Decoding Jackson Hole... A few magic words from Jerome Powell... Banking on rate cuts... The Fed won't 'make up' for low inflation anymore... Oh, the irony... The robots are coming... Go for a test drive...
The lame duck spoke...
Federal Reserve Chair Jerome Powell may be the lamest duck around... given the nearly full year of notice President Donald Trump has given him that he won't be coming back as the head of the central bank once his term ends in May 2026.
But like we said on Thursday, Powell can still have influence. And on Friday, he gave what will likely be his final speech at the annual confab of central banks in Jackson Hole, Wyoming.
Powell said a few magic words that directly juiced the major U.S. stock indexes. The small-cap Russell 2000 Index closed Friday 3.9% higher, the Dow Jones Industrial Average gained 1.9%, and the benchmark S&P 500 and Nasdaq Composite indexes were up about 1.5%.
It was an "everything was up" day, and many Stansberry Research editors' open recommendations made new 52-week highs (as you can see in today's list near our mailbag below).
Here's what the market heard...
All it took was for Powell to say this sentence...
With policy in restrictive territory, the baseline outlook and the shifting balance of risks may warrant adjusting our policy stance.
The "may warrant adjusting" is the key phrase, and it came in the context of the weakening labor market becoming increasingly more important for the Fed to address than inflation – even with uncertainties about tariffs' influence on price increases.
Enough folks in the market took this phrase to mean that lower interest rates are on the way.
Coming into the speech, I (Corey McLaughlin) noted that the prevailing expectations were for the Fed to cut rates at its meeting next month. But we didn't think it would be a "given" with mixed inflation data and an unemployment rate still relatively low at 4.2%.
As we wrote on Thursday...
If Powell suggests precisely this [a rate cut isn't a given], the realization among a wider audience could shake up the market even more than the slight downturn we've seen over the past week. On the other hand, greater belief in lower rates ahead could juice stock prices higher.
The market now strongly believes that "cheaper" dollars are on the way, with federal-funds futures traders' bets putting an 84% probability on a lower rate next month. That's slightly higher than a week ago and significantly higher than a month ago (62%).
The 'goalposts' are also moving back...
Powell spent the first half of his speech talking about current and future monetary policy. Then he delivered the results of the central bank's update to its "framework" review of its basic policy guidelines.
The biggest news was that five years after changing language to allow for "flexible average inflation targeting" – meaning inflation above 2% – the Fed is going back to what it had before, simply "flexible inflation targeting" with the goal of 2% inflation.
As the Wall Street Journal put it on Friday...
The framework emerges from the Fed's periodic review of its basic policy assumptions and guidelines. The 2020 language was among the most poorly timed in the history of U.S. monetary policy. It came amid the pandemic lockdowns and shortly before what would become the worst burst of inflation since the 1970s.
In 2020, we warned about the risks of the Fed making adjustments to not just allow, but seek, inflation to run "hot," since we were amid the early and uncertain days of the pandemic and a massive policy response from the U.S. government. From the August 27, 2020 Digest...
Today, the Federal Reserve 'moved the goalposts,' so to speak...
If you read nothing else of this Digest, just know what Fed Chair Jerome Powell essentially told the world today...
The Fed will let inflation run higher than normal until the economy gets well back on track.
To which we say... Prepare and invest accordingly, if you haven't already...
The central bank is willing to turn up the heat on the stove, keep interest rates low to encourage borrowing, and let inflation run higher... even if or when employment gets back to full levels.
That's precisely what happened... inflation reached a 40-year high.
We hope you were prepared. In that same issue, we talked about how to prepare for rising inflation and a weakening dollar over the long run. We pointed folks toward gold and stocks because "the backdrop for a Fed-juiced economy [was] set."
We all remember the speculative frenzy we saw in 2021... to the point where Dumb Money became a movie about the height of the mania. This was followed by a bear market when interest rates had nowhere to go but higher in the face of record-high inflation.
And then a "nobody believes it" bull market began in late 2022, with people rightfully concerned about inflation and the risks of a recession that may or may not have happened, depending on your definition of a recession.
So the Fed has now formally changed its inflation targeting policy back to pre-summer of 2020 language. As Powell said Friday, the Fed is eliminating its "makeup" inflation strategy...
As it turned out, the idea of an intentional, moderate inflation overshoot had proved irrelevant. There was nothing intentional or moderate about the inflation that arrived a few months after we announced our 2020 changes to the consensus statement...
This is one of those things that will go down as a footnote in history... but is much more important than it might appear. And the market thinks the Fed is going to do something similar again by cutting rates sometime soon.
That may have juiced stocks in the very short term and could do so over the intermediate too. But don't forget the consequences... like the long-term erosion of the value of the U.S. dollar. Because the Fed certainly isn't going to save you from it. It's up to you to protect your wealth from inflation.
We like the setup for gold once again. Our colleague and DailyWealth Trader editor Chris Igou does too. Subscribers can see his case here.
And you won't go wrong owning shares of high-quality, cash-gushing businesses that can make the most of the dollars they bring in, no matter what they're worth compared with the past.
What to look for this week...
The S&P 500 was slightly lower today, but they could be due for some volatility later this week.
Most notably, Nvidia (NVDA) reports earnings after Wednesday's close. Investors will be looking at the performance of the $4.4 trillion company to gauge where we might be in the life cycle of the artificial-intelligence ("AI") boom.
Judging from what the company announced today, we might be earlier in this cycle than you think...
