U.S. stocks experienced mostly modest changes on August 18th, driven by rising consumption rates amid growing expectations for Federal Reserve cuts in September.
Lower interest rates could ease borrowing costs, potentially boosting the economy.
With that in mind, investors will be keenly observing comments from Fed Chairman Jerome Powell during the upcoming Jackson Hole Economic Symposium for global financial leaders. He may provide insights on how tariffs are affecting the economy before any rate adjustments are made.
Michael Ferroli, the chief U.S. economist at JP Morgan, mentioned, “Powell’s comments on the policy outlook for next week could reference the less-than-ideal job reports from July, highlighting some balance in employment risks.” Although some Fed officials haven’t recently favored rate cuts, there’s a sense that ongoing employment data will shape Powell’s approach at the next meeting.
Tracking the market expectations for interest rate movements, the CME FedWatch Tool indicated an increased likelihood—over 90%—that the Fed might ease rates at the next meeting, a number that has since settled closer to 83%.
Prior to Powell’s speech, investors will also have access to insights from the last Fed meeting, where notable dissent emerged. Governors Christopher Waller and Michelle Bowman expressed opposition to the decision to keep rates between 4.25% and 4.50%, marking a rare incident of such disagreement since 1993.
As of 9:34 AM (ET), the Blue Chip Dow held steady, gaining 0.8 points to reach 44,946.92. The broader S&P 500 saw a slight increase of 0.01%, or 0.84 points, at 6,450.64. Meanwhile, the tech-heavy Nasdaq rose by 0.07%, or 14.778 points, to settle at 21,637.755. The yield on the benchmark 10-year Treasury fell to 4.316%.
Retail Results Expected
This week, major retailers like Walmart, Target, Home Depot, and Lowe’s are set to report their revenues. Their performance could shed light on the effects of tariffs and overall consumer health.
Of the over 92% of S&P 500 companies that have reported this quarter, around 82% exceeded Wall Street expectations, according to FactSet.
Corporate Updates
- Dayforce has been acquired by private equity firm Thoma Bravo, causing its stock to surge by nearly 24%.
- Soho House reached an agreement with investors from MCR Hotel to go private in a deal worth $2.7 billion, with shares rising by 16.1%.
- Tesla is reportedly offering significant discounts on rental vehicles in the UK due to lackluster sales, as mentioned byThe Times.
- Novo Nordisk’s Wegovy, an obesity medication, received expedited FDA approval for treating serious liver disease, leading to a 5.06% rise in stock value.
- Terawulf, an AI computing and Bitcoin mining company, saw its shares boosted by an additional $1.4 billion investment from Alphabet’s Google, raising its total valuation to around $3.2 billion and prompting a 14.83% increase in stock price.
Cryptocurrency News
According to Michael Saylor, executive chairman of MicroStrategy, the company has expanded its Bitcoin holdings, acquiring an additional 430 Bitcoins for $51.4 million, bringing its total to 629,376 Bitcoins.
Recently, Bitcoin experienced a decline, dropping by 1.48% to $115,759.70.
This story has been updated with the latest information.
