Stocks Edge Higher Despite Mixed Inflation Data
Week Ending August 15, 2025
Markets moved higher last week as investors weighed conflicting inflation signals while keeping focus on the Federal Reserve’s September meeting.
The S&P 500 advanced 0.94%, the Nasdaq Composite added 0.81%, and the Dow Jones Industrial Average gained 1.74%. Overseas, the MSCI EAFE Index, which tracks developed international markets, rose 2.16%. Closer to home, the S&P/TSX Composite Index gained 1.12%, supported by energy and financial shares.
Market Overview
Weekly Market Performance (August 11 – 15)
- S&P 500: +0.94%
- Nasdaq Composite: +0.81%
- Dow Jones Industrial Average: +1.74%
- MSCI EAFE (International Developed Markets): +2.16%
- S&P/TSX Composite Index (Canada): +1.12%
Third Gain in Four Weeks
Stocks began the week on a cautious note ahead of July’s inflation reports. The White House’s executive order on Monday, which extended tariff deadlines for China by 90 days, had little effect on investor sentiment.
Momentum picked up midweek after the Consumer Price Index (CPI) showed that retail inflation held steady in July, a better result than many had expected. That news sparked a rally, especially in small-cap companies, with the Russell 2000 climbing 5% over Tuesday and Wednesday.
The positive tone faded Thursday after the Producer Price Index (PPI) revealed wholesale inflation hit a three-year high. Despite the midweek pullback, the major U.S. indexes still notched their third weekly gain in the past four weeks, with the S&P 500 and Nasdaq both advancing in four of the last five weeks.
In Canada, the TSX followed global markets higher but gains were tempered by mixed corporate earnings. Strength in energy and financials helped offset weaker results in materials and select consumer names.
A Mixed Inflation Story
Inflation remains a tug-of-war for investors.
- CPI: July’s retail inflation stayed steady, which markets welcomed. However, “core” inflation (which strips out food and energy) came in slightly hotter than economists had expected.
- PPI: Later in the week, wholesale prices jumped to a three-year high, renewing concerns that inflationary pressures may still be building beneath the surface.
The split picture left investors uncertain, as the Fed continues to weigh whether to adjust rates at its September meeting.
Key Economic Reports: Week Ahead (August 18–22, 2025)
Monday, August 18
- Homebuilder Confidence Index
Tuesday, August 19
- Housing Starts
- Building Permits
- Remarks from Federal Reserve Governor Michelle Bowman
Wednesday, August 20
- Minutes from the July Fed FOMC Meeting
- Remarks from Fed Governor Christopher Waller
- Remarks from Atlanta Fed President Raphael Bostic
Thursday, August 21
- Weekly Jobless Claims
- Services & Manufacturing PMI Composite
- Existing Home Sales
- Leading Economic Indicators
- 30-Year TIPS Auction
- Fed Balance Sheet
- Remarks from Atlanta Fed President Raphael Bostic
Friday, August 22 - Fed Chair Jerome Powell speaks
Corporate Earnings: This Week
Monday, August 18
- Palo Alto Networks, Inc. (PANW)
Tuesday, August 19
- The Home Depot, Inc. (HD)
Wednesday, August 20
- The TJX Companies, Inc. (TJX)
- Lowe’s Companies, Inc. (LOW)
- Analog Devices, Inc. (ADI)
Thursday, August 21
- Walmart Inc. (WMT)
- Intuit Inc. (INTU)
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