U.S. stock futures finally exhibit stability on Friday, poised for Federal Reserve Chair Jerome Powell’s eagerly anticipated address taking place in nearly five hours.
The Dow Jones Industrial Average futures (YM00, 0.23%) rose 62 points, or 0.2%, reaching 34202. Meanwhile, the S&P 500 futures (ES00, +0.22%) notched a gain of 6 points, or 0.1%, arriving at 4392. Conversely, Nasdaq 100 futures (NQ00, 0.12%) retreated by 5 points, or 0%, arriving at 14857.
Thursday saw significant setbacks: the Dow Jones Industrial Average (DJIA) plunging 374 points, or 1.08%, closing at 34099. Similarly, the S&P 500 (SPX) endured a decline of 60 points, or 1.35%, resting at 4376, and the Nasdaq Composite (COMP) plummeted 257 points, or 1.87%, to 13464.
Underlying Market Forces
The recent market tumult contrasts with the week’s overall upward trajectory of the S&P 500. Even Nvidia, the chipmaker, wrestled to maintain gains following robust financial results surpassing Wall Street expectations.
Bespoke Investment Group highlights the Nasdaq Composite’s struggle to rebound above its 50-day moving average since breaching that level a fortnight ago.
Technical complications aside, stock woes accompany bond sell-offs. The 10-year yield (BX:TMUBMUSD10Y) reached its sixth peak this year, reflecting the economy’s strong performance. This is coupled with diminished purchases from the Federal Reserve, Japan, and China for diverse reasons.
The Awaited Speech
All eyes now turn to Federal Reserve Chair Jerome Powell’s speech scheduled at 10:05 a.m. Eastern in Jackson Hole, Wyo. Powell’s tone has shifted from last year’s hawkish stance, expected to reflect a more balanced perspective.
Chief U.S. economist at SGH Macro Advisors, Timothy Duy, observes a change in sentiment due to evolving economic data. Boston Fed President Susan Collins echoes this sentiment, indicating the need for evidence of economic slowing before committing to inflation control.
“I don’t think the Fed was committed to an Oct/Nov rate hike at the July FOMC meeting, but that’s because it had a very pessimistic outlook for growth at that time. And I think participants were very confident in that outlook, but incoming data has shaken that confidence,” Duy said.
Simultaneously, European Central Bank President Christine Lagarde’s speech adds another layer of anticipation. Lagarde’s challenge lies in addressing sluggish Eurozone growth amid inflation concerns.
Jackson Hole Symposium: How Markets Have Responded to Powell’s Speeches Over Time - Investmentals
[…] the S&P 500 has generally returned 0.4% during the conference, according to Dow Jones Market Data. After the conference, the index typically gained 0.1% in the following […]