5 days ago
Wall Street Futures Edge Lower Ahead of Warsh Speech
US stock futures were slightly lower as investors waited for Kevin Warsh to speak.
His speech may explain what the Federal Reserve plans to do with interest rates.
Investors currently expect rates to stay unchanged in September.
They see a possibility that rates could rise by December.
Technology stocks had rallied the day before after Nvidia and Salesforce reported encouraging results.
Nvidia’s forecast suggested that companies are still spending heavily on artificial-intelligence technology.
Salesforce said its AI plans were beginning to generate recurring revenue.
Oil prices fell as traders hoped problems around the Strait of Hormuz might ease.
The three major US stock indexes were still on track for weekly gains.
S&P 500 futures edged lower, while Nasdaq-100 futures fell 0.3% and Dow futures gained 49 points, or 0.1%.
Investors awaited Kevin Warsh’s first major speech as Federal Reserve chair for clues about interest-rate policy.
Nvidia and Salesforce fueled Thursday’s technology rally with strong results and guidance tied to artificial-intelligence spending.
Markets priced in no September rate change but a 74% chance of at least a 25-basis-point hike by December.
Brent crude fell to about $88 per barrel and was down more than 6% for the week amid hopes of reduced Strait of Hormuz disruptions.
- Who
- US stock-market investors, Federal Reserve Chair Kevin Warsh, Nvidia, Salesforce, and other publicly traded companies.
- What
- US stock futures edged lower as investors awaited Kevin Warsh’s speech and assessed interest-rate, technology, and oil-market developments.
- Where
- US financial markets, with policy signals expected from the Jackson Hole symposium and oil-market concerns focused on the Strait of Hormuz.
- When
- Friday, 28 August; the speech was scheduled for that day, after a strong market session on Thursday.
- Why
- Investors wanted clearer guidance on the Federal Reserve’s interest-rate path while also weighing strong AI-related corporate results, inflation, economic growth, and changing oil-supply risks.
Reasons for Caution
Reasons for Optimism
Federal Reserve policy
Reasons for Caution
Investors were concerned about higher-than-expected PCE inflation, resilient economic growth, and the possibility of another rate hike before the end of 2026.
Reasons for Optimism
Markets still priced in no change to borrowing costs in September, and Warsh’s speech could provide greater clarity about the policy outlook.
Artificial-intelligence investment
Reasons for Caution
Investors were scrutinizing whether heavy AI spending could continue to support earnings growth after volatility in technology stocks.
Reasons for Optimism
Nvidia’s strong outlook suggested that AI-infrastructure spending remained robust, while Salesforce’s guidance indicated its AI strategy was beginning to produce recurring revenue.
Oil and regional risks
Reasons for Caution
The Iran conflict and disruptions to oil shipments through the Strait of Hormuz had contributed to higher inflation and volatile crude prices.
Reasons for Optimism
An Iran-Oman agreement on managing the waterway and the US decision to increase economic pressure on Iran rather than launch further military attacks raised hopes that disruptions could ease.
Key facts
- S&P 500 futures
- Fell marginally in Friday trading.
- Nasdaq-100 futures
- Lost 0.3%.
- Dow futures
- Rose 49 points, or 0.1%.
- December rate-hike pricing
- Traders saw a 74% chance of at least a 25-basis-point increase.
- Thursday market performance
- The S&P 500 rose 0.7%, the Dow gained 0.2%, and the Nasdaq climbed 1.6%.
- Brent crude
- Slipped to around $88 per barrel and was down more than 6% for the week.
- Notable stock moves
- Nvidia and Salesforce rose 8% and 23%, respectively, on Thursday; Gap gained 15%, while Marvell Technology fell 9%.
Sources
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