U.S. stocks rebounded on Friday after stronger August PMI readings helped ease concerns about economic slowing, but the broader weekly tone remained cautious. The Dow Jones Industrial Average rose 0.98% to 53,277.01, the S&P 500 gained 0.43% to 7,674.37, and the Nasdaq climbed 0.44% to 26,180.455.
The key macro catalyst was a pickup in U.S. business activity. The U.S. August composite PMI rose to 56.0, a four-year high. Services drove much of that move: the flash services PMI came in at 56.8, the highest level in nearly 20 months, pushing the composite reading to its strongest mark since April 2022. According to the source report, the services rebound could put third-quarter U.S. GDP growth close to a 3% annualized pace and temporarily cool recession concerns.
That said, the weekly setup still looked strained. The S&P 500 and Nasdaq both logged their first weekly losses in four weeks, while the Dow fell for a second consecutive week. After the Dow’s 700-point drop on Thursday, Friday’s recovery was described more as a repair rally than a full reset of market pressure.
Treasury yields stayed elevated as gold and FX markets reacted
U.S. Treasury yields remained high despite a limited boost from the Treasury Department’s expanded long-bond buybacks. The 10-year Treasury yield stood around 4.73%, up roughly 4 basis points on the week. The 2-year Treasury yield was about 4.24%, up roughly 7 basis points over the same period.
In currency markets, the U.S. dollar index briefly touched a three-month low intraday before rebounding after the PMI release. Offshore yuan strengthened through 6.72 during the session and marked a three-year high for the fourth day within one week.
Gold continued to benefit from concern over dollar credibility and U.S. fiscal conditions. Futures gold moved above $4,600, hit a three-month high, and advanced for a third straight week.
Trade conflict with Canada and Iran warning added new risk variables
Over the weekend, new developments emerged across trade and geopolitics, adding pressure points for oil and broader risk assets.
U.S.-Canada trade talks broke down. The U.S. imposed 50% tariffs on some Canadian goods, effective Aug. 22. Canada then announced $20 billion in matching retaliatory tariffs on U.S. goods, set to take effect on Sept. 8. The report said sectors with heavier cross-border dependence inside the North American supply chain, including autos, agriculture, steel and aluminum, and electronics, are likely to draw increased attention.
Middle East tensions also tightened. Iran warned that if the United States pursued an economic war, there would be no more oil exports through the Strait of Hormuz and the Persian Gulf. Donald Trump said shifting toward an “economic war” on Iran did not mean military options were off the table.
Oil prices rose nearly 7% last week, and the weekend signals suggested upside risk in energy prices was still present heading into the new week.
Nvidia server price increase report puts earnings at center stage
At the company level, Nvidia is the name most closely watched this week.
According to the report, high-end servers equipped with Nvidia AI chips are set to become more expensive next year, with some systems expected to rise by more than 15%. The products mentioned include systems built around the Vera Rubin and Grace Blackwell chip combinations. The main driver cited was a sharp rise in memory chip costs.
The report framed that development as a double-edged signal for Nvidia. On one side, higher server prices point to still-strong AI chip demand and pricing power across the supply chain. On the other, the durability of cost pass-through will depend on whether cloud providers and AI companies can absorb higher capital spending.
Nvidia fell 0.98% on Friday to close at $214.72 and lost 4.6% over the week. The company is scheduled to report earnings this week. Market attention is focused on Blackwell shipments, guidance for data center revenue, the transition pace toward Rubin, and whether AI capital expenditure can keep supporting future orders.
The source report said a stable outlook could help the AI hardware chain recover, while cautious management commentary on supply, financing, or customer demand could keep pressure on crowded semiconductor and AI hardware trades.
Samsung was also highlighted after unveiling what the report described as the largest shareholder return plan in South Korean history. The company said it plans to return up to $79 billion this year, equivalent to half of free cash flow. Together with rising memory chip prices, that kept the memory segment positioned as a relative area of strength in the broader market.
Bitcoin surged as crypto traded alongside gold
Crypto assets also posted strong gains. Bitcoin jumped as much as 9.4% intraday on Friday and briefly approached $79,500. It finished the week up about 23%, its largest weekly gain in three years. Ethereum rose more than 30% over the week. Bitcoin later pulled back to around $76,500 over the weekend, but it still ranked among the strongest-performing assets of the week.
The report linked that move to several drivers: a weaker dollar, liquidity expectations tied to Treasury buybacks, renewed inflows into spot ETFs, and expectations for an improved regulatory framework. The fact that crypto and gold rose together was presented as a sign that capital was trading concerns over dollar credibility and a repricing of alternative assets.
U.S.-listed crypto-linked equities moved higher as well. Robinhood, Coinbase, and Strategy were all described as showing clear strength on Friday. In the short run, whether Bitcoin can hold elevated levels may shape sentiment in crypto-related stocks. Over a medium-term horizon, the report said regulatory implementation and sustained trading volume will be more important in determining whether the rally can continue.
Two events are set to drive this week’s market direction
The report identified two core events for the week ahead: Nvidia earnings and the Jackson Hole central bank conference.
On Nvidia, the stock’s 4.6% weekly decline suggested some pressure had already been priced in, but expectations for the earnings release remained high. A 15% server price increase was seen as a supportive signal, yet the market is watching AI chip demand growth, Blackwell production ramp-up, data center revenue guidance, and next-quarter expectations more closely. Any flaw in guidance could trigger renewed volatility across the AI hardware chain.
At Jackson Hole, Federal Reserve Chair Waller is due to speak. The July meeting minutes leaned hawkish, with several officials still worried about inflation. His remarks are expected to affect September Federal Open Market Committee pricing. If inflation risk remains the main message, pressure on long-end yields may stay in place. If he mentions economic slowing or fiscal strain, markets could get a temporary break.
The report also said investors need to keep tracking the tariff conflict between the U.S. and Canada as well as developments in the Middle East. The tariff escalation could affect North American supply chains and inflation expectations, while Iran-related risks could feed directly into oil prices.
The S&P 500 recovered Friday after Thursday’s sell-off, but still finished the week lower. With Nvidia earnings and the central bank gathering landing in the same week, market volatility is likely to rise, and a clearer directional signal may only emerge after both events play out.