The S&P 500 is struggling ahead of Jackson Hole, dragged down by tech stocks for a fourth straight session. Another loss on Thursday would mark its longest skid since January, though the index remains up 28% from its April low and has only slipped just over 1% in recent days. Still, Societe Generale strategist Albert Edwards warns investors are ignoring a “slow-motion crisis” in government bond markets. Long bond yields have climbed relentlessly—U.S. 30-year Treasurys now near 4.9%, the U.K. above 5.5%, and Japan close to 3.2%—while shorter-term rates have eased. The result, Edwards says, is a rapid swing from equities looking cheap to looking “shockingly expensive,” ending the post-crisis TINA era where stocks rivalled bond yields. Edwards, who called the dot-com crash, has been warning about a tech bubble since 2024. He notes tech now makes up 37% of U.S. market value, with the top seven companies boosting capital spending by 60% in a year, crushing cashflows. At the same time, doubts are mounting—MIT among them—about AI’s profit potential for end users. He cautions that while bubbles usually burst under Fed tightening, today’s combination of weak cashflows, stretched valuations, and soaring bond yields may be enough to crack investor confidence in equities.

Wall Street strategist Tom Lee is once again dialing up his optimism for the stock market. But his bullish call comes with conditions: two key shifts need to fall into place before he sees the rally gaining full steam. Lee, who heads research at Fundstrat, believes 2025 has unfolded in three distinct chapters so far. The first stretch, running from January through April, was dominated by tariff concerns that rattled investors and kept equities on uneven footing. Then came what he calls the “most hated” V-shaped rally—from April until now—when stocks surged despite widespread skepticism and under-invested portfolios. Now, Lee argues, markets are on the verge of entering a third and defining stage: a dovish Federal Reserve combined with a long-delayed rebound in the Institute for Supply Management’s manufacturing index. “The Fed will finally cut rates after staying on pause all year,” Lee said. “And the ISM will finally move back above 50 after more than 28 months in contraction.” While the ISM gauge briefly touched above the 50 expansion threshold in January and February, it has struggled to gain momentum, spending nearly two years stuck below 51. A durable move higher would signal that manufacturing—an area that has been a drag on the economy—is stabilizing and recovering. Lee acknowledges that the path forward may not be smooth. His colleague, Fundstrat technical strategist Mark Newton, has flagged the likelihood of a market correction in the fall. That pullback, Lee says, would be a natural reset as investors digest what the Fed’s first rate cut means for both markets and the economy. “To us, this makes sense,” he explained. “The initial reaction to a Fed cut is always uncertain. But once the rate environment reflects a more dovish central bank, the backdrop improves significantly for stocks and the broader economy.” Despite the bumps ahead, Lee remains confident in his year-end forecast: an S&P 500 target of 6,600. That implies meaningful upside from Tuesday’s close of 6,411.37, when the index slipped 0.59% after a volatile trading session. For Lee, the story of 2025 is one of transition—moving past trade worries and skepticism into a phase defined by monetary easing and economic healing. If his two conditions are met, he sees stocks finishing the year with strength, setting the stage for even bigger gains in 2026.

UBS: Gold Demand Set to Hit Highest Level Since 2011 Investors are bracing for Fed Chair Jerome Powell’s Jackson Hole speech on Friday, with gold traders especially alert for hints of rate cuts. Softer labor data and easing inflation have already boosted expectations for policy easing, a trend that tends to favor gold by lowering the opportunity cost of holding the metal. UBS Global Wealth Management has turned more bullish. Strategists led by Wayne Gordon now see gold rising to $3,600 an ounce by March 2026 and $3,700 by June 2026, both lifted from prior forecasts of $3,500. The end-2025 target remains $3,500. Gold has already gained 28% this year, outperforming equities, bonds, G-10 currencies, and bitcoin. UBS cites sticky U.S. inflation, below-trend growth, questions about Fed independence, fiscal risks, and continued de-dollarization as the forces likely to push prices higher. The bank now forecasts global demand climbing 3% to 4,760 metric tons in 2025, the strongest since 2011. ETF demand is expected to reach nearly 600 metric tons—up from 450 previously—while central bank purchases should remain near historic highs. Still, the team warns that if the Fed is forced to raise rates again, gold’s rally could falter. After touching a record $3,439.20 in July, prices have cooled over the summer. Yet sentiment is shifting: DoubleLine’s Jeffrey Gundlach has called gold a true asset class, while some analysts suggest industrial metals may soon play catch-up.

Powell’s Jackson Hole Speech Could Rattle Markets, Evercore Warns Stocks kicked off the week just shy of record highs, supported by strong earnings and hopes the Federal Reserve will soon cut rates. Investors are now focused on Fed Chair Jerome Powell’s Friday speech at Jackson Hole, looking for dovish signals. But Julian Emanuel, Evercore ISI’s chief equity and quantitative strategist, warns Powell may disappoint. In a note published Sunday, Emanuel said Powell faces a tough balancing act as inflation data has reignited concerns about price pressures, while labor market reports show weakening momentum. At the same time, stock valuations are stretched. The S&P 500 trades at 25.5 times trailing earnings—among the highest since 2000—heading into what is often a seasonally weak period for equities. Emanuel points to Powell’s 2022 Jackson Hole speech, when his tough anti-inflation stance sent markets tumbling, as a reminder of the risks. This year, disappointment could come if Powell only signals a quarter-point cut on September 17, rules out a half-point move, and emphasizes that further easing will depend on incoming data. That scenario, Emanuel argues, could trigger a 7% to 15% pullback into October, even within a longer-term AI-driven bull market. His suggested plays: hedge downside with October puts on the Nasdaq-tracking Invesco QQQ Trust (QQQ), rotate into cheaper sectors like healthcare, and lighten up on pricey names including Palantir (PLTR), Cleveland-Cliffs (CLF), and Coinbase (COIN).