4:02pm: In the red
US stocks struggled on Friday as bets swung towards a rate hike in September following Fd chair Warsh’s speech at Jackson Hole.
The Nasdaq finished the day down 0.5% at 26,402 points, while the S&P 500 was down 0.3% at 7,711 points and the Dow Jones edged 10 points lower to 53,559 points.
1:10pm: Markets confused
After initially rising following the Fed chair’s speech, Wall Street was firmly in the red in the early afternoon. The Nasdaq led the declines, down 0.6%, while the S&P 500 was down 0.4% and the Dow Jones slipped 0.2%.
With Warsh not offering any forward guidance, markets are confused, according to XTB research director Kathleen Brooks.
“Kevin Warsh’s much-anticipated speech at Jackson Hole was a break from the past; as expected there was no forward guidance. We did not get prepped about any future rate hike, and the markets can’t seem to agree on what his message was,” Brooks said.
“Stocks are acting like he was dovish, while gold, the dollar and bonds are all acting like his speech was hawkish. One thing Warsh did achieve today was to confuse financial markets.”
11:15am: Warsh speaks at Jackson Hole
Fed chair Kevin Warsh addressed the Jackson Hole Economic Policy Symposium, emphasizing the central bank's focus on inflation while presenting an assessment of broader economic conditions.
During his remarks, Warsh stated that underlying inflation remains above the target level and that achieving price stability is the primary objective of the Fed, specifically noting figures from the Personal Consumption Expenditures index.
Continuing his established approach, Warsh did not provide forward guidance regarding future interest rate adjustments or policy timelines. He remarked that broad financial conditions do not currently appear restrictive to the overall economy.
Market participants are evaluating these comments to assess the trajectory of monetary policy, coinciding with adjustments in short-term Treasury yields and observations of market-based inflation expectations.
Following his remarks, the Nasdaq, S&P 500 and Dow Jones all added about 0.3%.
10am: Mixed start
Stocks were mixed at Friday’s open, with the Nasdaq flat at 26,541 points, while the S&P 500 was up 0.1% at 7,738 points and the Dow Jones added 0.2% at 53,669 points.
Investors held off making any big moves ahead of Fed chair Kevin Warsh’s first Jackson Hole speech.
“Now that the Tech trade is on a more solid footing, the focus can shift to Jackson Hole, where global central bankers have gathered for the Federal Reserve's annual conference,” said Kathleen Brooks, XTB research director.
“If Warsh gets his way, then his speech will not be market-moving. As we said earlier this week, Nvidia is more important than the Fed at this stage of the AI revolution. Kevin Warsh should be happy about that.”
7:40am: Ahead of the bell
Wall Street is watching Wyoming this morning. US stock futures idled on Friday, with traders in no mood for big bets ahead of Federal Reserve chair Kevin Warsh's speech at the Jackson Hole symposium.
Dow and S&P 500 futures hovered near flat, while the Nasdaq 100 slipped 0.3%, taking a breather after Thursday's tech-fuelled rally.
The main event lands at 10am Eastern time, when Warsh delivers his first Jackson Hole address as Fed chair.
Investors want one thing from him: clarity. His remarks at the last policy meeting left markets scratching their heads, and with officials still split on whether to raise rates and inflation refusing to come to heel, nobody wants to guess wrong.
Treasury yields held steady but stayed close to multiyear highs, a reminder that worries about inflation and the national debt haven't faded.
Elsewhere, the AI trade has rediscovered its swagger: Nvidia's upbeat long-term outlook silenced the bears on Thursday, while Salesforce shrugged off "SaaSpocalypse" fears to log its best day since 2020.
With no major earnings on the docket, the University of Michigan's consumer sentiment survey is the only real sideshow to Warsh's main event.