September S&P 500 E-Mini futures (ESU25) are down -0.22%, and September Nasdaq 100 E-Mini futures (NQU25) are down -0.10% this morning, pointing to further losses on Wall Street, while investors await the Federal Reserve’s gathering at Jackson Hole, U.S. business activity data, and an earnings report from retail giant Walmart.
The minutes of the Federal Open Market Committee’s July 29-30 meeting, released Wednesday, showed that most officials emphasized the risk of inflation as outweighing concerns about the labor market. Policymakers acknowledged concerns about higher inflation and weaker employment, but “a majority of participants judged the upside risk to inflation as the greater of these two risks,” according to the FOMC minutes. Also, officials debated whether tariffs would cause a one-time price increase or a more lasting inflation shock. “Several participants emphasized that inflation had exceeded 2% for an extended period and that this experience increased the risk of longer-term inflation expectations becoming unanchored in the event of drawn-out effects of higher tariffs on inflation,” the minutes said. In addition, many officials noted that it might take some time before the full impact of tariffs is reflected in consumer goods and services prices.
In yesterday’s trading session, Wall Street’s three main equity benchmarks closed mixed, with the S&P 500 dropping to a 1-1/2-week low and the Nasdaq 100 falling to a 2-week low. The Magnificent Seven stocks fell, with Tesla (TSLA) and Amazon (AMZN) sliding over -1%. Also, chip stocks slumped, with Intel (INTC) sinking about -7% to lead losers in the S&P 500 and Nasdaq 100, and Micron Technology (MU) slipping nearly -4%. In addition, Target (TGT) dropped more than -6% after the retailer appointed veteran Michael Fiddelke as its next chief executive officer, disappointing investors who had been hoping for an external hire to provide a fresh perspective. On the bullish side, Analog Devices (ADI) climbed over +6% and was the top percentage gainer on the S&P 500 and Nasdaq 100 after the semiconductor company posted upbeat FQ3 results and issued above-consensus FQ4 guidance.
“Today feels like a test for the dip-buyers with data on PMIs on Thursday and Federal Reserve Chair Jerome Powell at Jackson Hole may prove to be market movers/narrative changers,” Andrew Tyler, head of global market intelligence at JPMorgan, wrote in a note to clients on Wednesday.
The Kansas City Fed’s annual Economic Policy Symposium kicks off today in Jackson Hole, Wyoming. Chair Jerome Powell, in remarks on Friday, is expected to outline the central bank’s new policy framework. Investors are watching to see whether Powell confirms the market’s pricing for a September rate cut or pushes back by stressing that incoming data before the next policy meeting could change the outlook. They’re also seeking signals about the longer-term path of Fed cuts heading into next year.
U.S. rate futures have priced in an 81.2% probability of a 25 basis point rate cut and an 18.8% chance of no rate change at the next FOMC meeting in September.
On the economic data front, all eyes are focused on S&P Global’s flash U.S. purchasing managers’ surveys, set to be released in a couple of hours. They will give an up-to-date snapshot of how tariffs have impacted both activity and prices. Economists, on average, forecast that the August Manufacturing PMI will come in at 49.7, compared to last month’s value of 49.8. Also, economists expect the August Services PMI to be 54.2, compared to 55.7 in July.
Investors will also focus on U.S. Existing Home Sales data. Economists foresee this figure coming in at 3.92 million in July, compared to 3.93 million in June.
The U.S. Philadelphia Fed Manufacturing Index will be reported today. Economists anticipate the Philly Fed manufacturing index to stand at 6.8 in August, compared to last month’s value of 15.9.
U.S. Initial Jobless Claims data will be released today. Economists estimate this figure will come in at 226K, compared to last week’s number of 224K.
The Conference Board’s Leading Economic Index for the U.S. will be released today as well. Economists expect the July figure to drop -0.1% m/m, compared to the previous number of -0.3% m/m.
On the earnings front, retail giant Walmart (WMT), along with notable tech players such as Intuit (INTU), Workday (WDAY), and Zoom Video (ZM), are set to report their quarterly figures today. Investors will keep a close eye on Walmart’s earnings following a mixed bag of results from retailers earlier this week.
In addition, market participants will be anticipating a speech from Atlanta Fed President Raphael Bostic.
In the bond market, the yield on the benchmark 10-year U.S. Treasury note is at 4.309%, up +0.26%.
