Big Tech Leads Stocks Higher Before Jackson Hole: Markets Wrap
Tech megacaps outpaced the broader stock market, with traders awaiting Jerome Powell’s speech on Friday for clues on how hawkish the Federal Reserve will be in the face of mounting economic challenges.
Treasury 10-year yields traded above 3%, while the dollar fluctuated.
There’s been no shortage of hawkish Fedspeak in the weeks leading up to the prestigious Jackson Hole, Wyoming annual event that will be attended by policy makers from around the world. The latest such remarks came from Fed Bank of Minneapolis President Neel Kashkari, who said Tuesday that it’s “very clear” that officials need to tighten policy to bring inflation back under control.
“It’s safe to assume one of Powell’s objectives will be to communicate that there remains work to be done to combat inflation and the hiking cycle isn’t nearing its end. At least not yet,” said Ian Lyngen, a strategist at BMO Capital Markets. “In keeping with this theme, Kashkari’s comment that it is ‘very clear’ the Fed needs to tighten monetary policy certainly resonates, and we expect this is just the beginning of a series of such official headlines.”
Economic reports have been mixed at best, underlining the delicate task policy makers face in bringing down high inflation without sparking a recession. Data Wednesday showed US pending home sales fell to the lowest since the start of the pandemic. While orders placed with US factories for core capital goods beat forecasts, the picture might change in the coming months amid higher borrowing costs and uncertainty about the growth outlook.
In corporate news, Peloton Interactive Inc. soared after saying it will sell bikes and certain accessories on Amazon.com Inc. in the US. Bed Bath & Beyond Inc. jumped after a report said that the home goods retailer has selected a lender to provide financing as it seeks to boost liquidity.
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What to watch this week:
- US GDP, initial jobless claims, Thursday
- Kansas City Fed hosts its annual economic policy symposium in Jackson Hole, Wyoming, Thursday
- ECB’s July minutes, Thursday
- Fed Chair Powell speaks at Jackson Hole, Friday
- US personal income, PCE deflator, University of Michigan consumer sentiment, Friday
Some of the main moves in markets:
- The S&P 500 rose 0.5% as of 11:23 a.m. New York time
- The Nasdaq 100 rose 0.6%
- The Dow Jones Industrial Average rose 0.4%
- The Stoxx Europe 600 rose 0.3%
- The MSCI World index rose 0.3%
- The Bloomberg Dollar Spot Index was little changed
- The euro was little changed at $0.9979
- The British pound fell 0.2% to $1.1811
- The Japanese yen was little changed at 136.84 per dollar
- The yield on 10-year Treasuries advanced five basis points to 3.10%
- Germany’s 10-year yield advanced four basis points to 1.36%
- Britain’s 10-year yield advanced 11 basis points to 2.69%
- West Texas Intermediate crude rose 0.1% to $93.84 a barrel
- Gold futures rose 0.3% to $1,766.70 an ounce
–With assistance from Andreea Papuc, Robert Brand and Vildana Hajric.