Powell, Politics, and Profits: Markets Close Summer with a Bang

Daniel Ledenev
Aug 30
6 min read

👋 Welcome Back Investors! (August 25 to 29, 2025)

The final week of August kept traders on edge, mixing political drama with fresh earnings and a watchful eye on the Fed. Wall Street cooled early in the week as investors braced for Nvidia’s results and another round of jobs data, while Trump’s push against the Fed stirred worries about central bank independence. Still, Powell’s dovish tone lingered in the background, helping the S&P 500 close the month in the green. Globally, India’s markets pushed higher, UK stocks stumbled, and commodities held steady under cautious trading. It was a reminder that even in the dog days of summer, the markets never sleep.

🌍 Global Investors Eye U.S. Policy Turbulence

Global markets are increasingly uneasy as political pressure on the Federal Reserve intensifies. President Trump’s push to remove Fed Governor Lisa Cook, and his broader calls for more aggressive rate cuts have fueled concerns that U.S. monetary policy could become entangled with politics at a delicate moment for the economy. Investors abroad are watching closely. The Fed’s credibility as an independent institution has long anchored global trust in U.S. markets. Any perception of interference risks weakening that confidence, potentially putting added pressure on the dollar, bond yields, and emerging-market currencies. Analysts warn that if U.S. policy shifts appear politically motivated, capital flows could become more volatile and risk premiums across global assets may rise.

For now, markets have held steady, buoyed by expectations of an eventual Fed pivot toward easing. But the episode highlights a bigger theme for global investors: that political drama in Washington doesn’t just stay at home, it ripples through the entire financial system.

📉 Wall Street Slips as Investors Turn Cautious

Stocks pulled back on Monday as Wall Street shifted into wait and see mode ahead of a heavy week of earnings and economic data. The Dow Jones Industrial Average fell 349 points (-0.8%), while the S&P 500 lost 0.4% and the Nasdaq edged down 0.2%. The losses snapped the market’s recent winning streak, reflecting investor hesitation after Powell’s dovish Jackson Hole remarks had lifted optimism just days earlier. Corporate headlines added to the day’s choppiness. Keurig Dr Pepper tumbled more than 11% after unveiling plans for an $18 billion acquisition of JDE Peet’s, sparking worries about debt and integration risks. Nvidia’s upcoming earnings dominated conversations, with traders nervous about whether the AI leader could justify its massive rally. Meanwhile, broader consumer names and industrials traded lower as markets priced in a softer labor outlook and lingering geopolitical uncertainty.

Despite the dip, analysts noted the pullback looked more like profit-taking than panic. With the S&P 500 still up nearly 2% in August, many investors remain optimistic that easing inflation and potential rate cuts will keep a floor under equities. For now, however, Wall Street is bracing for clarity from both the Fed and corporate America before making its next big move.

💻 Nvidia Tops Expectations but Guidance Cools the Hype

All eyes were on Nvidia this week as the AI chip giant delivered its Q2 2026 earnings, and the results didn’t disappoint, though the outlook gave investors reason to pause. The company reported revenue of $46.7 billion, up sharply from the prior year and ahead of Wall Street’s estimates, driven once again by booming demand for AI accelerators and data center chips. Earnings per share also topped forecasts, reinforcing Nvidia’s role at the center of the AI boom. But the bigger story was guidance. While Nvidia projected another quarter of strong growth, its forecast came in slightly below the market’s most bullish expectations. That was enough to cool some of the hype, with shares swinging between gains and losses in after-hours trading. Analysts noted that the bar for Nvidia has become exceptionally high after months of meteoric stock performance, making even a “beat” feel underwhelming.

The earnings call highlighted both opportunity and risk: management emphasized expanding AI adoption across cloud, enterprise, and consumer markets, while also warning of potential supply constraints and competitive pressures. For investors, the message was clear; Nvidia remains the undisputed leader in AI hardware, but expectations may need to adjust after an extraordinary run.

👷 Weak Jobs Market Strengthens Case for Fed Cuts

The Federal Reserve looks set to cut interest rates in September, and the latest jobs picture only reinforces the case. Hiring has slowed to a crawl this summer, with the U.S. economy adding just 35,000 jobs on average from May through July, the weakest stretch since the pandemic. Economists expect August to bring only about 75,000 new jobs, with unemployment ticking up to 4.3%, a near four-year high. Fed Chair Jerome Powell acknowledged last week that the labor market has deteriorated enough to warrant action, even hinting that the government’s job figures have overstated strength in recent months. Revisions already slashed hundreds of thousands of jobs from earlier reports, and analysts warn another downward adjustment could be coming in September.

While tariffs and trade wars under the Trump administration added strain, businesses were already showing caution before then, and Fed officials now say employment risks outweigh inflation concerns. Governor Chris Waller, who long argued the job market was weaker than reported, declared data now “put an exclamation point” on his view. For Powell, the takeaway is clear: downside risks to employment are rising, and the Fed is prepared to cut rates to cushion the slowdown.

🥇 Trump’s Gold Tariffs Shake the Market

The gold market was rattled this week after President Trump announced new tariffs on imported bullion, targeting bars from key European producers. The move, framed as part of his broader trade push, immediately injected volatility into precious metals trading. Prices, which had been hovering near record highs, dipped as traders weighed the potential disruption to supply chains against the possibility of higher safe-haven demand. Analysts say the tariffs could create a two-sided effect: limiting flows of foreign gold into the U.S. while simultaneously boosting domestic demand for protection against policy uncertainty. Some also warned that the move risks straining relationships with global partners and distorting the bullion market. For investors, it adds yet another layer of political drama to an already complex outlook, where interest rate policy, inflation trends, and geopolitical risks were already driving volatility.

In short, gold remains at the center of the storm, both as a safe-haven asset and now a political bargaining chip.

👀 Stocks to Watch: What This Week’s Moves Reveal

The final week of August kept investors on their toes as Powell’s dovish Jackson Hole tone lingered, earnings delivered surprises, and political drama around the Fed stirred global chatter. Wall Street cooled early in the week before roaring back on optimism for rate cuts, while sector movers told their own stories. From retail to AI, here are the stocks that made waves this week:

Nvidia (NVDA) – Reported Q2 earnings of $32.5B, topping estimates but offering cautious guidance. Shares wavered as investors weighed record AI demand against lofty expectations.
Zoom (ZM) – Surged over 13% after a strong earnings beat and upbeat guidance, proving the work-from-anywhere model still has momentum.
Ubiquiti (UI) – Rocked markets with a 31% jump after raising its dividend, launching a $500M buyback, and beating revenue forecasts.
Intuit (INTU) – Dropped about 5% despite topping estimates, as its cautious 2026 outlook left investors unimpressed.
Workday (WDAY) – Slipped nearly 3% after lowering forward guidance, though Q2 results were solid and its new AI acquisition drew attention.
Keurig Dr Pepper (KDP) – Tumbled 11% after announcing an $18B acquisition of JDE Peet’s, sparking debt and integration worries.

🛎️That’s a Wrap!

That’s it for this week’s recap, and what a week it was. Powell’s Jackson Hole comments kept rate-cut hopes alive, pushing the Dow to a record close. Earnings kept traders busy, Zoom and Ubiquiti popped, while Intuit, Workday, and BJ’s stumbled. Nvidia’s results beat expectations but cautious guidance cooled some of the AI hype. Gold stayed under $3,400, oil remained pressured, and global markets sent mixed signals. With jobs data ahead, September could bring even more twists.

Until then, stay focused and stay curious. Catch you next week 👋