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The Market Wrap for August 2: Powell Delivers…Sort Of

The last few weeks of trading led up to this week’s delivery of the Federal Reserve’s interest rate decision. And Powell provided essentially what the markets wanted – a quarter-point basis cut to benchmark rates. However, over the last few trading sessions, as the economy deteriorated a bit further, investors were hoping for more. Moreover, Powell’s hawkish press conference – in which he reiterated his patience stance – made traders not very happy. As a result, stocks spent much of the week lower.

Issues on the trade front also hurt stocks this week as well. After several tweets and interviews, many senior members of the Trump Administration mentioned that a quick trade war deal with China may not be on the menu. This reversed much of the enthusiasm for a deal that had been created over the last few trading sessions.

Meanwhile, economic data continued to slow. As did a mixed earnings picture. With the season continuing its ramp up, reports have come in very mixed – with guidance trending towards caution.

All in all, the pessimism of the week caused stocks to drift much lower and end at a loss.

Be sure to check out our previous Wrap here, when earnings turned a bit more rosy.

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