Nvidia said it will be selling what it calls a robot brain for $3,499 as part of a developer kit that will allow customers to more easily create robots. The new Jetson AGX Thor robotics chip module has 7.5 times the AI capability of its predecessor.
Per an Nvidia press release earlier today...
Robots around the world are about to get a lot smarter as physical AI developers plug in NVIDIA Jetson Thor modules – new robotics computers that can serve as the brains for robotic systems across research and industry...
This performance leap will enable roboticists to process high-speed sensor data and perform visual reasoning at the edge – workflows that were previously too slow to run in dynamic real-world environments. This opens new possibilities for multimodal AI applications such as humanoid robotics.
This all reminds me of our Stansberry Venture Technology editor Dave Lashmet's issue way back in 2016 on the "artificial brains" that would be coming from a relatively little-known company called Nvidia.
Back then, the company was mostly noted for its growth in the gaming sector – and it traded for a split-adjusted $1.14 per share. As Dave wrote...
Although Nvidia is a well-known tech company, nobody on Wall Street is betting on artificial brains as a business segment.
Today, Nvidia shares gained more than 1% and traded near an all-time high around $181.
Moving on from humanoid robots, we have another exciting event to tell you about...
Tomorrow morning, our friend Marc Chaikin, the founder of our corporate affiliate Chaikin Analytics, is going live with a brand-new "Ask Me Anything" event.
Marc has already received more than 1,000 questions, and he'll be addressing his followers' most pressing concerns. He'll also share his outlook on today's market and where things might be headed from here. We suggest you tune in.
As Dr. David "Doc" Eifrig wrote just the other day...
My friend Marc Chaikin spent 50 years on Wall Street. In that time, he created proprietary stock indicators – like the industry-standard "Chaikin Money Flow" – that are used by the biggest hedge funds, investment banks, and other institutional traders all over the world today.
Then, after seeing the fallout from the great financial crisis and that individual investors were often the ones who lost the most, Marc decided to help teach normal folks how to do as well as the "pros" on Wall Street. He founded Chaikin Analytics and developed his Power Gauge system to give the "little guys" a fighting chance.
Marc's free event is open to everyone tomorrow, and you'll hear about a chance to test-drive each of Marc's elite research services. You can check it out starting at 10 a.m. Eastern time. Just register here to secure your spot.
In the latest This Week on Wall Street, Matt Weinschenk breaks down what the recent AI sell-off really means for your money, why big names like Nvidia, Palantir Technologies (PLTR), Intel (INTC), and Broadcom (AVGO) took a hit, and how smart investors can still profit from this market shift...
Watch the video on our YouTube page, and be sure to like and subscribe to get more of our free video content.
New 52-week highs (as of 8/22/25): ABB (ABBNY), Agnico Eagle Mines (AEM), Allegion (ALLE), Barrick Mining (B), Alpha Architect 1-3 Month Box Fund (BOXX), WisdomTree Japan SmallCap Dividend Fund (DFJ), Dimensional International Small Cap Value Fund (DISV), DXP Enterprises (DXPE), Equinox Gold (EQX), iShares Ethereum Trust Fund (ETHA), iShares MSCI Italy Fund (EWI), iShares MSCI Spain Fund (EWP), FirstCash (FCFS), SPDR Euro STOXX 50 Fund (FEZ), Franklin FTSE Japan Fund (FLJP), Franco-Nevada (FNV), Cambria Foreign Shareholder Yield Fund (FYLD), VanEck Gold Miners Fund (GDX), VanEck Junior Gold Miners Fund (GDXJ), Houlihan Lokey (HLI), iShares Convertible Bond Fund (ICVT), iRhythm Technologies (IRTC), Kinross Gold (KGC), Newmont (NEM), New Gold (NGD), OR Royalties (OR), Ormat Technologies (ORA), Pan American Silver (PAAS), Invesco WilderHill Clean Energy Fund (PBW), Ryder System (R), Rithm Capital (RITM), ResMed (RMD), Construction Partners (ROAD), Sandstorm Gold (SAND), SSR Mining (SSRM), United States Commodity Index Fund (USCI), Vanguard FTSE Europe Fund (VGK), Telefônica Brasil (VIV), Vanguard S&P 500 Fund (VOO), and Vanguard Short-Term Inflation-Protected Securities (VTIP).
In today's mailbag, feedback on Dan Ferris' latest Friday essay and the new issue of The Ferris Report... Do you have a comment or question? As always, e-mail us at feedback@stansberryresearch.com.
"Hello Dan and team! I so look forward to the report each week. Once again you didn't disappoint. Great research, history, analysis and interesting reading. One day last week the 'market' was down, and my portfolio was up. I have a friend who always asks me, 'Did you see the market today?' My answer is always the same. I don't care. I own individual stocks (and Mr. DiBiase's bond choices)." – "Happy and informed" Alliance member Jeffrey G.
"Hello Stansberry Research, Would like you to pass on a word of thanks to Dan Ferris for his latest insightful report. The finance history lesson was invaluable. It captured modern finance theory all in one place. I believe the advice will prove to be more than invaluable for me.
"I intend to make some adjustments to my portfolio (small) right away. Heck, I've already implemented some of his suggestions and they have proven to be successful. So, good investing, and please keep it coming. Thank you." – Subscriber Debbie B.
All the best,
Corey McLaughlin
Baltimore, Maryland
August 25, 2025
