Stocks Tread Cautiously as Fed, Retail Earnings Loom Large

On August 18, 2025, US stock market futures are signaling a cautious start to the trading week, with the Dow, S&P 500, and Nasdaq all edging lower. The subdued open reflects the market's uncertainty as traders juggle a range of factors, including hopes for Federal Reserve rate cuts, concerns over retail earnings, and heightened geopolitical tensions.

The primary focus this week is on the Federal Reserve's annual Jackson Hole symposium, scheduled for August 21-23. Investors are eagerly awaiting signals from the central bank on the path of future interest rate decisions, with futures markets currently pricing in an 85% probability of a 25-basis-point cut in September. However, any hesitation from Fed Chair Jerome Powell could lead to a sharp repricing of risk assets.

Alongside the Fed, a string of retail earnings reports from giants like Walmart, Home Depot, and Target will provide crucial insights into the strength of the American consumer, which remains the backbone of the US economy. Analysts expect mixed results, with Walmart projected to post solid grocery sales but discretionary-heavy Target potentially showing a decline.

Adding to the market's unease are the geopolitical risks stemming from the scheduled meeting between President Donald Trump and Ukrainian President Volodymyr Zelenskyy in Washington. Any signs of escalation in the ongoing conflict near Kharkiv could pressure global trade flows and push investors toward safe-haven assets.

As the week unfolds, traders and investors will need to navigate this complex web of monetary policy, consumer data, and geopolitical developments, as volatility could surge midweek in response to the latest headlines from Wyoming and Washington.