In midday trading on Thursday, stocks experienced a downturn as market participants braced for the highly anticipated speech from Federal Reserve Chair Jerome Powell scheduled for tomorrow. The Dow Jones Industrial Average (DJI), S&P 500 (SPX), and the tech-heavy Nasdaq Composite (IXIC) each fell approximately 0.5%. This decline comes as the benchmark S&P 500 index entered today’s session on a four-day losing streak, primarily driven by a drop in technology sector stocks, following a series of record highs in recent weeks.
Market participants were closely monitoring a selection of economic reports released this morning. However, the main focus is on the Jackson Hole Economic Policy Symposium, an important gathering of central bankers from around the world that officially kicks off today. Several Federal Reserve officials are scheduled to speak, but investors are particularly anxious to hear Powell’s insights tomorrow morning.
During his upcoming speech, Powell is expected to provide his assessment of the current economy and its implications for interest rates, especially as markets are pricing in the possibility of the Fed initiating rate cuts at the next policy meeting in September. After the Fed opted to maintain rates in July, Powell emphasized the need for more data on how tariffs impact the economy, particularly regarding inflation, before making any policy adjustments.
If Powell maintains his cautious stance without indicating that rate cuts are on the horizon, it could lead to disappointment among investors.
Among the noteworthy stocks experiencing movement on Thursday, Walmart (WMT) saw a significant drop of 4%, leading the decliners in the Dow, after reporting earnings that fell short of expectations while simultaneously raising its outlook for the full year. This slump in Walmart shares capped off a busy week of earnings reports from several major retailers, including Home Depot (HD), Target (TGT), and TJ Maxx parent company TJX Cos. (TJX).
Shares of major technology companies also faced pressure today. Stocks of Amazon (AMZN), Meta Platforms (META), Broadcom (AVGO), and Tesla (TSLA) each declined by approximately 1%. Additionally, Nvidia (NVDA) and Apple (AAPL) also lost ground, while Microsoft (MSFT) and Alphabet (GOOG) saw slight gains.
Shares of Palantir (PLTR), the AI data analytics software company popular among retail investors, dropped 0.3% after experiencing six consecutive days of declines, resulting in a total decrease of 16% from the record high achieved the previous week. Semiconductor companies Intel (INTC), Advanced Micro Devices (AMD), and Qualcomm (QCOM) also faced declines of about 1%.
In the cryptocurrency market, Bitcoin was recently trading at $112,800, down from an overnight high of $114,800. The digital currency had reached an all-time high of $124,500 just a week ago, but it has since fallen sharply as market participants reassess their expectations regarding Fed rate cuts following a concerning inflation report.
The yield on the 10-year Treasury, which influences borrowing costs for a wide range of consumer and business loans, stood at 4.34%, up from 4.30% at the previous day’s close. This yield had dropped to as low as 4.20% last week before the disappointing inflation report emerged.
The U.S. dollar index, which measures the dollar's performance against a basket of foreign currencies, increased by 0.4% to 98.60. Meanwhile, West Texas Intermediate futures, the U.S. crude oil benchmark, rose 0.6% to $63.05, marking a second consecutive day of gains after falling to their lowest levels since early June earlier this week. In contrast, gold futures remained relatively stable, trading around $3,390 an ounce.
