Investors turned cautious as major stock indexes traded sideways on Monday, hovering near key levels amid anticipation of key political developments and the upcoming Jackson Hole Economic Symposium [1]. With geopolitical tensions escalating, the market was closely watching for updates from Ukrainian President Volodymyr Zelensky’s visit to the White House following U.S. President Donald Trump’s recent meeting with Russian President Vladimir Putin [1]. As political dialogues unfolded, traders also braced for the Federal Reserve’s policy signals, particularly the potential for a rate cut in September [2].

The session reflected a lack of conviction, with market participants reluctant to commit to directional bets ahead of what could be a volatile week [1]. The S&P 500 had historically seen a modest boost following Fed Chair Jerome Powell’s Jackson Hole speech, with a median increase of 0.4% on the day of his address between 2018 and 2024 [2]. However, the 2022 exception, when the index fell 3% the day after a more hawkish tone from Powell, underscored the volatility associated with the event [2]. This year, the Fed has held rates steady, citing the need to monitor inflationary pressures, particularly from tariffs and the recent 0.9% rise in the producer price index in July — the largest increase in over three years [2].

The Jackson Hole symposium, scheduled for August 21–23, is expected to provide clarity on the Fed’s stance amid mixed inflation data [2]. Analysts suggested that the central bank may adopt a more accommodative tone, with markets currently pricing in an 83% chance of a 25 basis point rate cut in September [2]. However, this has fallen slightly from a peak of 86% a week earlier, indicating some uncertainty as investors await Powell’s speech on Friday [2].

Geopolitical developments also played a role in shaping market sentiment. Trump indicated he could facilitate a meeting between Putin and Zelensky, a possibility that Zelensky left open as he expressed a desire for a diplomatic resolution to the conflict [2]. A potential ceasefire could ease tensions, but it also introduces uncertainty for assets like gold, which typically benefit from geopolitical risk [1]. Gold prices remained in a narrow range near $3,333.06 an ounce, reflecting cautious positioning as traders waited for further clarity from both the Fed and the evolving political landscape [1].

Equities showed a mixed picture, with the Dow projected to trade sideways to higher, offering potential buying opportunities in the near term [8]. Meanwhile, the peso and the Australian dollar reflected caution as investors sought signals from the Jackson Hole event to determine the direction of monetary policy [7]. The U.S. dollar index also held steady, with the Bloomberg Dollar Spot Index rising 0.2% as of noon in New York [1].

As Powell prepares to address the Fed’s policy outlook, investors are keenly watching for any nuanced shifts in tone that could influence global markets. A dovish message could reinforce expectations for a September rate cut, while a more hawkish stance might prompt a reevaluation of market positioning [2]. The week ahead promises to be event-driven, with the Fed’s minutes from its July meeting and earnings reports from major retailers adding to the mix [2].

Sources:

[1] Gold Wavers as Traders Look to Jackson Hole and Ukraine (https://finance.yahoo.com/news/gold-edges-traders-look-jackson-114240407.html)

[2] Market Rally Is Built on AI Stilts — Jackson Hole Could Test (https://www.investing.com/analysis/market-rally-is-built-on-ai-stilts–jackson-hole-could-test-the-foundation-200665427)

[5] Gold Edges Up Ahead of Trump-Zelensky Talks, US Dollar Holds Steady (https://www.investing.com/analysis/gold-edges-up-ahead-of-trumpzelensky-talks-us-dollar-holds-steady-200665454)

[7] Peso Climbs as Markets Await Fed Policy Clues (https://www.bworldonline.com/banking-finance/2025/08/19/692311/peso-climbs-as-markets-await-fed-policy-clues/)

[8] Markets Focus on Geopolitical Shifts as Powell’s Jackson (https://www.fastbull.com/news-detail/markets-focus-on-geopolitical-shifts-as-powells-jackson-4340045_0)