Market wrap
Week:
S&P500: +1.0% FTSE100: +0.5% Gold: -1.5%
YTD:
S&P500: +10.0% FTSE100: +10.7 % Gold: +28.3%
S&P 500 and FTSE 100 Edge Higher to Fresh Highs
Source: Connect Weekly | Week ending August 16, 2025
Both the S&P 500 and FTSE 100 drifted higher this week, holding at or near record levels as investors digested a mixed set of economic data. Gains were fuelled by a slightly cooler US inflation print on Tuesday CPI came in 0.1% below forecasts, which bolstered bets for a September Fed rate cut, but tempered later by hotter producer price data and softer retail sales. Despite pockets of volatility, the overall tone remained constructive, with equities largely in grind-higher mode.
What drove markets this week?
Monday saw a modest pullback as traders squared positions ahead of CPI. The tone flipped on Tuesday after the inflation beat sparked a broad-based rally, sending the S&P 500 and Nasdaq 100 to fresh record closes, led by tech and materials. Wednesday delivered further record highs as breadth improved notably, while Thursday’s hotter-than-expected PPI print hit small caps and materials stocks. Friday brought softer retail sales data, which slightly undershot forecasts, but had little impact on the big-cap benchmarks.
Cannabis stocks go vertical
Weed names lit up the tape on Monday after The Wall Street Journal reported that President Trump is considering reclassifying marijuana as a less dangerous drug. Tilray, Cronos Group, Canopy Growth, and SNDL all posted outsized gains, sparking talk of renewed M&A interest and optimism for US market expansion.
‘Bullish’ IPO doubles on debut
Crypto trading platform Bullish made a blistering market debut, surging 100% on its first day of trading. The listing tapped into a resurgence of optimism in digital assets, helped by Bitcoin’s rally on regulatory tailwinds and renewed institutional interest. Traders cited Bullish’s high-profile backers, deep liquidity pool, and timing coming just days after policy moves to expand crypto access in retirement accounts as key drivers of the explosive debut.
Small caps shine, then stumble
The Russell 2000 enjoyed standout gains early in the week including a near-3% surge on Tuesday as falling rate expectations boosted rate-sensitive names. However, momentum reversed after the PPI surprise on Thursday, reminding investors that inflation risks have not fully receded. Large-cap tech, by contrast, remained resilient, with Amazon and Meta continuing to post outsized gains.
Looking ahead
With US indices at all-time highs and August liquidity thinning, the market faces a balancing act between rate-cut optimism and the potential for upside inflation surprises. Next week’s Fed minutes and a run of housing and manufacturing data could provide fresh catalysts but in a seasonal environment where headline-driven swings tend to be amplified.
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