To The Moon

Despite a week packed with political drama, Wall Street kept its cool.

The Nasdaq Composite rose 1% Friday, building on Thursday’s record close and notching its best week since early July. The S&P 500 ended just a hair below its late-July high, also logging its strongest week since June. The Dow Jones Industrial Average gained 0.5%, pulling within 1,000 points of its December record and matching the Nasdaq’s early-July winning pace.

This resilience came even after last week’s turbulent jobs report, which led to the firing of the U.S. Bureau of Labor Statistics chief, and fresh tariff measures on most U.S. trading partners.

The CBOE Volatility Index (VIX) fell to 15.15, its largest weekly percentage drop since last November, signaling investors’ comfort despite the policy churn.

Cracks Beneath the Surface

Not everyone sees smooth sailing ahead. Goldman Sachs strategist David Kostin warned about widening performance gaps between “market haves” and “have-nots.”

• Median S&P 500 stock is still 12% below its one-year high.

• Market leadership is concentrated in AI, large-cap $NVIDIA(NVDA)$ $Microsoft(MSFT)$ $Apple(AAPL)$ , and industrial names, leaving defensive and small-cap sectors lagging.

• Top 20% “quality” stocks now trade at a 57% P/E premium to the bottom 20%, a valuation spread in the 94th percentile since 1995.

Historically, such extremes have limited forward gains in the “quality” factor to less than 10% over the following year.

Friday’s Market Snapshot

Index Close % Chg Dow 44,175.61 +0.47%. $S&P 500(.SPX)$ 6,389.45 +0.78%. $NASDAQ(.IXIC)$ 21,450.02 +0.98%

• Hot Stock: Gilead Sciences +8.3%

• Biggest Loser: Trade Desk -38.6%

• Best Sector: Technology +1.0% $Technology Select Sector SPDR Fund(XLK)$

• Worst Sector: Real Estate -0.8%

What’s Next: Inflation in Focus

With earnings season winding down, next week’s spotlight turns to inflation data:

• Tuesday: July CPI (forecast +2.8% YoY) & NFIB Small Business Optimism Index

• Wednesday: July PPI (forecast +2.5% YoY)

• Friday: July retail sales & August University of Michigan consumer sentiment

These reports will offer the first full look at how recent tariffs are filtering through prices.

Bottom Line

The market may have brushed off Washington’s noise this week, but narrow leadership, lofty valuations, and looming inflation prints could quickly test that calm. For now, stocks are enjoying their summer groove, but the next data wave may decide if the rally keeps running or starts to stumble.

Calm in the Chaos

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This summary is for informational purposes only and does not constitute financial advice. Investors should conduct their own research before making investment decisions.