The stock market took a downturn on Thursday, with major indices closing lower as investors braced for a speech by Federal Reserve Chair Jerome Powell at the Jackson Hole Economic Symposium on Friday. The CNN Money Fear & Greed index, a gauge of market sentiment, also reflected this cautious mood, declining from 51.7 to 47.4, remaining in the “Neutral” zone.
The decline in equities followed mixed economic data releases. Initial jobless claims, a measure of layoffs, rose slightly to 232,000 in the week ending August 17th. The S&P Global manufacturing PMI dipped to 48 in August, indicating contraction in the manufacturing sector, while the services PMI rose to 55.2, showing continued growth in the service sector.
Among individual stocks, Williams-Sonoma, Inc. (WSM) shares fell over 9% after the company reported its second-quarter results. However, Peloton Interactive, Inc. (PTON) shares surged 35% following better-than-expected second-quarter financial results.
The major indices closed the session with losses. The Dow Jones Industrial Average dropped by around 178 points to 40,712.78. The S&P 500 fell 0.89% to 5,570.64, and the Nasdaq Composite dipped 1.67% to 17,619.35.
Investors are also looking toward earnings releases from 51Talk Online Education Group (COE) and Yunji Inc. (YJ) on Thursday.
Understanding the CNN Business Fear & Greed Index:
The Fear & Greed Index measures the current market sentiment, using the premise that fear exerts pressure on stock prices, while greed has the opposite effect. It is calculated based on seven equally weighted indicators, with a scale ranging from 0 to 100. A reading of 0 represents maximum fear, while 100 indicates maximum greed.
The market’s current uncertainty and anticipation of Powell’s speech at Jackson Hole contribute to the cautious sentiment reflected in the Fear & Greed Index and the overall market performance.
