Friday's session summed up the character of this week's earnings rally in one line: strong results are no shield against a hawkish Fed. Nvidia, Marvell and Elastic all beat consensus, yet a single Warsh speech that lifted September hike odds from 35% to 57% was enough to send high-valuation semiconductors down first. Money instead rotated into cash-generative large-cap software such as ServiceNow and Amazon — a sign the market has started to scrutinize the quality of earnings again. The riskiest position right now is the simple momentum bet that 'results were good, so it goes higher.' Until the Sept. 4 jobs report and Sept. 11 CPI, it is wiser to remember that the direction of rates is setting the direction of stocks.
📊 Top Movers
🧭 Sector Performance
🇰🇷 Korean Investor Perspective
The currency acted as a buffer for Korean investors. The won strengthened, with USD/KRW down 7.82 to 1,375.67, so on a day the S&P 500 fell 0.25%, the won-translated loss for an unhedged investor was smaller than the index drop. But it cuts both ways: with the dollar index up to 99.68 after Warsh's remarks, a sustained hawkish Fed could push the rate back toward 1,390, which would instead inflate the won-based performance of US holdings. Korean investors heavily weighted in chips will feel the simultaneous slides in Nvidia, ARM and Marvell. Micron (MU), a rival to SK Hynix, held up relatively well with just a 0.27% dip, but the Philadelphia Semiconductor Index and the Sept. 4 US jobs report will drive the open of Korean equities next week.
📊 Market Overview
On Friday, Aug. 28, US stocks gave back most of their early gains and the three major indexes finished mixed. The S&P 500 fell 19.23 points (0.25%) to 7,711.76, the Nasdaq Composite dropped 138.93 points (0.52%) to 26,402.42, and the Dow Jones Industrial Average slipped 9.45 points (0.02%) to 53,559.99. All three indexes had been up as much as 0.5% right after the open, but the gains evaporated in the afternoon after Federal Reserve Chair Kevin Warsh struck a firm anti-inflation tone in his Jackson Hole keynote.
For the week, the S&P 500 rose 0.5%, the Nasdaq 0.9% and the Dow 0.5% — the first winning week in three. Midweek earnings surprises from Nvidia and Salesforce carried the weekly gain despite Friday's pullback. Still, Friday was a classic breather: profit-taking after an earnings rally colliding with a fresh dose of hawkish Fed risk.
Market breadth was poor. Only five of the S&P 500's 11 sectors rose, and the small-cap Russell 2000 lagged large caps with a decline of more than 1%. Technology (XLK) was weakest, down 1.55%, with semiconductors leading the index lower. Communication services and consumer discretionary, by contrast, propped up the tape on strength in Alphabet and Amazon.
🔑 Key Issues
1. Warsh's Jackson Hole debut — "prices come first" In his first Jackson Hole keynote as chair, Kevin Warsh insisted that "the Fed's predominant focus right now should be on prices." He said he was "impressed" with the overall strength of the US economy but was concerned that the "underlying trends" in inflation had not improved, and left the door open to further tightening by saying the Fed has "more work to do." July PCE inflation ran at 3.7% year over year (3.3% core) and CPI at 3.4%, both well above the Fed's 2% target.
2. September rate-hike odds jump to 57% Before the speech, markets priced roughly a 35% chance of a 25bp September hike; immediately after Warsh spoke, that jumped to 57% on the CME FedWatch tool, and to around 48% on the prediction platform Kalshi. The debate has shifted from "how big a cut" to "hike or hold." Treasury yields repriced hawkishly, with the 2-year up about 8bp and the 10-year up 4–5bp, a bear-flattening move. The 10-year closed at 4.72%.
3. Semiconductor profit-taking — Nvidia -4.6%, ARM -6.3% The chips that drove midweek's Nvidia-led rally (Thursday +8.7%) became the epicenter of selling on Friday. Nvidia closed down 4.57% at $217.55 and ARM tumbled 6.33% to $239.05. Intel -2.85%, AMD -2.33% and Broadcom -0.74% were also weak. Marvell Technology, which reported after Thursday's close, posted non-GAAP EPS of $0.94 (just above the $0.93 consensus) and revenue of $2.739 billion (+37% YoY), yet the stock fell more than 9%. Rubrik dropped 11%. Analysts cited the steep prior run-up and caution toward high-valuation names amid rate-hike fears. The SMH semiconductor ETF fell more than 3% on the week.
4. Software and cyclicals held up While chips sank, large-cap software and some cyclicals actually rose. ServiceNow (NOW) jumped 4.54%, Amazon (AMZN) gained 3.97%, and Microsoft (+1.68%), Alphabet (+1.74%) and Salesforce (+1.57%) were firm. Elastic surged more than 18% after adjusted EPS of $0.70 topped the $0.58 consensus and it raised full-year guidance, reinforcing the narrative that AI does not necessarily cannibalize software vendors' results. Communication services (XLC +1.42%) and consumer discretionary (XLY +1.15%) led sector gains.
5. PayPal -12.7% on a collapsed buyout Payments firm PayPal plunged 12.71% after Stripe and Advent International reportedly abandoned talks over a $50 billion acquisition. The sudden unwinding of takeover-premium expectations weighed on sentiment across fintech.
