Market Overview
It was a week that took a roundabout path to get almost nowhere — and that's not a knock on it. The S&P 500 cash index opened at 7,697.52 and closed at 7,718.60, a gain of just +0.27% on the week. In MES futures terms, we opened at 7,692.25 and settled at 7,715.00, a +22.8 point move. Straightforward headline. But the week's 144.75-point range — from a low of 7,621.50 to a high of 7,766.25 — tells a far more interesting story.
Monday kicked things off with a geopolitical gut-punch. Over the weekend, U.S. Central Command confirmed airstrikes on Iranian targets at Larak Island, the first publicly acknowledged U.S. strike on Iranian soil since late July. Markets opened under pressure, and the ES didn't bounce far — Monday's range was a tight 30 points (high 7,704.75, low 7,674.75), closing down 3 points to 7,698.75. It was risk-off, but orderly.
Tuesday was messier. The Dow and S&P 500 were on track for their worst day since August 20. The ongoing U.S.-Iran tension kept a lid on sentiment, and the ES gapped lower at the open (7,645.75), spent the day churning in a wide 52-point range, and closed down another 10 points at 7,635.75. Two days in, we were sitting near the lows of what would become the week's range. 7,621.50 — Tuesday's intraday low — was the floor the market needed to hold.
It held. Wednesday brought the reversal. The ES opened at 7,654, tagged a morning low of 7,643.25, and then grinded higher all session, closing at 7,676.00 for a +22-point gain on the day. S&P 500 and Dow jumped after back-to-back losing days as some of the geopolitical heat faded and buyers stepped back in.
Thursday was the week's standout session. The Dow had its best day in about a month, climbing 1.2%, while the S&P 500 rallied roughly 1% in its best performance since August 4. Long-dated bond yields fell and the dollar retreated, giving equities room to run. The ES opened at 7,703.50, pushed straight to a session high of 7,766.25 — the week's high — and closed at 7,754.50, up 51 points. Clean, one-directional price action.
Then came Friday's jobs report and the week gave back some of its gains. Nonfarm payrolls grew 162,000 in August, far exceeding the roughly 55,000 that economists had forecast, with the unemployment rate holding steady at 4.1%. A stronger-than-anticipated increase in U.S. jobs drove stocks and short-dated bonds lower, with traders boosting their bets the Federal Reserve will raise rates this month. Money markets priced in an over 50% chance of a hike in September. The ES opened at 7,741.50, faded through the session, and closed at 7,724.25, down 17.2 points. We ended the week well off the Thursday high but still net positive — and notably, we held above the week's midpoint.
VIX closed at 14.53, down 4.66% on the week, which lines up with what the price action showed: this wasn't a fear-driven market despite the geopolitical noise. The 10-year yield closed at 4.78%, up slightly on the week — a headwind that never fully went away.