Wall St rises on the day but falls for the week; bond yields and Iran in focus

The main US stock indexes experienced fluctuations on August 21, with the S&P 500 and Nasdaq snapping a three-week winning streak, while the Dow saw its second consecutive weekly decline. Investor sentiment was influenced by fluctuating government bond yields and uncertainty over progress in the Middle East. Treasury Secretary Scott Bessent announced a potential increase in Treasury repurchases, alleviating concerns about rising yields.

Economic data on August 21 showed strong growth in the US services sector, offsetting a slowdown in the manufacturing sector affected by the Iran conflict. This positive news helped ease investor worries. Robust earnings growth and corporate profit growth were cited as reasons for raising UBS Global Wealth Management's year-end target for the S&P 500 to 8,100.

However, concerns about inflation persisted, with oil futures settling higher for the sixth consecutive day due to threats of economic sanctions on Iran's trading partners. The Dow Jones Industrial Average rose 0.98%, the S&P 500 gained 0.43%, and the Nasdaq Composite increased 0.44%. For the week, the S&P 500 fell 1.43%, the Nasdaq declined 2.05%, and the Dow dropped 0.85%.

The small-cap Russell 2000 index had its biggest weekly drop since mid-June. Among the S&P 500's major sectors, materials led with a 2.2% gain, followed by healthcare and financial stocks. Utilities was the worst performer, down 2.3%. Individual stocks like Ross Stores and Robinhood saw gains, while Coinbase Global and bitcoin-hoarder Strategy also increased.

Next week's attention will focus on AI chip leader Nvidia and software companies. The week ahead includes data releases on July's Personal Consumption Expenditures price index, the Federal Reserve's preferred inflation gauge, and Fed chair Kevin Warsh's speech at the Jackson Hole symposium.