1. Global Market Snapshot

Global equity markets showed mixed performance today. While U.S. stock futures gained—S&P 500 by approximately 0.2% and Dow Jones by around 0.8%—Wall Street stocks earlier slumped on inflationary nerves.:contentReference[oaicite:0]{index=0} European markets rebounded, with Germany’s DAX and France’s CAC 40 posting gains, though the UK’s FTSE 100 slipped marginally.:contentReference[oaicite:1]{index=1}

In Asia, Japan’s Nikkei surged by about 1.7%, powered by stronger-than-expected GDP growth in Q2.:contentReference[oaicite:2]{index=2} Conversely, Chinese markets were weighed down by disappointing retail sales (+3.7% YoY) and weak fixed asset investment (+1.6%), raising concerns of ongoing economic slowdown.:contentReference[oaicite:3]{index=3}

2. Inflation, Rates & Fed Outlook

Markets are digesting hotter-than-expected U.S. Producer Price Index (PPI) data, tempering expectations of a large interest-rate cut in September. Traders now largely anticipate a 25 basis point cut over a 50 basis point move.:contentReference[oaicite:4]{index=4}

U.S. wholesale inflation (PPI) rose 3.3% YoY in July, surpassing forecasts of 2.5%—a development that has cast doubt on the Fed’s willingness to slash rates imminently.:contentReference[oaicite:5]{index=5} Treasury yields ticked higher and the dollar strengthened.:contentReference[oaicite:6]{index=6}

3. Geopolitics & Corporate Developments

Investor attention is focused on the Trump–Putin summit in Alaska, where Ukraine ceasefire talks may influence markets.:contentReference[oaicite:7]{index=7}

Intel shares rose over 7% on reports of potential U.S. government investment to support its U.S. operations.:contentReference[oaicite:8]{index=8} Meanwhile, the UK’s FTSE 100 briefly hit new intraday highs amid optimism from strong corporate performances.:contentReference[oaicite:9]{index=9}

4. Risk Sentiment & Market Outlook

Goldman Sachs sees heightened downside risk: over a 10% chance of a 3-month market drawdown and more than 20% within a year. This stems from a weakening business cycle and subdued job creation, alongside persistent inflation pressures.:contentReference[oaicite:10]{index=10}

Stifel strategists warn of a potential 14% drop in the S&P 500 before year-end due to elevated valuations, tariff-driven inflation, and early signs of consumer slowdowns.:contentReference[oaicite:11]{index=11}

HSBC's outlook highlights five key threats to the rally: rising Treasury yields, waning investor sentiment, labor market fragility, concentration risk in AI-heavy tech, and political pressure on the Fed.:contentReference[oaicite:12]{index=12}

5. Key Drivers & Thematic Trends

Despite near-term volatility, some strategists remain bullish. James Thorne of Wellington-Altus expects the S&P 500 to climb to 7,500 by spring 2026, pointing to post-tariff policy shifts, digital asset reform, and AI infrastructure as catalysts.:contentReference[oaicite:13]{index=13}

However, the current equity rally remains narrow: only five mega-cap stocks are driving much of valuation growth, while small-cap stocks, though attractively priced, may lag.:contentReference[oaicite:14]{index=14}

6. Summary Table

7. What Investors Should Watch

• U.S. economic releases: retail sales and industrial production data later today
• Fed rhetoric at the upcoming Jackson Hole symposium for monetary policy clues:contentReference[oaicite:15]{index=15}
• Outcomes from the U.S.–Russia summit in Alaska—especially regarding Ukraine and energy markets
• Risk indicators: Treasury yields, equity breadth, and defensive sector performance
• Movements in mega-cap tech vs small-cap valuations and earnings momentum