Week of August 30, 2021

With the backdrop of the continued chaos at the southern border and the Biden administration’s deadline for full troop withdrawal from Afghanistan rapidly approaching, the U.S. markets seemed to remain focused on the actions being taken by the Federal Reserve.  For the week, the S&P 500 gained 1.5% and 0.9% last Friday alone.  With two trading days left in August, the S&P is up 2.6%, while the Dow and NASDAQ have gained 1.5% and 3.1%, respectively.

Last week’s market rally was boosted as Federal Reserve Chair Jerome Powell said while the central bank could begin scaling back its asset purchases by the end of the year if the economy performs as expected, he anticipates rising inflation will prove transitory and sees the delta variant of the coronavirus as posing near-term risk. The central bank thus "will be carefully assessing incoming data and the evolving risks," Powell said.  The S&P and the NASDAQ closed at all-time highs last Friday.

The energy sector had the largest percentage increase last week, up 7.3%, followed by financials, up 3.5%. Other strong gainers included communication services, consumer discretionary, materials and industrials, up by more than 2% each. Technology climbed 1.4%.