With little homegrown action in the last days of August, Wall Street is trading on what it thinks might happen next month.
September starts with a bang the day after the Labor Day holiday, with August's jobs data looming at the end of next week. But a key to what's been working on markets in the last several days is Europe. The European Central Bank meets Sept. 4, and speculation is high that it will take further steps to ease policy after ECB President Mario Draghi hinted on policy action in a speech in Jackson Hole last Friday.
That has lifted European stocks, suppressed the euro and driven down sovereign yields. Short-end yields are now negative in five European countries. Meanwhile, U.S. stocks pushed higher Tuesday with the S&P 500 closing above 2,000 for the first time, following a seven-year high in consumer confidence and a durable goods number that was strong, though distorted by large aircraft orders. The durable goods report did add another 0.3 to tracking GDP, taking it to a median of 3.2 percent for the third quarter, according to a CNBC/Moody's Analytics snap survey.