4:15pm: Stocks slip as focus shifts to Powell's upcoming remarks
US markets paused their longest rally of the year on Tuesday, with all three major indexes closing slightly lower as investors turned their focus to Fed Chair Powell's upcoming speech at Jackson Hole.
The S&P 500 and Dow Jones each fell around 0.2%, while the Nasdaq dropped 0.3%.
Anticipation for Powell's remarks and upcoming job growth revisions from the Bureau of Labor Statistics is keeping investors on edge.
2:00pm: Markets tread water
The Dow Jones had inched towards its opening levels by midafternoon Tuesday as anticipation builds for Fed chair Powell's speech at Jackson Hole later this week.
The Nasdaq was still down around 0.2% and the S&P 500 was struggling to stay afloat as Wall Street's eight-day rally lost steam.
"(With) the Fed’s decision on the pace of rate cuts data dependent, it will be difficult for Powell to pre-commit to a particular trajectory at Jackson Hole," analysts at Deutsche Bank commented.
Powell's comments could point to a few themes, according to the analysts.
"First, there is a strong base case for a September cut. Second, with downside risks to the labor market, rate cuts are likely to be faster than a quarterly pace.
"Third, with rate cuts framed as dialing back restraint, it is unclear if rates will fall well below neutral. Fourth, with r-star uncertain and policy risks evident following the election, rate cuts beyond the first 75-125bps are more uncertain."
11:30am: Rally slows
Monday's rally is slowing ahead of the FOMC minutes due Wednesday.
''The near two-week-long stock index rally on both side of the Atlantic is taking a breather ahead of Wednesday's July FOMC minutes", says Axel Rudolph, Senior Technical Analyst at online trading platform IG.
"A widely anticipated 25 basis point rate cut by the Swedish Riksbank to 3.5% and Canadian inflation falling to an over 3-year low were not enough to keep US and European equity indices afloat."
Major indices were in the red during midmorning trading.
9:55am: Dollar hits year's low
It was a mixed start for Wall Street on Tuesday, with the Dow Jones slipping but small gains seen for the S&P 500 and Nasdaq Composite.
The Dow dropped 40 points or 0.1% in the first half hour, while the S&P 500 added 0.1% and the Nasdaq almost the same.
Tesla rose 2.2% on reports that the European Union is to cut its planned tariffs on vehicles the US company imports from China, from the 20.8% set last month to a new rate of 9%.
Palo Alto Networks is the top riser in the Nasdaq 100 after the cybersecurity group's earnings last night beat expectations.
Holding the Dow back, Intel is down 2.8% and Boeing 2% lower.
Yesterday, Boeing was told by the US Federal Aviation Administration that inspections of 787 Dreamliners would be needed following the sudden midair dive of a LATAM Airlines flight earlier this year.
7.47am: S&P and Nasdaq heading for slow start
US stocks are set for a tepid start, according to futures markets.
S&P 500 futures and Nasdaq 100 futures are up around 0.05%, while Dow Jones futures are just below flat.
The US dollar is at its weakest this year, based on the dollar index (DXY), which has fallen below the 'flash crash' lows earlier this month and below 102 for the first time since late December.
This comes a day after stock markets continued their recover from the turbulence earlier in the month, with the S&P 500 posting an eighth consecutive advance for the first time since November.
The S&P is now just over 1% beneath its all-time high from July, Deutsche Bank analysts noted, having recovered by nearly 8% over this the past eight sessions.
If the US benchmark pulls off a ninth consecutive advance today, it would be the first time since 2004, the analysts said, while the equal-weighted version of the S&P also hit an all-time high yesterday to show the breadth of the recovery, while the VIX volatility index was down to a one-month low.
"Those gains came as investors’ concerns about a US recession continued to ease over the last 24 hours, moving further away from the sudden wave of fears after the US jobs report on August 2," the analysts said.
However, "many of the factors that led to the selloff in the first place haven’t gone away," they cautioned, though markets have dialled back the likelihood of a 50-basis-point rate cut at the Federal Reserve’s next meeting, with futures pricing in nearer a 25bps cut.