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Indexes fell Thursday as investors wait for comments from Fed Chair Jerome Powell at Jackson Hole.
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Investors are longing for any indication of how steep cuts will probably be through the remaining of this 12 months.
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Traders also digested a slight uptick in jobless claims from last week, up 4,000 to 232,000.
Indexes ended lower Thursday as investors awaited comments from Federal Reserve Chair Jerome Powell on the Federal Reserve’s Jackson Hole conference on Friday.
The S&P 500 and the Dow Jones Industrial Average closed barely lower, though the Nasdaq Composite logged an even bigger drop of 1.6%. Treasury yields spiked, with the 10-year bond yield up eight basis points 3.863%
Investors are longing for any indication of how steep cuts will probably be, with markets pricing in 100% odds the Fed starts loosening monetary policy at next month’s FOMC meeting.
The Fed’s July meeting minutes, released Wednesday, said “the overwhelming majority” of officials said a September ease in policy would “likely be appropriate” if economic data continues “to are available in about as expected.”
In keeping with the CME FedWatch tool, investors see a 25 basis point cut as a near certainty next month, with smaller odds of a 50 basis point cut.
In a note on Thursday, Goldman Sachs analysts said there are still numerous ways Powell could surprise markets, with either a more hawkish or dovish message possible from the Fed chief.
“Possible dovish surprises could include a more concerned tackle the labor market or any suggestion that the high level of the fed funds rate is inappropriate in light of the progress made on inflation,” David Mericle, a Goldman economist, said.
Markets were also digesting latest jobless claims data, which showed applications for unemployment advantages rose barely, to 232,000. The rise comes on the heels of two weeks of declining claims following the weak July jobs report, which sparked fears of a recession earlier this month.
The report also follows revised jobs data from Wednesday, which showed the US added 818,000 fewer jobs between April 2023 and March 2024 in comparison with initial reports.
Other data released Thursday showed a 1.3% increase in sales of existing homes in July in comparison with June. The info, released by the National Association of Realtors on Thursday, falls in need of economist estimates of 1.5%, in line with a Wall Street Journal survey.
The info showed that the median price of existing homes fell to $422,600 in July, down from a record high of $426,900 in June.
Here’s where US indexes stood on the 4 p.m. closing bell on Thursday:
Here’s what else happened today:
In commodities, bonds, and crypto:
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West Texas Intermediate crude oil rose 1.3% to $72.92 a barrel. Brent crude, the international benchmark, rose 1.4% to $77.09 a barrel.
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Gold traded higher at $2,463.30.
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The ten-year Treasury yield was up eight basis points to three.863%.
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Bitcoin was down 2% to $60,413.
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