Stocks inch higher in uneasy trade ahead of Powell: Markets Wrap

by Andre Janse van Vuuren and Sagarika Jaisinghani

US stock futures paused this week’s run of losses in uncertain trade ahead of Federal Reserve Chair Jerome Powell’s Jackson Hole address, with markets scaling back bets on imminent rate cuts.

S&P 500 contracts rose 0.1% after the US benchmark slipped for five straight sessions. Futures for the Nasdaq 100 were little changed. European stocks advanced 0.2%, nudging closer toward an all-time high. US Treasuries held steady after Thursday’s losses, with the 10-year rate at 4.33%.

A selloff in big tech has halted US stocks’ record-breaking rally as investors await Powell’s latest policy blueprint and weigh whether the Fed will stay cautious on inflation, or tilt toward supporting a softer labor market.

Swaps have sharply reduced the odds of aggressive near-term easing, now pricing about a 70% chance of a cut next month and fewer than two moves this year. Little more than a week ago, markets were betting on a full quarter-point reduction in September, with some traders even positioning for a half-point move.

The stakes are heightened by pressure from the Trump administration to cut rates and growing divisions within the Fed’s rate-setting committee. To keep his options open, Powell may emphasize that the Fed’s September move will be guided by employment and inflation figures set for release early next month. 

He is due to speak at 10 a.m. New York time.

“If the Fed doesn’t cut in September, markets will drop because they are expecting the Fed to do something. If they cut too much, markets may take it as a sign that the Fed is losing its independence, which may trigger much higher inflation,” said Joachim Klement, a strategist at Panmure Liberum. “It’s like Goldilocks with two bears and a bull.”

Corporate News:

• Meta Platforms Inc. is hiring another key Apple Inc. artificial intelligence executive, even as the social networking company prepares to slow its recruitment, according to people familiar with the matter.
• Nvidia Corp. has instructed component suppliers including Samsung Electronics Co. and Amkor Technology Inc. to stop production related to the H20 AI chip, The Information reported, citing unidentified sources.
• Air Liquide SA agreed to buy South Korea’s DIG Airgas for an enterprise value of €2.85 billion ($3.3 billion) as it seeks to expand in Asia.
• Fonterra Co-operative Group has agreed to sell its global Consumer and related businesses to French dairy giant Lactalis for NZ$3.85 billion ($2.2 billion).
• The Trump administration will not seek equity stakes in chipmakers like Taiwan Semiconductor Manufacturing Co. and Micron Technology Inc. that are boosting their US investments, as talks continue on taking a stake in Intel Corp., a US official said.
• The US Department of Justice has rejected claims by two whistleblowers that it failed to properly investigate allegations of sanctions violations by Standard Chartered Plc, the bank said.

Some of the main moves in markets:

Stocks

• The Stoxx Europe 600 rose 0.2% as of 9:24 a.m. London time
• S&P 500 futures rose 0.1%
• Nasdaq 100 futures were little changed
• Futures on the Dow Jones Industrial Average rose 0.2%
• The MSCI Asia Pacific Index rose 0.2%
• The MSCI Emerging Markets Index rose 0.2%

Currencies

• The Bloomberg Dollar Spot Index was little changed
• The euro fell 0.1% to $1.1594
• The Japanese yen fell 0.1% to 148.58 per dollar
• The offshore yuan was little changed at 7.1838 per dollar
• The British pound was little changed at $1.3411

Cryptocurrencies

• Bitcoin rose 0.7% to $113,190.33
• Ether rose 2.4% to $4,341.84

Bonds

• The yield on 10-year Treasuries was little changed at 4.33%
• Germany’s 10-year yield was little changed at 2.75%
• Britain’s 10-year yield advanced one basis point to 4.74%

Commodities

• Brent crude rose 0.1% to $67.75 a barrel
• Spot gold fell 0.3% to $3,327.66 an ounce

This story was produced with the assistance of Bloomberg Automation.

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