Last week, equity markets experienced modest declines as midweek gains were offset by a Friday sell-off ahead of the Labor Day weekend. The S&P 500 briefly reached a new all-time high Thursday before slipping back below. AI remained a dominant market driver, with NVIDIA’s earnings drawing significant attention. Its muted stock reaction highlighted the challenge of lofty expectations. Economic data was generally positive, including an upward revision to Q2 GDP growth and resilient consumer spending. However, inflation ticked higher, with core PCE rising to 2.9%. Expectations for a September rate cut from the Federal Reserve continue to grow. Market breadth improved across large and small cap stocks (measured by stocks trading above their 200-day moving averages), suggesting healthy underlying sentiment. Market history suggests we may experience seasonal volatility risks in September and October; however, fundamentals remain supportive so this could create opportunities to strategically rebalance across asset classes.