The S&P 500 (Index: SPX) closed the trading week ending Friday, 28 August 2026 at 7,711.76, up 0.4% from where it closed out the preceding week.

The biggest market moving event of the week came on Friday, as the new chair of the Federal Reserve spoke at the Fed's annual retreat in Jackson Hole, Wyoming. Warsh had one message he wanted to deliver, which was the Federal Reserve would act to hike interest rates while inflation in the U.S. exceeded the Fed's target for it.

That message affected investor outlook for rate hikes. The CME Group's FedWatch Tool moved up the timing of when it expects the Fed will hike the Federal Funds Rate since the previous edition of the S&P 500 chaos series. It now projects the Fed will hike this base interest rate by a quarter percent on 16 September (2026-Q3), three months sooner than anticipated a week earlier.

The FedWatch Tool now also gives a better than 50% chance the Fed will follow up with another quarter point rate hike after its 9 December (2026-Q4) meeting.

Looking further forward, having the two rate hikes in 2026 drops the likelihood of any additional rate hikes in 2027 from the FedWatch Tool's outlook. The latest update of the dividend futures chart shows investors maintained their forward-looking focus on the upcoming future quarter of 2027-Q1, however if just given the week's news, we think it would be very likely that investors are shifting their forward-looking attention to the nearer term future of 2026-Q4.

For the near term future trajectory of the S&P 500, that Lévy flight event would be accompanied by a relatively modest change in stock prices, assuming no other new information arrives to prompt investors to shift their investment horizon back out to a more distant future quarter. Which if it were significant enough, would be accompanied by a more significant upward movement in stock prices according to the dividend futures-based model's projections.

Such a move could be driven by something like the unexpected after-the-closing-bell news of the Trump administration's deal with Venezuela to secure control of more than 65 billion barrels of oil, for example. We'll be covering the impact of that news in next week's edition.

There's a lot that hinges on the random onset of new information that affects investor expectations for the future. Speaking of which, here's an example of what that kind of information looked like during the past week.

Monday, 24 August 2026

• Signs and portents for the U.S. economy:
• US hits Canadian goods with 50% tariffs after trade talks fail
• Canada to retaliate for US tariffs, worsening ties after talks fail
• Trump threatens 50% tariffs on all cars and trucks from Canada amid trade fight
• U.S. Trade Rep Greer blames Canada for failed tariff talks: ‘They wanted more’
• Oil drops more than $2 despite new US sanctions on Iran
• US threatens countries doing business with Iran, but holds off on penalties for now
• Fed minions not so worried about rising interest rates on U.S. Treasuries, new Chief Minion faces first big test:
• Fed's Kashkari not worried about rising US Treasury yields
• Bond market anxiety raises stakes for Warsh's debut Jackson Hole speech
• Bessent could tap near $1 trillion Treasury General Account to fund bond buybacks, sources said
• Chief ECB minion getting ready to jump ship and cash in on job she's long coveted:
• ECB chief Lagarde 'ready to serve' WEF, Swiss newspaper reports
• S&P 500, Nasdaq end down on tech stocks, investors weigh Iran moves
• Stock market ends mixed as tech stocks, yields slide
• Bitcoin jumps 3%, closing in on $80,000 as rally gathers pace
• Gold hits over three-month high on dollar weakness, Treasury bond buyback plans

Tuesday, 25 August 2026

• Signs and portents for the U.S. economy:
• Why the bond market may be resetting expectations about the US
• US Treasury to stick to debt auction schedule despite bigger buybacks, Bessent says
• US Treasury buybacks a 'mistake' costing credibility, says Druckenmiller
• Oil hits one-week low as investors shrug off US sanctions on Iran
• July new home sales miss estimates
• Fed minion wants higher interest rates in U.S.:
• US rates need to rise soon absent evidence of ongoing drop in inflation, Fed's Collins says
• Four Fed bank boards wanted rate hike, minutes show
• Bigger trouble, stimulus developing in China:
• China credit slump could hit U.S. stocks, Société Générale’s Albert Edwards warns
• US eyes China overcapacity tariffs of 7.5% before Xi-Trump talks, Bloomberg News reports
• China's $119 billion policy financing tool begins project applications, faces roll-out lag
• BOJ minions getting excited to hike Japan's interest rates again:
• BOJ to speed up its tightening campaign, raise key rate to 1.25% in September
• Japan's corporate services inflation accelerates in July
• Wall Street ended higher ahead of Nvidia earnings and key inflation data
• Wall Street ends higher as tech rebounds before Nvidia results

