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Stocks were mostly higher last week. However, Friday’s unexpectedly strong July nonfarm payrolls report poured cold water on the idea that the Federal Reserve is ready to slow the pace of rate hikes at its September meeting. A building market assumption that relief from aggressive Fed actions could come as soon as next month has been a contributing factor to helping stocks climb higher from their mid-June lows.

Stocks finished higher last week for the second-straight week, capping their strongest monthly performance since November 2020. Despite the Federal Reserve aggressively lifting interest rates last week and a Q2 GDP print showing the U.S. economy contracted for the second straight quarter, investors instead looked through the headwinds and focused on what may lie ahead. The S&P 500 Index gained +4.3% on the week, while the NASDAQ Composite jumped +4.7%. Notably, the S&P 500 is higher by nearly +13.0% since its June low. Growth outperformed Value for the third week in the past four, supported by better-than-feared earnings reports out of Big Tech and declining bond yields. The Dow Jones Industrials Average closed last week higher by nearly +3.0%.