U.S. stock index futures held steady ahead of what could be a market driving speech by Federal Reserve Chairman Jerome Powell that may offer investors much needed clues on the pace of interest-rate increases.
However, futures pared early losses after data showing the Fed’s favored inflation gauge edged lower in July.
Need to Know: The asset classes are always talking to each other, and here’s what they might be telling stocks
How are stock-index futures trading?
- S&P 500 futures ES00, +0.27% fell 6 points, or 0.1%, to 4,195.75
- Dow Jones Industrial Average futures YM00, +0.43% rose 7 points to 33,279
- Nasdaq-100 futures NQ00, +0.31% dropped 0.1%, or 21.35 points, to 13,134
Thursday marked the best session in two weeks for all three major indexes. The S&P 500 SPX, +1.41% rose 1.4% to 4,199.12, the Dow industrials DJIA, +0.98% climbed 322.55 points, or 1%, to close at 33,291.78 and the Nasdaq Composite COMP, +1.67% a dvanced 1.7% to 12,639.27.
What’s driving the market?
In the main event that markets have been looking forward to all week, if not longer, Powell will address the Kansas City Fed’s Jackson Hole Economic Symposium at 10 a.m. Eastern. Many expect he will back the central bank’s pledge to battle inflation.
“The Fed will want to be sure that inflation is falling at a sustainable enough pace before it signals any sort of dovish shift or pivot, especially if inflation turns out to be stickier than expected,” said Michael Hewson, chief market analyst at CMC Markets UK.
“He therefore needs to put to bed any idea that somehow rates will start to come down much before 2024, and in so doing, in contrast to last year when the narrative was lower for longer, he’ll need to craft the message of higher for longer, without prompting a meltdown in bond markets.”
Opinion: The Federal Reserve’s Powell has a lot of explaining to do
Read: How stocks perform as central bankers gather each year at Jackson Hole
Ahead of Powell’s remarks, a batch of fresh data was released, including the headline PCE inflation index, which dropped 0.1% for July and to 6.3% from 6.8% annually. The core PCE price index, closely watched by Fed policy makers, rose 0.1% on a one-month basis but decelerated by a slightly bigger-than-expected amount to a 4.5% year-over-year rate, from 4.8%,
Read: Inflation falls in July for the first time in 20 months, key gauge shows
Personal incomes climbed 0.2% in July, while consumer spending rose 0.1%, below forecast. The U.S. trade in goods deficit sank 9.7% in July, while inventories rose.
What companies are in focus?
- Electronics Arts Inc. EA, +1.59% shares climbed 6.8% on a report that Amazon.com Inc. AMZN, +2.60% was planning to announce an offer to acquire the videogame maker.
- Shares of Dell Technologies Inc. DELL, +2.75% fell 4% in premarket trading after executives said the end of the pandemic-driven PC sales boom appeared in the second quarter. Revenue fell short of analysts expectations.
- Gap Inc. GPS, +1.01% stock rallied 8% after the retailer swung to a surprise adjusted profit and sales slightly beat Wall Street expectations.
How are other assets trading ?
- Crude prices pared earlier gains. West Texas Intermediate crude CL.1 CLV22 rose 34 cents, or 0.3%, to $ 92.86 a barrel, while Brent BRN00 BRNV22 rose 0.5%, or 53 cents, to $ 98.99 a barrel. Natural-gas prices NG00 rose 0.6%.
- The yield on the 10-year Treasury note BX:TMUBMUSD10Y was up 3 basis points to 3.059%, while the 2-year note yield BX:TMUBMUSD02Y was steady at 3.36%.
- Gold prices GC00 fell 0.5%, or $ 10.30, to $ 1,751.40 an ounce. The ICE Dollar Index DXY fell 0.3% to 108.13.
- Bitcoin BTCUSD slipped 0.6% to $ 21,515.
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