The three-day Jackson Hole symposium that kicks off on Thursday should push traders to the sidelines as they plot their next moves.
U.S. stock futures point to a modestly lower opening by Wall Street shares on Wednesday as traders look forward to more clarity on the rate outlook.
That said, the three-day Jackson Hole symposium that kicks off on Thursday should push traders to the sidelines as they plot their next moves. Fed Chair Jerome Powell is set to speak at the seminar on Friday.
Fund manager Louis Navellier said, “Since Powell is a lame duck, he will be less influential than in past years,” referring to the end of his term as the Fed chief in May. That said, the fund manager expects the market to be in a holding pattern until it sees off the symposium.
As of 3:50 a.m. ET, the Nasdaq futures fell 0.29%, the S&P 500 and Dow futures slipped over 0.15% each, and the Russell 2000 futures lost 0.18%.
On Tuesday, tech stocks experienced a rout amid fears that the mega-cap rally that has lifted the market for much of the current bull run that started in late 2022 would fizzle out once the central bank begins to cut rates. With industry experts and analysts warning about an artificial intelligence (AI) bubble building, traders sold off AI bellwethers such as Nvidia (NVDA) and Palantir (PLTR).
The S&P 500 ended lower for a third straight session. Among the S&P 500 sector classes, IT and communication services stocks fell sharply, and energy and consumer discretionary stocks saw more modest weakness. Substantial gains in defensives such as real estate, utilities, and consumer staple stocks helped offset some of the weakness.
The Invesco QQQ Trust (QQQ), an exchange-traded fund (ETF) that tracks the Nasdaq 100 Index, slumped 1.36% and the SPDR S&P 500 ETF (SPY) fell 0.54%. While the SPDR Dow Jones Industrial Average ETF Trust (DIA) edged up 0.05%, the iShares Russell 2000 ETF (IWM) slipped 0.77%.
Fed Governor Christopher Waller is scheduled to speak at 11 a.m. ET, followed by Atlanta Fed President Raphael Bostic at 3 p.m. ET.
At 2 p.m. ET, the central bank is scheduled to release the minutes of the July Federal Open Market Committee meeting, in which the Fed officials decided to keep the Fed funds rate unchanged. However, there were two dissenters and an absentee.
Analog Devices (ADI), Baidu (BIDU), Estee Lauder (EL), Lowe’s (LOW), Target (TGT), TJX (TJX) and Nordson (NDSN) are among the noteworthy names reporting on Wednesday.
Crude oil futures rallied early Wednesday amid supply concerns, and gold futures rebounded from Tuesday’s drop. The greenback firmed up against most currencies, except the yen and the pound.
The 10-year U.S. Treasury note reversed course after falling nearly four basis points on Tuesday.
The major Asian markets ended mixed on Wednesday, with the Japanese market retreating on the yen strength and weak export data for July. Tech-heavy South Korean and Taiwanese markets also fell sharply, while most others advanced. The Reserve Bank of New Zealand’s rate cut sent stocks in the domestic market sharply higher.
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