Equities Slip, Commodities Gain, and Fed Policy in Focus Ahead of Jackson Hole

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Index Update:  The Nasdaq closed 0.67% lower after an intraday drop of nearly 2%, while the S&P 500 slipped 0.24%, pressured by declines in major tech stocks such as Apple, Amazon, and Intel. Fed minutes revealed most officials supported holding rates steady, though concerns over inflation and labor risks persisted. Markets now await Powell’s Jackson Hole speech, economic data, and earnings from Walmart and Workday.

Market Movers:  On Wednesday, the top gainers were Tharimmune, Inc. (+206.84%), followed by Alpha Technology Group Limited. (+51.49%). On the contrary James Hardie Industries plc. (-34.44%), and Array Digital Infrastructure, Inc. (-29.39%) declined the most the same day.

Commodities Update:  WTI and Brent crude oil futures climbed above $63 and $67 per barrel respectively, supported by a larger-than-expected drop in U.S. crude and fuel inventories, signaling steady demand. EIA data showed crude stockpiles fell by 6 million barrels versus forecasts for a 1.3 million-barrel draw, while gasoline inventories dropped 2.7 million barrels. Investors are also watching Russia-Ukraine peace talks closely, as progress could impact sanctions and global supply dynamics, though Russia warned against attempts to resolve security issues without its participation.

Gold prices slipped below $3,340 per ounce as markets awaited signals from the Federal Reserve’s Jackson Hole symposium. Traders are pricing in an 82% chance of a September rate cut, but recent Fed minutes indicated policymakers remain cautious, citing persistent inflation and labor market risks.

Macro Updates:  Fed Minutes Highlight Split Over Rate Cuts Amid Mixed Economic Signals

The Fed’s July minutes showed broad support for holding rates at 4.25%-4.50%, with two officials favoring a cut due to labor market weakness. Concerns grew after disappointing jobs data and revisions, though inflation pressures remain elevated, partly driven by tariffs. Markets now price in an 85% chance of a September cut, with Powell’s upcoming Jackson Hole speech expected to clarify the outlook.

Dollar Holds Firm Ahead of Jackson Hole as Markets Eye Fed Signals

The dollar index stabilized near 98.3 as traders awaited Powell’s Jackson Hole remarks for clues on rate policy. Markets now see an 82% chance of a September cut, down from 94% last week, amid Fed minutes showing persistent inflation concerns and tariff-related divisions. Meanwhile, Trump called for Fed Governor Lisa Cook’s resignation, pressed for lower rates, and weighed Powell’s successor as his term nears expiry.

Bonds Commentary:  The 10-year U.S. Treasury yield hovered around 4.3% as markets awaited Powell’s Jackson Hole speech for clarity on rate policy. Rate futures now imply an 82% chance of a September cut, down from 94% last week, as Fed minutes highlighted lingering inflation concerns and divisions over tariffs. Meanwhile, Trump called for Fed Governor Lisa Cook’s resignation over alleged fraud and is considering Powell’s replacement ahead of his term expiring in May.

Futures Update:  U.S. stock index futures edged lower as investors awaited the Federal Reserve’s Jackson Hole symposium for signals on future interest rate moves, with Dow Jones (-128 points or 0.3%), S&P 500 (-8 points or 0.1%), and Nasdaq 100 futures (-11 points or 0.1%) all posting slight declines.

Following a sharp rise early in the session, stocks regained ground throughout Wednesday’s trading, with major averages bouncing back significantly from their earlier lows. The S&P 500 dipped slightly by 15.57 points, or 0.24%, closing at 6,395.79. From a technical standpoint, the index has declined over the past three sessions, as previously mentioned, and may continue to move in the same direction or consolidate around lower levels. The 14-day RSI remains near the midpoint, indicating the potential for continued selling momentum. Support levels are around 6,300, with resistance near 6,480.