WC-9/1: Expect a Volatile Week
Market signals are oscillating and mixed.
Weekly Market Outlook
Investors begin this holiday-shortened week buoyed by signals that the Fed may finally shift into easing mode. Fed Governor Christopher Waller expressly backed a September rate cut, citing labor-market deterioration, while Fed Chair Jerome Powell’s recent comments reinforced a dovish tilt. These remarks have set the stage for sensitive market behavior ahead of key data releases and corporate reports.
S&P 500 RSI: 66.14 and Nearing Overbought Territory
The RSI has climbed to 66.14, pushing closer to the overbought threshold of 70. This suggests bullish momentum remains strong, but upside may be limited unless economic data or earnings deliver significant positive surprises. Caution is warranted, as markets could be vulnerable to a pullback if sentiment shifts
McClellan Oscillator (S&P 500): 0.0518 and Oscillating in Declination
Breadth remains flat, indicating a tug-of-war between advancing and declining stocks. Without broader participation, the market’s upside could be fragile, hinging on upcoming data to tip the scale.
This Week’s Market Catalyst: Labor Data, Construction Spending, & AI-Led Tech Earnings
1. August Nonfarm Payrolls & Labor Data
Labor Day frames a pivotal week as markets await Friday’s U.S. nonfarm payrolls report and unemployment rate. Following July’s weak jobs numbers, traders are bracing for fresh signs of weakness that could cement expectations for a September rate cut.
2. ISM Manufacturing & Services PMIs / Construction Spending
Early-week data—especially the ISM Manufacturing and Services PMIs, along with construction spending and JOLTs job openings—will reveal whether softness in manufacturing is spreading to services and labor demand.
3. AI-Led Tech Earnings
Tech remains in focus with major reports from Salesforce (Wednesday) and Broadcom (Thursday), spotlighting AI-driven demand cycles. Earnings beats here could reignite sector leadership, while misses may reverberate across growth stocks.
Stay vigilant this week as mixed signals indicate volatility for the days to come.