As the sun rose over the crowded floor of the New York Stock Exchange on August 20, 2024, the mood was tense. The S&P 500 Index fell Thursday after enjoying a recent surge, as investors awaited Federal Reserve Chairman Jerome Powell’s eagerly anticipated speech at the central bank’s annual symposium in Jackson Hole.
The overall index fell 0.7%, approaching its intraday high in July. The Dow Jones Industrial Average fell 212 points, or 0.5%, and the Nasdaq Composite fell 1.3%.
A significant factor in Thursday’s market decline was rising bond yields, particularly 10-year U.S. Treasuries, which rose about 10 basis points to 3.875%.
“The market today has been unusually sluggish,” said George Ball, president of Sanders Morris. “We’re seeing a cautious market, especially as we approach Labor Day and the post-holiday period.”
Attention is now turning to Powell’s upcoming speech at the Jackson Hole Economic Symposium on Friday. Market participants are anxiously awaiting further clarification on future rate adjustments. While borrowing costs are widely expected to decline next month, opinions are split between a quarter- and half-percentage-point cut, based on the latest projections from CME Group’s FedWatch tool.
These expectations follow the release of the minutes from the Fed’s July session on Wednesday, which suggested that most central bank officials believe a cut in the federal funds rate from the current range of 5.25% to 5.5% might be appropriate in September, subject to incoming data.
As the week comes to a close, the Dow Jones remains largely unchanged, while the S&P 500 and Nasdaq Composite posted modest gains of 0.5% and 0.4%, respectively.
In other news, shares of tech company Snowflake fell more than 13% on rising operating costs, despite beating quarterly expectations and slightly upping its full-year revenue forecast. Meanwhile, Urban Outfitters saw its shares fall more than 9% following weaker-than-expected same-store sales in its second quarter.
