Sector performance showed a more balanced tone compared to July. Health Care rebounded strongly, gaining 5.4% to lead all sectors, followed by Materials at 5.2%. Technology and Utilities were the only declining sectors, as Industrials finished flat in August.
The U.S. labor market continued to weaken as the Unemployment Rate ticked up to 4.2% and Labor Force Participation declined for the fourth straight month. Just 73,000 jobs were added in July, missing expectations for the third month running. The Median Sales Price of Existing Homes fell 2.38%, marking the first monthly decline since January. The Fed Funds Rate remained unchanged, but a dovish tone from Fed Chair Powell at Jackson Hole increased speculation that rate cuts could arrive as soon as September.
Treasury yields declined across the curve in August, apart from the 30-year, which finished three basis points above July’s level at 4.92%. The 2-year fell from 3.94% to 3.59%, the month’s most significant drop of 35 basis points, and the 3-year dropped to 3.58%, as markets increasingly priced in Fed rate cuts.
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