T&Q Morning Briefing

Tuesday brought the first real stumble in weeks for mega-cap tech. The Nasdaq fell 1.5%, the S&P 500 slipped 0.6%, and a cluster of the Mag 7 names led the charge lower. What stood out wasn’t just the losses, but the hedging: Bloomberg flagged a jump in demand for downside protection, particularly disaster puts on tech, suggesting some traders are bracing for turbulence. Still, breadth across the S&P remained positive, showing the pullback was more about concentrated leaders than the broader market.

The consumer remains the key test. Home Depot’s results underscored caution among households even as housing starts surprised to the upside. Target reports this morning, Walmart tomorrow, and together they’ll provide the best look at how tariffs and higher prices are filtering through spending. Treasury yields eased slightly, with the 10-year back near 4.31%, and crude slid toward $62, reflecting tempered demand expectations.

With Jackson Hole now just two days away, traders are squarely focused on Powell’s tone. Futures still price a near-certainty of a September cut, but the Fed has been careful not to box itself in. President Trump, meanwhile, is tying Powell’s fate directly to policy decisions, ratcheting up the political heat.

Investors are starting to confront what happens if the Mag 7’s leadership wobbles. Together with Tesla, they’ve powered most of the S&P’s gains this year, and concentration risk is back under the microscope. While energy, banks, and defensives are showing relative strength, it’s hard to see the tape higher without tech regaining its stride.

At the same time, sectors sensitive to interest rates, like real estate and utilities, remain pressured, even as homebuilders continue to attract flows on the rate-cut narrative. The Fed’s symposium could either reinforce or undercut that trade.

Geopolitics continue to simmer. Trump’s meeting with Zelensky produced optics but no real breakthroughs, leaving Ukraine’s outlook as fragile as ever. Israel’s call-up of 60,000 reservists ahead of an assault on Gaza City signals escalation in the Middle East. And on trade, the tariff status quo holds: steel and aluminum remain protected, with Trump allies suggesting the current setup “works pretty well” for U.S. interests. That makes supply chain and consumer inflation risks a persistent backdrop.

China’s economy is also under pressure, and U.S. scrutiny of AI and advanced chip exports remains a bipartisan theme in Washington. For investors, that keeps the focus on where global tech leadership will land over the next decade.

Powell is back under the political microscope. Trump is increasingly explicit that Powell’s reappointment hinges on faster rate cuts, an unusual public linkage that only raises the stakes for Jackson Hole. Meanwhile, questions are mounting around the accuracy of U.S. jobs data, with critics warning that flawed readings could distort policy at a delicate moment.

Beyond the Fed, the administration is pressing its tech agenda, including expanded scrutiny of migrants’ social media data, while Elon Musk’s hints at forming a third party highlight how nontraditional figures are reshaping the political backdrop heading into 2026.

Markets are feeling their first hint of fragility in weeks. The Mag 7 are showing cracks, retailers are testing consumer resilience, and the Fed is under unusual political pressure just as Powell heads to Wyoming. That doesn’t mean the rally is done, but it does mean Friday could reset expectations in a meaningful way.