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The indexes fell on Thursday as investors await comments from Fed Chairman Jerome Powell in Jackson Hole.
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Investors are curious about the extent of interest rate cuts over the remainder of this year.
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Traders also recorded a slight increase in jobless claims from the previous week, up 4,000 to 232,000.
Indexes closed lower on Thursday as investors awaited comments from Federal Reserve Chairman Jerome Powell at the Federal Reserve conference in Jackson Hole on Friday.
The S&P 500 and the Dow Jones Industrial Average closed slightly lower, though the Nasdaq Composite posted a larger decline of 1.6%. Treasury yields rose, with the yield on the 10-year note up eight basis points to 3.863%
Investors are eager to see how extensive the rate cuts will be, as markets are betting there is a 100% chance the Fed will ease monetary policy at next month’s FOMC meeting.
Minutes from the Fed’s July meeting, released Wednesday, said “the vast majority” of officials said an easing of policy in September would “likely be appropriate” if economic data remained “about as expected.”
According to the CME FedWatch tool, investors are almost certain to expect a 25 basis point rate cut next month, while a 50 basis point cut is less likely.
Goldman Sachs analysts said in a note on Thursday that Powell could still surprise markets in several ways, including with a more aggressive or dovish message from the Fed chairman.
“Potential dovey surprises could include a more concerned attitude toward the labor market, or a suggestion that the high level of the federal funds rate is inappropriate given the progress that has been made on inflation,” said David Mericle, an economist at Goldman.
Markets also digested new jobless claims data, which showed applications for unemployment benefits rose slightly to 232,000. The rise follows two weeks of declining claims after July’s weak jobs report, which fueled recession fears earlier this month.
The report also follows revised jobs numbers on Wednesday, which showed the U.S. added 818,000 fewer jobs between April 2023 and March 2024 compared to the initial reports.
Other data released Thursday showed a 1.3% increase in existing-home sales in July compared with June. The data, released Thursday by the National Association of Realtors, fell short of economists’ estimates of a 1.5% increase, according to a Wall Street Journal survey.
The data showed the median price of existing homes fell to $422,600 in July, down from a record high of $426,900 in June.
This was the position of the US indices at the closing bell on Thursday at 4:00 p.m.:
Here’s what else happened today:
In commodities, bonds and crypto:
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West Texas Intermediate crude rose 1.3% to $72.92 a barrel. Brent crude, the international benchmark, rose 1.4% to $77.09 a barrel.
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Gold rose to $2,463.30.
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The 10-year US Treasury yield rose eight basis points to 3.863%.
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Bitcoin fell 2% to $60,413.
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