CNBC Business News Update - Market Close: Stocks Rally, Investors Hear Fed Chair Leave Door Open To Rate Cuts, Mortgage Rates Fall 8/22/25

Episode Date: August 22, 2025

From Wall Street to Main Street, the latest on the markets and what it means for your money. Updated regularly on weekdays, featuring CNBC expert analysis and sound from top business newsmakers. Anchored by CNBC's Jessica Ettinger.

I'm Jessica Ettinger, CNBC. Wall Street opens Monday morning after a record-setting Friday for stocks. Investors thought they heard Fed Chair J. Powell hint. Interest rates could be cut next month. Some say they never heard that. Either way, investors heard something, and the Dow was up 846 points, 1.8%. It was led higher by shares of Caterpillar, which were up more than 4%. The S&P 500 Index was up 96.5. points, one and a half percent. The NASDAQ soared 396 points, 1.8%. InVIDIA shares were up 1.7% on Friday. Now, the Dow and the S&P 500 index each finished the week in the green. The NASDAQ still had a losing week,

but the Dow and the S&P 500 index also each hit fresh record highs on Friday. We got a very strong knot to September, and that is obviously a huge relief. Look, I'm not entirely surprised because it seemed like in and communication. You know, some of the Fed was emphasizing labor market weakness. And the statement from Fed Chair Powell was so strong is that we see more weakness. We're also expecting more weakness and it can develop quickly. Partners groups, Anastasia Omaroso on CNBC. The Fed chair, Jay Powell, in his speech at Jackson Hole, noted that inflation could go even higher. The labor market could get weaker. Here's a take from CNBC's Brian Sullivan. I mean, I read Powell's speech three times. Higher tariffs have begun to push up prices in some categories of goods.

We expect the effects of tariffs to accumulate over coming months with high uncertainty about timing and amounts. I could read this and actually make the case for a rate hike. I don't read the speech the same way the market appears to be. Do you? No, I don't either. But in a sense, in this case, I think the market views absence of bad news is good news. Powell did not come in and say anything explicitly about not cutting rates. The feeling the market has is the pressure on the Fed to cut rates is so strong that even if it's not the right thing to do, the Fed will actually cut rates.

That's NYU Finance Professor Oswath Demoderant on CNBC with CNBC's Brian Sullivan. Would-be homebuyers watched mortgage rates fall on Friday as stocks popped, but it may be a short-term drop. The average on the 30-year fixed fell to six-point. 5% according to Mortgage News Daily, and that is the lowest since last October. I would note, though, aside from today's quick reaction, if the Fed lowers rates in September, it doesn't necessarily mean that mortgage rates go down. That first big rate cut actually resulted in the opposite last September. That was after that 50 basis point cut in the Fed funds rate. Mortgage rates actually

moved a little higher at first and then really shot up later. There are just a lot of other things weighing on those longer-term rates. So even if we talk about the Fed lowering rates, we have to remember it doesn't always apply to mortgage rates. Intel shares were higher after the president posted that the struggling chipmaker agreed to sell a stake in the company to the U.S. government. Canada dropped some of its retaliatory tariffs on U.S. goods going north, hoping to spur along a trade deal with the U.S. that's been forcing Americans to pay more for goods they need from Canada, especially farmers, who are paying much more for fertilizer, which most most. mostly comes from Canada. On the coming week's watch list, one of the biggest vacation weeks of

the year looms ahead of the long Labor Day holiday weekend, according to consumer researcher AYTM, which says August is the third most popular month for vacations after July and June. Data coming this week include the latest on home prices and a new read on consumer confidence, which has been dropping. And we get earnings from a big name, Envidia, all in the coming week. Jessica Eddinger, CNBC. CNBC is the network for ambitious people.