US equity futures stall after S&P 500 hits record high, as attention focuses on Jerome Powell’s speech in Jackson Hole
- US equity futures were roughly flat on Wednesday after the S&P 500 hit a record high on Tuesday.
- Investors are focusing on the Fed’s Jackson Hole meeting, where its chairman Jerome Powell will speak on Friday.
- Powell’s speech will be scrutinized for signals on the future direction of the Fed’s monetary policy.
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U.S. equity futures fluctuated around the flat line on Wednesday after the S&P 500 index hit a new high the day before, as investors awaited a key speech from Federal Reserve Chairman Jerome Powell.
S&P 500 futures were little changed, while Nasdaq 100 futures were up 0.1%. Dow Jones futures were also roughly flat.
In Europe, the continent-wide Stoxx 600 was up 0.14%. Asian stocks mostly rose overnight, with China’s CSI 300 rising 0.2%.
Stock markets have had a relatively quiet few weeks, with the S&P 500 consistently hitting new highs despite falling last week after US retail sales disappointed investors.
Strong impulses from central banks and governments, the reopening of economies and the deployment of coronavirus vaccines are supporting all actions. However, increasing cases of the Delta variant coronavirus, high inflation, and signs of labor and supply shortages are worrying some market players.
The key event for traders and investors this week is the speech by Federal Reserve Chairman Jerome Powell on Friday at the Jackson Hole Symposium – a virtual meeting of the world’s top central bankers that begins Thursday.
Powell’s comments will be scrutinized for any sign of when the central bank will begin to reduce its support for the rapidly growing U.S. economy in 2021 by reducing its bond purchases.
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“The economy is now reaching the bar set by the Fed,” said Hugh Gimber, global markets strategist at JPMorgan Asset Management. “Jackson Hole is unlikely to be part of a formal cut announcement, but Powell’s remarks should always be optimistic.”
“With the recovery progressing strongly and the labor market gaining momentum, the US economy no longer needs the same support,” Gimber said. “The stock markets continue to encourage the amount of liquidity in the system, but the Fed will not be blind to the long-term risks of a policy that is too favorable for too long.”
US bond yields, which move in the opposite direction to prices, edged down on Wednesday as the main 10-year US Treasury yield edged down to 1.288%. The dollar index, however, rose 0.08% to 92.97.
Oil prices have risen sharply in recent days as coronavirus cases have declined in China, but declined slightly on Wednesday. Brent crude was down 0.27% to $ 70.22 per barrel, while WTI crude was down 0.27% to $ 67.36 per barrel.
In the cryptosphere, bitcoin retreated after crossing $ 50,000 for the first time since May. It was down 2.14% to $ 47,313 on Wednesday.
“The breakout failed to generate new momentum, which may suggest the rally is running on fumes,” said Craig Erlam, senior market analyst at the Oanda trading platform. “That’s not a bad thing in the long run, with a lot of optimism about cryptos.”