There are plenty of new developments ahead in the markets this week, which could result in additional volatility. Most notably, the Federal Reserve is poised to announce updates to its interest rate policy amid heightening inflationary concerns.
1. Oil Price Surge
Oil prices have increased strongly this month due to rising tensions in the Middle East. Traffic in the Strait of Hormuz has continued to stall, and the Houthis recently gained control of the Port of Mocha in Yemen.1
The price of crude oil topped $100/barrel last week, and could move higher if supply-side shocks continue in the markets this week.2
The Vanguard Energy ETF (VDE), which has rallied around 46% YTD, could experience additional volatility this week amid new geopolitical developments.
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2. US Rate Decision
One of the most important events in the markets this week will likely be the Federal Reserve’s decision on interest rates. The Federal Reserve will make this decision on Wednesday at 2 p.m ET.
Inflation remained unchanged at 3.4% last month, but the Federal Reserve will also have to consider the impact of recent energy price shocks.3
The recent Jobs report was also very strong, which may also put pressure on the Fed to hike rates, especially if inflation looks like it will increase in September and subsequent months.4
Sectors like technology could be some of the top market movers this week if there are meaningful policy updates.
3. Global Macro Updates
This week will also be very eventful in other global markets, as many Central Banks will make interest rate policy decisions.5
The Bank of England and Bank of Japan will also make new interest rate policy decisions on Thursday and Friday, respectively.
Investors will likely be closely following all of these developments, as a massive push for rate hikes could spark concerns about the Federal Reserve’s success in keeping inflation in check. Moreover, widespread rate hikes could also result in slower global growth projections.
The latest projections from the International Monetary Fund (IMF) are calling for 3% global growth, but lingering economic and political risks could result in growth downgrades and other economic shocks.6
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4. Retail Sales
Investors should also be on the lookout for new U.S. retail sales data, which will be released on Wednesday at 8:30 a.m ET.
Last month’s report was a bit concerning, as retail sales dipped following stronger performance in May and June.7
Inflation has lingered at 3.4% in recent months, and any additional energy price shocks would weaken consumer sentiment in subsequent months.
The VanEck Retail ETF (RTH) has pulled back by nearly 7% in the past month on the back of these broader macro fears.
5. Real Estate Data
The real estate industry will also have a lot of exciting news released this week. The Pending Home Sales Index will be released on Thursday at 10:00 a.m ET, and Housing Starts data will also be released on Thursday at 8:30 a.m ET.
Investors should continue to monitor the recent industry cooldown, as home sales recently fell by 2% in August.8
Moreover, the upcoming interest rate decision from the Federal Reserve this week could also strongly impact the real estate industry. The average mortgage rate in the United States recently rose to 6.85%, the highest rate since June 2025.9
Keep an eye on leading real estate ETFs, such as the iShares US Real Estate ETF (IYR) and the Vanguard Real Estate ETF (VNQ).
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