Small‑cap and cyclical stocks took the spotlight, China’s equity rally outpaced global peers, and Wall Street remained optimistic on September rate‑cut odds, despite a few concerns on the regulatory and geopolitical front.

August ended with surprising strength from small‑caps and cyclicals. The Russell 2000 surged over 7.3%, driven by materials (+5.6%), consumer discretionary (+4.3%), and financials (+2.6%), all outperforming tech, which lagged behind at just +1.3%. Broad market momentum supported the longest winning streak for the equal‑weight S&P 500 in years, signaling that gains are spreading beyond megacaps.

Overseas, China’s CSI 300 index impressed, up 14.3% year‑to‑date. A combination of easing trade tensions, low domestic rates, and strong participation from local investors (margin trading up nearly 19%) helped A‑shares outperform their U.S. and global counterparts.

Markets are still rallying on expectations for a September Fed rate cut. Futures show an 85% likelihood, bolstered by cooling job data and soft inflation. Fed Chair Powell's comments have kept hopes intact, and history suggests that rate‑cut delays often fuel further upside in equities.

Today’s theme? A shift toward wider market participation and global strength, not just tech dominance. China’s rally adds international fuel, while the Fed rate-cut narrative continues to pull markets higher. Stay alert, September could bring fireworks as data and policy collide.