Friday was a milestone day: Powell used Jackson Hole to pivot the conversation toward easing, and markets didn’t hesitate. The Dow closed at record highs, small caps surged almost 4%, and cyclicals along with value outpaced growth. Powell stopped short of committing to a September cut but acknowledged that the “balance of risks” has shifted toward employment. Futures now price close to a 90% chance of a September trim, even as one more CPI and jobs report loom.

The market’s reaction was textbook as Treasuries rallied, the dollar slid, and gold popped. Energy joined consumer discretionary at the top of the leaderboard, and for the week the Dow climbed 1.5%, the S&P 500 added 0.3%, while the Nasdaq slipped 0.6%. Investors are already looking ahead: GDP and PCE this week, then Nvidia’s earnings on Wednesday evening. With a $4.2 trillion market cap and nearly 8% of the S&P’s weight, Nvidia has become the litmus test for whether AI euphoria can keep carrying equity markets.

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Powell’s pivot eased nerves, but questions remain. Inflation data have been noisy with CPI tame but PPI hot, and while Powell hinted at flexibility, Fed officials like Schmid and Hammack reminded markets not to get too far ahead of themselves. Investors have rotated aggressively into rate-sensitive sectors, homebuilders among them, betting the Fed is ready to help. But the real story may be tech fatigue. The “Mag 7” are still near highs, but signs of exhaustion are showing up in breadth data and options hedging.

This week will test the narrative. PDD reports Monday, retail earnings from Walmart, Target, and Lowe’s offered a mixed message last week, and consumer sentiment remains fragile, with some labeling “recession specials” creeping into store pricing. Nvidia’s results could swing the entire tech complex, particularly as an MIT study suggested 95% of firms haven’t yet seen returns from their generative AI investments. If enthusiasm fades, concentration risk could turn from strength to liability.

China is back in focus after regulators eased restrictions on home purchases in Shanghai, part of a broader push to stabilize property markets. The property sector remains China’s biggest domestic drag, and Beijing’s efforts to support demand underscore the stakes. At the same time, global investors are parsing what progress, if any, was made on Ukraine talks. Hopes for a breakthrough lifted European sentiment late last week, but skepticism is high, and oil markets continue to trade with a geopolitical risk premium.

Elsewhere, Asian equities opened stronger on the back of Powell’s dovish lean, suggesting the Fed’s posture is still the single most important variable in global capital flows. For Europe, the weekend’s coverage emphasized structural questions about whether reshoring chips and supply chains is feasible (or fantasy) given costs and scale.

D.C. politics are increasingly bleeding into the economy. Trump’s move to convert Chips Act funding into a government equity stake in Intel has unsettled markets, with even conservatives noting the shift toward interventionist policy. At the same time, immigration policy is reshaping the labor force. Stricter enforcement has reduced the flow of workers, temporarily supporting low unemployment but raising risks for industries that depend on immigrant labor. Layer on a job market that looks steady on the surface but is quietly stagnating with low layoffs, weak hiring, and the foundation for growth looks shakier than headlines suggest.

Meanwhile, Trump has turned his fire toward the press, singling out ABC and NBC and threatening their FCC licenses in a late-night tirade. The mix of economic intervention, immigration pressure, labor-market fragility, and media intimidation underscores the unpredictability coming out of Washington. For markets, that blend of uncertainty is as much a driver of risk sentiment as tariffs or Fed policy.

Friday’s chart was a bit of a ruse. The chart provided was the Nasdaq daily over the past year but inverted. In other words, if you think this chart looks like a buy, what you’re really saying is that the Nasdaq itself is a sell, and vice versa.

It’s an experiment in perspective. Inverting the chart strips away the bullish narrative that’s been running hot all year and forces you to look at the pattern with fresh eyes. That “support” you think looks solid? In reality, it’s resistance on the actual Nasdaq chart. That “breakout” you’re tempted to chase? In real life, it’s a breakdown.

The point isn’t to trick anyone, it’s to highlight how much of technical analysis is psychology. Sometimes turning the market upside down is the best way to check your bias.

Markets ended last week euphoric, with Powell giving just enough to keep the easing narrative alive. But the runway into September is still data-heavy, and concentration risks in tech leave equities exposed if Nvidia falters. For now, the bias is bullish, but watch sentiment closely. A Fed pivot can carry stocks higher, but if consumer spending cracks or AI hype fades, the market may need to reassess how durable this rally really is.