Last week was all about Fed speculation. This week the Fed will tell us how right those speculations were.

Monday                        S&P 500 0.11%| NASDAQ 0.56%

Manufacturing data showed unexpected weakness. It came in under 50, which marks a contractionary manufacturing sector. The manufacturing and construction data out on the day led to softer interest rates. Equities rose, with Tech stocks leading the way as Nvidia (NVDA) made major announcements.

Tuesday                       S&P 500 0.15% | NASDAQ 0.17%

Factory Orders came in as expected. JOLTs jobs openings fell to 8.059M, 300K less than in March. The weaker jobs data supported the lower rates from Monday, which moved lower on Tuesday as well. Softening economic activity and weaker jobs data both point to rate cuts by the Federal Reserve Board (FRB).

Wednesday                  S&P 500 1.18% | NASDAQ 1.96%

ISM Services PMI came in stronger than expected, at 53.8, up from 49.4 in March. That points to less reason for a rate cut, but that did not stop a market rally. The focus was on weaker job data out on Wednesday. The Growth heavy NASDAQ outperformed as a result.

Thursday                     S&P 500 0.02% | NASDAQ 0.09%

Initial jobless claims came in higher than expected. The jobs data, however, did not serve to boost markets. They took a breather after a robust day on Wednesday as they wait for the full jobs report on Friday.

Friday                           S&P 500 0.11% | NASDAQ 0.23%

Happy Jobs Friday! The unemployment rate rose to 4% and the economy added 272K jobs (nonfarm payrolls). Hourly earnings rose more than expected and participation slipped 0.2%. While unemployment ticked up to 4%, the highest level since February 2022, markets focused more on the jobs added. This outpaces the 232K twelve-month average and shows a sign of strength that is undeniable. The growth heavy NASDAQ underperformed, and interest rates rose on the day.

Conclusion                  S&P 500 1.32% | NASDAQ 2.38%

As earnings season ends, less companies are reporting. 8 major companies reported earnings, with none of them missing expectations. The slower back half of the week did not keep markets at bay. Equity markets expanded nicely for the week. Overall, advances were perpetrated by higher expectations over a FRB rate cut later this year, potentially as early as September. The coming week should provide more clarity around FRB directionality as they meet on Tuesday and Wednesday.