Major U.S. stock indexes fell on Thursday, with losses deepening ahead of Federal Reserve Chairman Jerome Powell’s speech on monetary policy at the central bank’s Jackson Hole Economic Symposium.
Nasdaq Composite Index (Compound: Indian) -1.2%Standard & Poor’s 500 Index (SP500)) He was -0.7%and the Dow Jones Industrial Average (DJI) -0.6%with losses accelerating in afternoon trading. Wall Street’s main volatility gauge (Volatility Index (VIX)jump +8%. The Volatility Index (VIX) earlier rose about 9%, then pared gains before rising again.
Eight of the 11 sectors in the S&P 500 Index declined, with information technology (XLK) losing nearly -2%. Energy (XLE) led the advancers and was slightly higher.
Investors are bracing for what Powell might signal about starting to cut interest rates in September when he speaks on Friday at the Fed’s meeting in Jackson Hole, Wyoming, which begins on Thursday. Traders widely expect the central bank to start cutting its benchmark interest rate to 5.5% from 5.25%.
Standard Chartered said the Fed’s dovish July meeting minutes opened the door to a 50 basis point interest rate cut. Major stock indexes ended higher on Wednesday after minutes from the Federal Reserve’s July meeting suggested policymakers were on track to start cutting interest rates within weeks.
Rabobank said Powell is likely to signal a 25 basis point rate cut next month. “The recent deterioration in economic data has increased our confidence that the U.S. economy is sliding into recession or at least into a significant slowdown in the second half of the year,” Rabobank’s chief U.S. strategist Philippe Marie said in a note on Wednesday.
Initial jobless claims have recently eased recession fears in the stock market. On Thursday, initial jobless claims for the week ended Aug. 17 rose less than expected, by 4,000 to 232,000, compared with expectations of 234,000.
In the bond market, the yield on the US 10-year Treasury note (US10Y) rose 6 basis points to 3.87% as prices fell. The yield on the US 2-year Treasury note (US2Y) rose 7 basis points to 4.02%.
Among other economic indicators, the US composite PMI slowed in August, but still beat consensus estimates at 54.1.
Existing home sales rose 1.3% month-over-month in July to a seasonally adjusted annual rate of 3.95 million, versus consensus estimates of 3.900 million.
Among the individual stocks, Snowflake (SNOW) -13% Analysts remain cautious after the cloud computing company’s Q2 FY25 results beat estimates.
Zoom (ZM) +13% Following the video communications software company’s better-than-expected second-quarter results and outlook.