Wall Street experienced a downturn on Thursday as traders adopted a cautious approach ahead of Federal Reserve Chair Jerome Powell’s highly anticipated speech at the Jackson Hole Symposium on Friday. While Powell is expected to signal a potential rate cut in September, market sentiment currently favors a smaller 25-basis-point reduction over a more substantial 50-basis-point cut. This cautious stance reflects a desire to assess the economic landscape before making significant monetary policy changes.
Economic data released on Thursday painted a somewhat positive picture, indicating that U.S. private sector activity surpassed expectations in August. This growth was primarily driven by the services sector, which more than compensated for the faster contraction in manufacturing. This mixed bag of economic news further underscores the need for careful consideration of the Fed’s next steps.
Major U.S. equity indices traded lower throughout the session, reflecting the prevailing uncertainty. The dollar and Treasury yields rebounded after four consecutive days of losses. The U.S. dollar rose nearly 0.4% against a basket of major currencies, while the yield on the 10-year Treasury note climbed six basis points. This strength in the dollar and Treasury yields led to a decline in bond prices, with the iShares 20+ Year Treasury Bond ETF TLT dropping 1.2%.
The energy sector emerged as the day’s top performer, buoyed by a more than 2% surge in oil prices. However, natural gas prices plunged over 6% due to higher-than-expected inventory builds. Gold also took a hit, declining over 1% and falling below the $2,500 per ounce threshold, weighed down by the strength of the dollar and rising Treasury yields. Bitcoin (BTC/USD) fell 1% to $60,000, failing to sustain Wednesday’s bullish momentum, which saw the largest cryptocurrency rise 3.6%.
Here’s how major indices performed on Thursday:
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Dow Jones:
40,830.40 (-0.1%)*
Russell 2000:
2,172.03 (-0.2%)*
S&P 500:
5,608.27 (-0.2%)*
Nasdaq 100:
19,735.54 (-0.5%)Among exchange-traded funds (ETFs), the SPDR S&P 500 ETF Trust (SPY) was down 0.1% to $559.92, while the SPDR Dow Jones Industrial Average (DIA) eased 0.1% to $408.78. The tech-heavy Invesco QQQ Trust Series (QQQ) fell 0.4% to $480.73, and the iShares Russell 2000 ETF (IWM) inched 0.2% lower to $215.03. The Energy Select Sector SPDR Fund (XLE) outperformed, gaining 0.6%, while the Technology Select Sector SPDR Fund (XLK) lagged behind, down by 0.8%.
In individual stock movements, Snowflake Inc. (SNOW) plummeted 12% as its guidance disappointed, despite the company reporting stronger-than-expected results in the last quarter. Other stocks reacting to corporate earnings include:
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Zoom Video Communications Inc. (ZM):
Up 13%*
Synopsys Inc. (SNPS):
Down 1.77%*
Agilent Technologies Inc. (A):
Up 0.36%*
Nordson Corp. (NDSN):
Up 2.06%*
Williams-Sonoma Inc. (WSM):
Down 7%*
Viking Holdings Ltd (VIK):
Down 3.81%*
BJ’s Wholesale Club Holdings Inc. (BJ):
Down 6.29%Major companies slated to report quarterly results after the close include Intuit Inc. (INTU), Workday Inc. (WDAY), Ross Stores Inc. (ROSS), CAVA Group Inc. (CAVA), and BILL Holdings Inc. (BILL).