Wednesday, 26 August 2026

• Signs and portents for the U.S. economy:
• US inflation remains elevated as GDP growth outlook brightens
• Core PCE inflation rises as expected in July, headline PCE accelerates
• Americans’ spending outpaces income for record 25 months
• Mortgage rates hit highest level in 3 weeks, weakening demand further
• Canada slaps retaliatory tariffs on US goods as trade war intensifies
• Oil prices slide 2% on Iran-Oman talks to reopen Strait of Hormuz
• Bond rout ending? Massive bets on bond rally dominate options market
• Fed minions only a bit more likely to hike U.S. interest rates:
• Fed seen a bit more likely to hike after inflation data
• Bigger trouble developing in China:
• Bill Gates, alarmed by AI, has policy ideas he wants to discuss with China's Xi
• ECB minions want one more interest rate hike in Eurozone:
• Interest rates must rise further on inflation risks, ECB's Schnabel tells Bloomberg
• ECB set for September rate hike with no appetite to signal more, sources say
• Wall Street edged lower after inflation data and ahead of Nvidia earnings
• Wall Street stocks end tad lower after hot inflation data ahead of Nvidia earnings

Thursday, 27 August 2026

• Signs and portents for the U.S. economy:
• Nvidia forecasts 70% sales growth next year, signals AI spending boom has years left to run
• Oil gains as traders weigh prospects of Hormuz reopening
• OPEC+ loses oil market sway in Iran war as China gains influence
• New Chief Fed minion has got some problems:
• Fed's Warsh faces challenge whether inflation is a problem or not
• Bessent, Warsh diverge on who should set the price of money
• As Jackson Hole conference kicks off, three Fed officials issue inflation warnings
• Fed's Collins says latest US inflation readings are 'mixed'
• Fed's Hammack tells Fox Business inflation likely to ease slowly
• BOJ minions getting excited to hike Japan's interest rates some more:
• BOJ deputy governor Himino calls for 'timely' rate hike
• ECB minions see growth signs in Eurozone, want to hike interest rates:
• Euro zone lending growth picks up, ECB says
• ECB saw a further hike as likely at July meeting
• Wall Street ended higher after Nvidia results as eyes turn to Jackson Hole
• Nasdaq, S&P 500 lifted by Nvidia's forecast; investors eye speech by Fed's Warsh
• Nvidia ignites chip stock rally as forecast shows AI boom is intact
• Nvidia forecasts 70% sales growth next year, signals AI spending boom has years left to run

Friday, 28 August 2026

• Signs and portents for the U.S. economy:
• US employment growth only modestly lower than thought in BLS revision
• Oil prices fall for the week on U.S.-Iran talks stalemate
• New Chief Fed minion says to expect hikes if inflation stays above minions' target:
• Warsh signals Fed may need to hike rates if above-target inflation persists
• Warsh's 'quieter Fed' now includes a smidgen of guidance
• VIEW Rate-hike expectations rise on Warsh speech at Jackson Hole
• The August Labor Market Report To Cement The September Fed Hike
• Mixed growth signs, stimulus developing in China:
• China's factory activity seen contracting again in August
• China’s largest five banks report strongest first-half profit since height of property crash
• China home prices seen falling slightly less this year, property investment slump deepens - Reuters poll
• China to reform home sales system to curb delivery risks
• Shanghai plans subsidies to kick start dormant offshore debt market, sources say
• BOJ minions excited to see Japan's inflation near their target, even more excited for chance to hike interest rates again as they tally the cost of propping up the yen:
• Tokyo core inflation creeps near BOJ's target, bolsters rate-hike chance
• Japan spent record $96.5 billion to support yen over past month, ministry data shows
• ECB minions worried about missing out on blockchain:
• ECB should embrace blockchain to safeguard its role, Schnabel says
• S&P 500 falls Friday after Fed’s Warsh highlights inflation worries, but index posts positive week
• Wall Street ends lower after Fed Chair Warsh reaffirms inflation fight
• Stocks close lower as Warsh vows to bring inflation down
• S&P 500 posts weekly gains as Nvidia fuels renewed AI rally

The Atlanta Fed's GDPNow tool projects +4.6% real GDP growth for the U.S. economy in 2026-Q3, rebounding from the +4.0% annualized growth it forecast a week earlier.

Image credit: Microsoft Copilot Designer. Prompt: "An editorial cartoon of the new Federal Reserve chief pointing to a PowerPoint slide that shows a train labeled 'RATE HIKES' heading toward a Wall Street bull tied to railroad tracks by a villain holding a sign that says 'INFLATION ABOVE TARGET'." We had to add a follow on prompt to "make the Fed chief look like Kevin Warsh" because the AI image generator is still defaulting to a caricature of Jerome Powell.