US stocks retreat ahead of Fed chair’s speech
Sign up now: Get ST's newsletters delivered to your inbox
Traders working on the floor of the New York Stock Exchange, in New York City, on Aug 21.
PHOTO: REUTERS
- Wall Street indexes declined as traders anticipated Jerome Powell's speech for signals on future interest rate decisions.
- Markets expect a 25-basis-point rate cut in September, but some Fed officials are hesitant due to persistent inflation.
- Walmart reported revenue growth but noted tariffs increased import costs; shares fell 4.5 per cent.
AI generated
NEW YORK - Wall Street’s major indexes closed lower Aug 21 as traders girded for a key speech by Federal Reserve chair Jerome Powell the following morning, awaiting hints on where interest rates might be headed.
The Dow Jones Industrial Average dipped 0.3 per cent to 44,785.50, while the broad-based S&P 500 Index slid 0.4 per cent to 6,370.17.
The tech-heavy Nasdaq Composite Index dropped 0.3 per cent to 21,100.31.
There is “a general sense of caution” ahead of Mr Powell’s speech at the Jackson Hole Economic Policy Symposium, said Mr Patrick O’Hare of Briefing.com.
While markets generally expect a 25 basis points rate cut at the Fed’s next policy meeting in September, Mr O’Hare warns that there could have been a slight “rethink about how certain” this outcome is.
He noted that some Fed officials have acknowledged they are not in a hurry to lower interest rates.
While recent employment data has been weaker than earlier estimates, inflation remains notably above the Fed’s longer run 2 per cent target.
This underscores the delicate balance for Mr Powell as he addresses the central bankers’ conference on the morning of Aug 22.
Washington and Brussels released more details of their tariffs deal on Aug 21 as well, though Mr O’Hare said the market shrugged these off.
On Aug 21, traders also digested Walmart’s earnings.
While the retailer reported revenue growth and raised its outlook for the fiscal year, it noted that tariffs have added to import costs.
Walmart shares closed 4.5 per cent down.