On Thursday night, U.S. stock futures showed little change as investors prepared for an important speech by Federal Reserve Chair Jerome Powell at the annual economic symposium in Jackson Hole, Wyoming, scheduled for Friday. Market participants are eager to gain insights into the future trajectory of monetary policy.
The Dow Jones Industrial Average futures rose by 50 points, reflecting a 0.1% increase. Similarly, both the S&P 500 futures and Nasdaq 100 futures also gained approximately 0.1%. However, not all stocks performed well during after-hours trading, as shares of Intuit fell nearly 6% despite the company's fiscal fourth-quarter results surpassing Wall Street's expectations.
In contrast, Zoom Communications experienced a notable 5% increase in its stock price following the release of second-quarter results that exceeded expectations. This highlights the ongoing volatility in the market, as investors react to corporate earnings amidst broader economic concerns.
Wall Street recently endured a challenging session, with the S&P 500 declining for the fifth consecutive day. The broad-market index fell by 0.4%, while the Nasdaq Composite experienced a 0.34% decrease. The Dow Jones Industrial Average also faced a setback, dropping 152.81 points, or 0.34%.
As investors await Powell's speech, there is a growing focus on the outlook for interest rates. Currently, markets are pricing in a 75% probability of a quarter-point rate cut during the upcoming September meeting, according to the CME FedWatch tool. The recent possibility of lower interest rates has invigorated segments of the market that have lagged behind this year’s rally, prompting investors to shift from megacap tech stocks to small-cap and value investments.
However, a more hawkish stance from Powell could dampen market enthusiasm. In his highly anticipated address, Powell is expected to outline a forward path for monetary policy, balancing the dual mandates of the Federal Reserve. Jim Caron from Morgan Stanley Investment Management articulated on CNBC's Closing Bell that he believes Powell will provide an explanation and justification for initiating interest rate cuts starting in September, which could be supportive for the markets.
As of Thursday's close, all three major U.S. stock indexes are on track for a losing week. The S&P 500 is down 1.2% week-to-date, while the Nasdaq has seen a more significant decline of 2.4%. The 30-stock Dow is also projected to experience a roughly 0.4% slide.
In summary, investors are navigating a complex landscape as they await crucial insights from Jerome Powell's speech at Jackson Hole. The implications of his address could significantly influence the stock market outlook in the near term.
