Traders on the floor of the New York Stock Exchange were met with a slight pullback in the market on Thursday, as the S&P 500 slipped 0.6% from its recent rally. This move away from trading within striking distance of the all-time intraday high set in July was mirrored by the Dow Jones Industrial Average, which lost 149 points, or 0.4%, and the Nasdaq Composite, which shed 1%.
Investors were eagerly awaiting commentary from Federal Reserve Chair Jerome Powell, expected later in the week. Powell’s speech at the Jackson Hole Economic Symposium on Friday was anticipated to provide further insight into rate policy. Traders were already pricing in a 100% chance of a rate cut next month, according to the CME Group’s FedWatch tool, but there was uncertainty surrounding the size of the reduction.
Gina Bolvin, president of Bolvin Wealth Management, noted, “The market has already really priced in the Fed cutting rates. That’s why the market has rallied.” This sentiment was reinforced by the release of minutes from the Fed’s July meeting, which indicated that a rate cut at the September meeting was likely if data continued to meet expectations.
In addition to the Fed-related news, rising bond yields also put pressure on stocks on Thursday. The 10-year U.S. Treasury yield climbed around 8 basis points, contributing to the downward trend in the market.
Despite the retreat on Thursday, the major indexes were still on track to finish the week higher. The Nasdaq Composite and S&P 500 had each added about 0.5%, while the Dow had risen 0.1%. In corporate news, software company Snowflake saw a nearly 13% drop in its stock price due to rising costs impacting its operating margins. However, the company beat quarterly expectations and slightly raised its full-year product revenue forecast. Urban Outfitters also experienced a decline, sliding about 8% after disappointing second-quarter same-store sales growth.
Overall, the market’s reaction to Powell’s upcoming speech and the uncertainty surrounding the size of the anticipated rate cut kept investors on their toes. The week’s developments highlighted the delicate balance between market expectations, economic data, and corporate performance that drive the fluctuations in the stock market.
