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HomeFinance NewsReversal in Market Intensifies as Fed Chief Powell Delivers Speech

Reversal in Market Intensifies as Fed Chief Powell Delivers Speech

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Summary:
Dow Jones futures, along with S&P 500 futures and Nasdaq futures, remained stable after hours ahead of Federal Reserve Chief Jerome Powell’s speech at the Jackson Hole symposium. The stock market rally attempt faltered on Thursday, with major indexes reversing lower after hitting resistance near the 50-day line. Nvidia, along with several other AI stocks, erased initial gains following their earnings reports. Marvell Technology, Workday, and Intuit reported earnings after the close, with Marvell seeing a decline in its stock price while Workday experienced a rise and Intuit saw a slight decline.

In his speech, Powell is expected to signal patience and leave the door open for further rate hikes, while also pushing back against the prospects of rate cuts. The recent increase in 10-year Treasury yields has tightened market rates, reducing the need for rate hikes. However, Powell may highlight the challenges in bringing inflation back to 2%. His speech will be significant for rate hike expectations, with investors seeing a 20% chance of a rate hike in late September and a 45% chance by the November 1 meeting. Expectations of rate cuts have been pushed to next year.

The stock market rallied at the open but quickly reversed after hitting resistance at the 50-day line, with the Nasdaq showing the largest swing. The Dow Jones fell by 1.1%, the S&P 500 slumped by 1.35%, and the Nasdaq composite sold off by 1.9%. Growth ETFs, such as the Innovator IBD 50 ETF and the VanEck Vectors Semiconductor ETF, fell in response. Nvidia stock initially soared following its earnings report but ultimately closed up only 0.1%. Other AI stocks also turned negative after initial gains, with Marvell, Broadcom, Adobe, Palantir Technologies, C3.ai, and Super Micro Computer experiencing various degrees of decline.

Paragraph 1:
Dow Jones futures, as well as S&P 500 and Nasdaq futures, were relatively stable after hours as investors awaited Federal Reserve Chief Jerome Powell’s speech at the Jackson Hole symposium. The stock market rally attempt faltered on Thursday as major indexes reversed lower after hitting resistance near the 50-day line. Nvidia and several other AI stocks erased initial gains made on their blowout earnings reports. Marvell Technology, Workday, and Intuit also reported earnings after the close, with Marvell experiencing a decline in stock price, Workday seeing a rise, and Intuit recording a slight decline.

Paragraph 2:
In his speech, Powell is likely to signal patience and hint at the possibility of further rate hikes, while also pushing back against the prospects of rate cuts. The recent increase in 10-year Treasury yields has tightened market rates, reducing the need for official Fed rate hikes. However, Powell may highlight the challenges in bringing inflation back to the 2% target. His speech will be significant in shaping expectations for rate hikes, with a 20% chance of a hike in late September and a 45% chance by the November 1 meeting. Expectations of rate cuts have been pushed further into next year.

Paragraph 3:
The stock market opened higher but quickly reversed after hitting resistance at the 50-day line, with the Nasdaq showing the largest swing. The Dow Jones fell by 1.1%, the S&P 500 slumped by 1.35%, and the Nasdaq composite sold off by 1.9%. Growth ETFs, including the Innovator IBD 50 ETF and the VanEck Vectors Semiconductor ETF, declined in response. Nvidia stock initially surged following its earnings report but ultimately closed up only 0.1%. Other AI stocks also reversed after initial gains, with Marvell, Broadcom, Adobe, Palantir Technologies, C3.ai, and Super Micro Computer experiencing various degrees of decline.

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