A three-week rally ends; next week is Jackson Hole and Nvidia

Happy weekend. Let's recap the week. The S&P 500 fell 1.4%, its worst week since mid-July, ending a three-week winning streak. The Dow bounced nearly 500 points on Friday, but all three major indexes still finished the week lower. This time it was banks and materials, not tech, that held up relatively well.

The story that shook the market was the Treasury's buyback. The government said it would buy more of its own bonds, but the effect did not last a day and it mostly raised expectations of future inflation. Experts again pointed to the root cause, which is 40 trillion dollars of debt. Some also say the Treasury's direct hand in rates has put the Fed in an awkward position.

In AI, the credit market is sending a cautious signal. Broadcom is reportedly in talks to raise more than 60 billion dollars of debt to supply chips to AI companies, and default-risk gauges for Nvidia, Broadcom and Oracle have widened. Their share prices, however, keep rising, so two measures that usually move in opposite directions are now out of sync.

Next week is the last big test of August. Nvidia reports on Wednesday, and on Friday Fed Chair Warsh gives his first Jackson Hole speech since taking the job. The PCE inflation gauge the Fed watches closely also lands that week. Such speeches are usually technical, but with a rate hike now on the table this one will be taken far more seriously.