Stock futures drifted slightly lower Thursday as investors shifted their focus on the annual central-bank symposium in Jackson Hole, Wyo., which could provide investors insight about coming monetary policy after minutes from the Federal Reserve’s July 30-31 meeting offered few surprises and suggest that policy makers want to remain flexible.
How are the major benchmarks faring?
Futures for the Dow Jones Industrial Average
slipped 38 points, or 0.2%, at 26,188, those for the S&P 500
retreated 5.45 points, or 0.2%, to 2,923.75, while Nasdaq-100 futures
declined 23 points to 7,727.25, a fall of 0.3%.
On Wednesday, the Dow
rose 240.29 points, or 0.9%, to 26,202.73, the S&P 500 index
climbed 23.92 points, or 0.8%, to 2,924.43, while the Nasdaq Composite Index
climbed 71.65 points, or 0.9%, to 8,020.21.
What’s driving the market?
The Jackson Hole gathering kicks of later Thursday, where Fed officials will convene with academics and foreign central bankers in the Grand Tetons in Wyoming to discuss the economic outlook. Fed Chairman Jerome Powell will deliver a closely watched speech on the challenges facing monetary policy at 10 a.m. Eastern Time on Friday.
Wall Street is eager to gain insights about monetary policy in the U.S. and across the globe as a number of signals have pointed to the possibility that a recession may be lurking in the domestic economy. On Wednesday, the so-called yield curve, the spread between the 2-year Treasury note and the 10-year briefly inverted for the second time in a week, with that condition being viewed as an accurate predictor of coming economic recessions.
However, market participants and economists have told MarketWatch that the Fed may not be as alarmed by the so-called yield-curve inversion, where shorter-dated yields rise above their longer-dated counterparts.
Jackson Hole comes after minutes of the Fed’s July meeting showed policy makers believed that “it was important to maintain optionality in setting policy.” The rate-setting Federal Open Market Committee voted 8 to 2 to lower its target for short-term interest rates by 25 basis points to 2%-2.25%, marking its first such rate reduction in more than a decade.
“We already knew that last months Fed rate cut was likely to be a contentious decision, given the differing views that were already being voiced in the lead-up to the decision,” wrote Michael Hewson, chief market analyst at CMC Markets, in a daily research note.
“Yesterday’s release of the minutes only served to confirm that view, and while Fed [Chairman] Jay Powell pushed the line that the reduction was a “mid-cycle adjustment” policy makers were sharply split on the course of action to take,” he wrote.
Elsewhere, investors also will be watching for signals from Europe, with the European Central Bank set to publish the minutes from its most recent policy-setting session.
Which stocks are in focus
Shares of Hormel Foods Corp.
gained 2.5% after the meat producer released fiscal third-quarter results Thursday morning.
edged 0.5% lower after reports that there was a data breach for its German loyalty program.
How are other markets trading?
The yield on the 10-year U.S. Treasury note
stood at 1.583%, compared with the 2-year Treasury note
which was at 1.561%.
Stocks in Asia traded mixed overnight, as China’s CSI 300
edged up 0.3%, Hong Kong’s Hang Seng Index
retreated 0.8% and Japan’s Nikkei 225
inched up less than 0.1%.
In Europe, stocks traded mostly lower, with the Stoxx Europe 600
In commodities markets, the price of U.S. crude oil
was rising, while gold prices
were seeing solid losses. The U.S. dollar
also was edging higher against its major counterparts.