Weekly S&P500 ChartStorm - 31 August 2025

This week: monthly charts, rate cuts vs stocks, volatility season and risk-watch, big breakouts (5 sectors/regions to have on the radar that are breaking out)

Welcome to the latest Weekly S&P500 #ChartStorm!

Learnings and conclusions from this week’s charts:

• The S&P500 closed up +1.9% in Aug (+9.8% YTD).

• Further Fed rate cuts are likely to be bullish (unless recession).

• We’re due for a seasonal uptick in volatility.

• The bullish broadening theme continues to play through.

• Seeing multiple bullish breakouts across sectors and regions.

Overall, there’s basically 3 key themes this week. First is the prospect of further rate cuts and the mostly bullish implications of that (especially if no recession, and especially for rotation/broadening of the bull). Second is the historical tendency of volatility to spike around Sep/Oct (and a slew of indicators flagging tactical caution). Third is an abundance of bullish breakouts across sectors and regions (which goes to show both how there are still plenty of opportunities out there, and the chance for bull-market longevity via bullish broadening).

You might sum it up as: keep hunting opportunities in the big picture while being mindful of risk management in the along the short-run.

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1. Happy New Month! The S&P 500 closed up +1.9% in August (vs +2.5% for the equal-weighted S&P500); placing it up +9.8% YTD (+10.8% including dividends) vs +7.4% equal-weighted (8.7% incl. divs). This marks its 4th monthly gain in a row, and the index remains comfortably above its 10-month (~200day) moving average. Looks good.

Source: 

Topdown Charts

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2. Rate Cut Wishes: As the 17th September FOMC approaches, the pressure on the Fed is rising exponentially to deliver further rate cuts — regardless of whether you think it’s right/wrong, the political sands are shifting, and it sure looks likely at this point.

As for markets, the equal-weighted S&P500 typically outperforms the cap-weighted when the Fed cuts rates… so further rate cuts would be supportive of the bullish broadening theme (catch-up, rotation, broadening out of the bull market).