Wall Street Sees Gains Amid Anticipation of Powell’s Speech
(Reuters) – Major stock indices on Wall Street rose on Friday, recovering from earlier losses as investors looked forward to insights from US Federal Reserve Chair Jerome Powell’s upcoming speech at the Jackson Hole Symposium regarding interest rates.
Powell is scheduled to speak at 10 AM ET, and many believe his remarks could significantly influence expectations for possible rate cuts in September.
Michael Matoussk, who leads trading at US global investors, suggested that Powell will adopt a cautious stance. He indicated that tariffs are becoming a pressing issue, noting, “He wants to evaluate the data since the effects from tariffs have only started to show since early summer.”
After a disappointing payroll report earlier in August, market optimism initially grew, fueled by consumer price data indicating minimal upward pressure from tariffs.
CME FedWatch tools now indicate that traders see a 69.5% chance of a 25 basis point rate hike next month, down from an 85.4% likelihood just a week ago.
Out of the 11 sectors of the S&P 500, ten recorded an uptick, with healthcare and real estate stocks leading the charge.
At 9:32 AM ET, the Dow Jones industrial average had risen by 283.69 points (0.63%) to reach 45,069.19, while the S&P 500 gained 21.68 points (0.34%) to settle at 6,391.85. The NASDAQ Composite increased by 18.77 points, or 0.09%, bringing it to 21,119.08.
Despite the day’s upticks, the S&P 500 is set to interrupt its five-day winning streak, largely due to significant sell-offs in major technology stocks this week.
Early week losses among large tech companies have put the S&P 500 and NASDAQ on track for weekly declines.
This week, information technology seems likely to be the weakest sector, while energy and real estate appear to be heading for modest gains.
In other news, UBS Global Wealth Management has increased its year-end target for the S&P 500 for the second time in just two months, citing stronger corporate revenues and a reduction in trade tensions alongside expectations for interest rate cuts.
In notable market movements, Nvidia saw a 2% drop after it was reported that the chipmaker had asked Foxconn to halt work on the H20 AI chip.
On a positive note, Google’s parent company Alphabet gained 1.8%, buoyed by the announcement of a $10 billion investment in its metaverse platform and six years’ worth of cloud computing deals. Meanwhile, Meta stocks remained unchanged.
However, Turbotax-maker Intuit fell by 6.9% after it projected first-quarter revenue growth that fell short of analyst expectations due to underperformance in its MailChimp marketing platform.
Workday also experienced a 4.5% decrease after HR software providers presented a cautious outlook for the current quarter.
Overall market breadth showed a positive trend, with the NYSE reporting a ratio of 4.86 to 1 in favor of advancing stocks, and NASDAQ at 2.35 to 1.
The S&P 500 saw seven new 52-week highs and some new lows, while the NASDAQ composite recorded 35 new highs against 18 new lows.
