors reports.
• S&P 500 climbed 1.5%, nearing its record levels. AP News reports.
• Nasdaq Composite also jumped 1.9% on the day, though it ended the week slightly down around 0.6%.Investors reports.

2. Weekly Index Performance

• Dow: +1.5% gain for the week
• S&P 500: modest weekly rise (~0.2–0.3%)
• Nasdaq: weekly decline of ~0.6%
• Russell 2000 (small caps): strong outperformance with +3.3% to +4% gains. AP News reports.
  
  

3. Key Drivers Behind the Moves

• Jerome Powell’s speech at the Jackson Hole symposium hinted that interest rate cuts could begin as early as September, significantly boosting investor The Guardian reports.
• Falling Treasury yields further supported equity prices, especially in rate-sensitive sectors. Investors reports.
• Sector & stock specifics:
• Homebuilders surged, with the SPDR Homebuilders ETF up ~5%.
• Enphase Energy jumped over 10%.
• Builders FirstSource gained ~8–10%.
• Intel: +5–7% following reports of a potential 10% U.S. government stake.
• Zoom: nearly +13% on strong quarterly results.
• Intuit, Workday, and CSX saw declines due to weak guidance or disappointing earning Investopedia reports.
  
  

4. Early-Week Market Context

• Monday–Wednesday (Aug 18–20) markets were relatively quiet, trading in tight ranges as investors awaited Powell’s remarks. UpsideTrader reports.
• Inflation signals remained mixed, with CPI steady but core inflation higher than expected—adding caution. Park Hill Financial Partners reports.
• Value stocks outperformed growth stocks, with large-cap value indices up ~1.8% vs. growth down ~0.8%. Edward Jones reports.
• Existing home sales rose (~2%), aided by moderating mortgage rates. Jhinvestiments reports.
• Canada removed some retaliatory tariffs against the U.S., though key rates remained. Jhinvestiments reports.
  

Bottom line: Markets rallied late in the week thanks to renewed hopes for Fed rate cuts and dovish messaging. Small caps and value stocks led the charge, while momentum from tech and growth lagged slightly.

Defense Stocks Are Having a Great Year. These 12 Have More Room to Run (Barron's)

Defense spending is set to rise around the globe, but picking defense-stock winners amid increasingly complex threats, changing global alliances, and the proliferation of artificial-intelligence-trained unmanned systems isn’t easy. Northrop Grumman (NOC -0.80%) and General Dynamics (GD +0.97%) might be interesting as contrarian plays.

Shares of defense companies have had a fantastic year, with the Global X Defense Tech exchange-traded fund up 63% in 2025. A lot of that is due to Palantir Technologies, its largest holding, yet the average stock in the ETF not named Palantir is up 15%, a sign of just how well the group is doing.

And for good reason. With hot spots in Europe and the Middle East, and others likely to pop up in Asia and elsewhere, the U.S. defense budget is set to top $1 trillion in fiscal year 2026. European nations spend roughly half that, but recent commitments won by the Trump administration would see that growth to roughly $1 trillion by 2035, implying 8% to 9% growth for a decade in Europe.

“Defense spending commitments provide a policy floor, while geopolitical uncertainty supplies the premium, together defining the transatlantic defense sector backdrop,” writes 22V Research’s managing director and head of Washington policy research, Kim Wallace.

That strength is reflected in individual defense stocks. Of the 50-plus stocks 22V looked at, 12 look technically strong—nine in the U.S. and three in Europe. They include GE Aerospace (GE-0.81%), RTX (RTX -0.05%), Boeing, General Dynamics, Northrop Grumman, Taser maker Axon Enterprise, L3Harris Technologies, component supplier Curtiss-Wright, nuclear technology supplier BWX Technologies, jet engine makers Safran and Rolls-Royce Holdings, as well as Italian defense aerospace and defense company Leonardo.

Some top-performing defense stocks failed to make the list, such as drone makers Kratos Defense & Security Solutions and AeroVironment, two stocks Barron’s recommended earlier this year. That doesn’t have anything to do with fundamentals and everything to do with their charts. With shares of the two companies up 90% and 40%, respectively, over the past three months, they might be due for a pullback.

Charts only tell part of the story, however. But Wall Street likes the fundamentals on 10 of 22V’s 12 stocks. Only General Dynamics and Northrop Grumman have below-average Buy-rating ratios, with 44% of analysts covering the two companies recommending shares. The average Buy-rating ratio for stocks in the S&P 500 (SPX+1.52%) is about 55%. The average Buy-rating ratio for the other 10 stocks is about 70%.

Wall Street could warm up to Northrop and General Dynamics soon. Both recently reported strong second-quarter numbers. And both trade for below-market price/earnings ratios, despite Wall Street forecasting double-digit earnings growth for the next couple of years. General Dynamics, which makes everything from Army tanks to Navy destroyers, can benefit from the Trump administration’s push to expand U.S. shipbuilding. Northrop Grumman, probably best known for its stealth bomber, is well-positioned to win business related to the president’s Golden Dome missile defense initiative.

Those are two cases where Wall Street’s analysts might just have it wrong.

Muni Bonds. Two Pros Point the Way

Nvidia (NVDA) results on Wednesday, August 27, highlight next week's about of earnings.

Other companies reporting in the coming week include Alibaba (BABA), Okta (OKTA), Abercrombie & Fitch
(ANF), CrowdStrike (CRWD), Five Below (FIVE), HP (HP), Kohl's (KSS), Snowflake (SNOW), J.M. Smucker (SJM), Urban Outfitters (URBN), Affirm (AFRM), Best Buy (BBY), Bath & Body Works (BBWI), Dick's Sporting Goods (DKS), Dell (DELL), Dollar General (DG), Gap (GAP), Petco (WOOF), and Ulta (ULTA).

Now that they bought the dip again, the follow through from here is all about NVDA

— Richie

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