📊 Sector Moves
| Sector | Change | Key Driver |
|---|---|---|
| Communication Services | +1.42% | Alphabet/Meta strength, ad-cycle hopes |
| Consumer Discretionary | +1.15% | Amazon +4%, McDonald's +1.9% |
| Energy | +0.63% | Chevron +1.1%, oil steady |
| Consumer Staples | +0.43% | Defensive bid, Walmart/Coca-Cola up modestly |
| Financials | +0.38% | Wells Fargo +2%, BofA +1.9%, higher-rate tailwind |
| Materials | -0.09% | Directionless |
| Health Care | -0.24% | Gilead -2.1%, Amgen -1.1% weak |
| Real Estate | -0.40% | REITs pressured by higher yields |
| Industrials | -0.93% | Caterpillar -2.1%, 3M -2.5% |
| Utilities | -1.04% | Yield spike hits dividend plays, NextEra -2% |
| Technology | -1.55% | Nvidia/ARM/Intel slump, chip profit-taking |
🌍 Global Markets
- Europe STOXX 600: 655.16, +0.51%. European markets closed before the US hawkish risk flared, holding relative strength.
- Dollar Index (DXY): 99.68, +0.53%. Warsh's hawkish remarks lifted rate-hike expectations and turned the dollar higher.
- US 10-year Treasury yield: 4.72%, up about 5bp. The 2-year rose roughly 8bp, a front-end-led flattening.
- WTI crude: $83.43 a barrel, -0.12%, essentially flat. Demand worries and stable supply kept it in a narrow range.
- Gold: $4,505 an ounce, -2.27%. Rising real yields and a stronger dollar drove a sharp pullback in a metal that had run up quickly.
🚀 SPCX (SpaceX) Watch
SpaceX (SPCX) closed up 0.45% at $141.50, a steady showing versus the indexes. There was nothing unusual in volume, and the move tracked the broad market rather than any single catalyst. On the news front, a plan to build a $100 billion spaceport in Louisiana was recently viewed positively, and heavy investment continues in Starship, next-generation Starlink V3 satellites and AI compute infrastructure. However, after the July Starship flight-test 13 struggled to reignite first-stage Raptor engines, the timing and success of the next test flight remain a focus for investors. The 52-week range is $104.83–$225.64, and the average analyst price target is around $219.
⚠️ Investor Cautions
Friday's core message is that the market's baseline assumption about the Fed's path has changed. Just weeks ago the debate was the size of a September cut; now it is whether the Fed hikes. In a stagflation-tinged mix — cooling employment (July nonfarm payrolls -23,000, unemployment 4.1%) alongside inflation stuck in the high 3% range — a Fed that prioritizes prices could tighten into a growth slowdown. High-valuation growth names, especially recently surging semiconductors, and rate-sensitive assets such as dividend stocks and REITs, may see rising volatility. The final August consumer sentiment reading of 51.7, still in contraction territory, also warrants caution on consumption momentum. Next week's August jobs report will be the first test of this stagflation debate.
👁 What to Watch Next Session
- Whether the S&P 500 holds 7,700: Friday's close of 7,711.76 sits just above the 7,700 psychological support. A break opens room toward the 20-day moving average (around 7,650); reclaiming 7,750 would suggest a rally restart.
- Strength of any semiconductor (SOX/SMH) bounce: watch the opening tape for dip buying near Nvidia $217 and ARM $239. If Nvidia fails to hold $215, it gives back more than half of Thursday's +8.7% earnings gap.
- 10-year yield resistance at 4.75%: a break above 4.75% adds pressure on tech; a move back below 4.70% would signal the hawkish repricing went too far.
- Whether DXY reclaims 100: back above 100 is a headwind for emerging markets, commodities and exporters, and adds upward pressure on USD/KRW.
- How Friday's plungers open: whether PayPal (-12.7%) and Marvell (down about 9%) trim losses on a rebound bid or fall further is a gauge of fintech and chip sentiment.
💡 Upcoming Events
- Sep 1 (Tue): ISM Manufacturing PMI (Aug)
- Sep 2 (Wed): Broadcom (AVGO) Q3 results (after the close)
- Sep 3 (Thu): ISM Services PMI (Aug), weekly jobless claims, Zscaler and Lululemon earnings
- Sep 4 (Fri): August jobs report (nonfarm payrolls, unemployment) — consensus around +50,000
- Sep 9 (Wed): Oracle (ORCL) Q1 results
- Sep 10 (Wed): Producer Price Index (Aug)
- Sep 11 (Thu): Consumer Price Index (Aug)
- Sep 15–16: FOMC meeting, rate decision and press conference Sep 16 at 2:00 p.m. ET
📚 Sources
- Stock Market News for Aug 28, 2026 — Yahoo Finance/Zacks
- Stock market today: Dow, S&P 500, Nasdaq end week on down note as rate-hike bets jump — Yahoo Finance
- September Fed decision is now a coin flip as rate hike odds increase post Warsh — CNBC
- Fed chair Warsh, concerned about inflation, says bank 'has more work to do' — The Washington Post
- Stock Market Midday, Aug. 28: Stocks Edge Higher on Fed's Clear Inflation Message — The Motley Fool
- Marvell Technology, Inc. Reports Second Quarter of Fiscal Year 2027 Financial Results — Marvell IR
- Elastic Stock Jumps After Q1 Earnings Beat, Fiscal 2027 Guidance Raise — Benzinga
- NVIDIA (NASDAQ:NVDA) Price Target Raised to $345.00 at Wedbush — Defense World
- Broadcom Inc. to Announce Third Quarter Fiscal Year 2026 Financial Results on September 2, 2026 — Yahoo Finance
- US jobs report: Employment Situation release schedule — U.S. Bureau of Labor Statistics