Tech stocks were once again on the back foot overnight, with the Nasdaq sliding 0.67% to 21,172. Some late dip-buying helped trim heavier losses, but sentiment remained cautious. The Dow held flat, edging just 0.04% higher to 44,938, while the S&P eased 0.24% to 6,395.
Treasuries saw muted moves, with the 2-year finishing unchanged at 3.748% and the 10-year easing 1.6bps to 4.291%. The dollar was equally subdued, with the DXY off just 0.02%.
In commodities, oil jumped sharply after a bigger-than-expected draw in US inventories and ongoing delays to ceasefire talks in Ukraine – Brent up 1.73% to $66.93 and WTI up 1.70% to $62.82. Gold also benefitted from safe-haven flows, finishing nearly 1% higher at $3,348.43 an ounce.
All Eyes on Powell at Jackson Hole
It’s been one of those weeks where traders are largely marking time ahead of the main event. From the outset, focus has been squarely on Fed Chair Jerome Powell’s Jackson Hole address on Friday. For good reason — this platform has historically been used to signal big-picture shifts in Fed thinking.
With inflation concerns still lingering and tensions between the Fed and the White House simmering, Powell’s update could deliver fireworks — not something we usually say about central bank speeches.
A more cautious tone on the inflation front could see rate-cut bets pared back sharply, potentially sending equities lower. For now, the modest pullback in stocks could just be the calm before a bigger move.
PMI Data to Set the Tone Today
Before Powell takes the stage, there’s plenty of second-tier data to digest. Flash Manufacturing and Services PMI numbers are due across the globe — from Australia and Europe through to the UK and US. Any significant misses could spark volatility.
The US session will also bring:
- Weekly Jobless Claims (expected: 226k)
- Philly Fed Manufacturing Index (expected: 6.8)
- Existing Home Sales (expected: 3.92mio)
That said, unless we see major surprises, markets are likely to remain range-bound and cautious ahead of Powell’s highly anticipated remarks tomorrow.
💡 At Spec FX, we continue to monitor macroeconomic drivers closely, helping traders navigate the shifting landscape across equities, commodities, and currencies.