S&P 500 and Nasdaq fall as investors brace for Powell's Jackson Hole speech and rising bond yields
The S&P 500 fell on Thursday as investors braced for Federal Reserve Chair Jerome Powell’s upcoming speech at the Jackson Hole conference, according to CNBC.
The index dropped 0.89 percent, closing at 5,570.64, while the Dow Jones Industrial Average declined by 177.71 points, or 0.43 percent, to end at 40,712.78. The Nasdaq Composite saw the steepest decline, falling 1.67 percent to close at 17,619.35, as technology stocks led the market downturn.
This retreat comes after a recent recovery rally following the global market rout on August 5. Earlier in the session, all three major indexes had traded higher, with the S&P 500 nearing its all-time intraday high set in July before reversing course.
Rising bond yields and weak performance in the technology sector contributed to Thursday’s decline. The 10-year US Treasury yield rose by nearly 9 basis points to 3.863 percent, adding pressure to the market. The information technology sector led the S&P 500 lower, sliding more than 2 percent.
“The market was as flat as a pancake through almost the entire morning,” said George Ball, chairperson of Sanders Morris. He noted that the market was thinly traded and that investors were looking ahead with caution to the period after Labour Day.
Investors are now focused on Powell’s speech at the Jackson Hole Economic Symposium, hoping for more clarity on future rate policy.
According to the CME Group’s FedWatch Tool, traders widely expect a decrease in borrowing costs next month, but there is debate over whether the reduction will be a quarter or half a percentage point.
The speech follows the release of minutes from the Federal Reserve’s July meeting, where most participants indicated that it would “likely” be appropriate to lower the federal funds rate at the September meeting if data continues to meet expectations.
Despite Thursday’s decline, the Dow and S&P 500 remained slightly higher for the week, up 0.1 percent and 0.3 percent, respectively. The Nasdaq, however, was just below flat for the week.
In corporate news, Snowflake, a software company, saw its stock drop 14.7 percent as rising costs impacted its operating margins.
Nevertheless, the company exceeded quarterly expectations and slightly raised its full-year product revenue forecast. Urban Outfitters also faced a decline, with its stock falling 9.6 percent after reporting disappointing second-quarter same-store sales growth.
