US stocks were broadly steady on Monday after posting their best week in a year, as investors began counting down to a speech by Fed Chair Jerome Powell at Jackson Hole that could reset rate-cut expectations. The S&P 500 (^GSPC) rose 0.1% to hover near record highs, while the Dow Jones Industrial Average (^DJI) also wavered around the flatline. The tech-heavy Nasdaq Composite (^IXIC) rose 0.1%.
Stocks are set to consolidate last week’s strong gains as a measure of calm returns to a market previously whipsawed by worries about a potential recession. Last week’s rally recouped the losses stacked up in an early August sell-off as Wall Street fretted about cracks in the economy — concerns that have since been eased by encouraging inflation and consumer spending data.
Focus is already turning to Powell’s speech at the central bank’s Jackson Hole symposium on Friday, in a quiet week for economic data. As confidence in a “soft landing” for the economy grows — Goldman Sachs now sees a lower likelihood of recession — the question for investors isn’t whether the Fed will lower interest rates in September, but by how much.
As of Monday morning, traders are pricing in a 72% chance the Fed will reduce rates by 0.25% at that meeting, and 28% odds for a 0.50% cut, according to the CME FedWatch tool. But the release on Wednesday of minutes from the Fed’s July meeting could sway those bets.
Meanwhile, investors will also keep a watchful eye on the Democratic National Convention kicking off on Monday, which could bring more insight into what to expect from presidential nominee Kamala Harris.
In the latest update, US stocks gained slightly on Monday after posting their best week in a year as investors awaited Fed Chair Jerome Powell’s speech on Friday at Jackson Hole, with Wall Street set to receive further glimpses of the state of the consumer amid a slew of retail earnings. The S&P 500 (^GSPC) opened flat but held near record highs, while the Dow Jones Industrial Average (^DJI) also rose above the flatline. The tech-heavy Nasdaq Composite (^IXIC) added 0.1%.
Investors will pay close attention for any signals as to rate-cut expectations when Powell speaks at the Jackson Hole Economic Symposium on Friday.
Wall Street will get further insights on the health of the consumer this week as Lowes (LOW), Target (TGT), Macy’s (M), The TJX Companies (TJX), and BJs Wholesale Club post quarterly results. The reports come following encouraging inflation and consumer spending data.
Meanwhile, the Democratic National Convention kicks off on Monday, which could give investors more insight on what to expect from presidential nominee Kamala Harris.
Overall, the stock market remains steady as investors await key events and data releases that could provide further clarity on the economic outlook and potential rate cuts by the Federal Reserve. The upcoming speeches and earnings reports will likely shape market sentiment in the coming days.