The Euro Stoxx 50 Index is down -0.31% this morning, snapping a three-day winning streak, with investors shifting their focus to the Fed’s Jackson Hole symposium. Chemical stocks underperformed on Thursday, while defense stocks regained some ground. The benchmark index retreated even after a survey showed that European business activity continued to demonstrate resilience into the second half of the year, with the manufacturing sector in August returning to expansion for the first time in over three years and the dominant services sector continuing to expand. Cyrus de la Rubia, chief economist at Hamburg Commercial Bank, said, “Things are getting better. Economic activity has picked up in both manufacturing and services. Overall, we’ve seen a slight acceleration in growth over the past three months.” Meanwhile, diplomatic efforts aimed at ending the war in Ukraine continue to make progress. U.S. Vice President JD Vance said negotiations are centered on security guarantees for Ukraine and on territory Russia seeks to control, including areas of Ukraine that Russia isn’t occupying. In other news, a Reuters poll showed that European shares are projected to finish the year slightly above current levels, with support from looser fiscal and monetary policy being kept in check by uncertainties surrounding U.S. tariffs. In corporate news, WH Smith Plc (SMWH.LN) plummeted over -37% after the British travel retailer cut its full-year profit guidance for its North America division due to an accounting error. At the same time, Aegon (AGN.NA) climbed more than +7% after the Dutch insurance and asset-management company doubled its share buyback to 400 million euros ($466.32 million) and said it would increase its interim dividend.
Eurozone’s Composite PMI (preliminary), Eurozone’s Manufacturing PMI (preliminary), and Eurozone’s Services PMI (preliminary) were released today.
Eurozone’s August Composite PMI has been reported at 51.1, stronger than expectations of 50.7.
Eurozone’s August Manufacturing PMI came in at 50.5, stronger than expectations of 49.5.
Eurozone’s August Services PMI arrived at 50.7, weaker than expectations of 50.8.
Asian stock markets today settled mixed. China’s Shanghai Composite Index (SHCOMP) closed up +0.13%, and Japan’s Nikkei 225 Stock Index (NIK) closed down -0.65%.
China’s Shanghai Composite Index closed slightly higher today, holding at a 10-year high, as investors looked for fresh catalysts to extend the rally. Fintech and stablecoin-related stocks climbed on Thursday after Reuters reported that China is considering allowing the use of yuan-backed stablecoins for the first time to promote wider global adoption of its currency. China’s plan to allow the use of stablecoins, if approved, would represent a significant shift in its stance toward digital assets. Chinese shares have been climbing in recent weeks, supported by easing trade tensions between the world’s two largest economies and improved liquidity conditions, as well as investors rotating out of bonds and into stocks. Strong retail participation also drove gains, with A-share trading volumes rising 80% from a year earlier. Meanwhile, China’s 30-year government bond yield climbed to its highest level this year on Thursday as a selloff deepened amid a rally in local equities. China’s bond selloff underscores rising optimism about the nation’s economy, driven by the launch of large-scale projects to boost growth and Beijing’s stepped-up efforts to fight deflation. In corporate news, Baidu fell over -2% in Hong Kong after the search engine giant posted weaker-than-expected quarterly revenue.
Japan’s Nikkei 225 Stock Index closed lower today, falling for a third session, as investors continued taking profits from a recent rally. Pharmaceutical and automobile stocks led the declines on Thursday. Technology stocks also slumped, tracking overnight losses in their U.S. peers. Preliminary business surveys released on Thursday showed that Japan’s manufacturing activity edged up in August but remained in contraction territory for the second straight month as U.S. tariffs weighed on overseas demand, while the country’s services sector continued to expand, though at a slower pace. Meanwhile, Japanese government bonds remained under pressure on Thursday, with the 10-year yield climbing to a 17-year high, as a weaker-than-expected outcome of a liquidity-enhancing auction dampened sentiment. In other news, Japanese stocks saw the largest weekly foreign inflows in more than four months during the week of August 16th, fueling a record-setting rally on expectations of U.S. rate cuts, while upbeat domestic GDP data further lifted sentiment. Foreigners bought a net 1.16 trillion yen ($7.87 billion) worth of Japanese stocks, according to data from Japan’s Ministry of Finance. Investors now turn their attention to Japan’s national core CPI data for July, scheduled for release on Friday. Any signs of persistently strong inflation will likely heighten expectations that the Bank of Japan will raise rates in the near term. The Nikkei Volatility Index, which takes into account the implied volatility of Nikkei 225 options, closed down -0.36% to 25.06.
The Japanese August au Jibun Bank Manufacturing PMI (preliminary) stood at 49.9, stronger than expectations of 49.2.
Pre-Market U.S. Stock Movers
Coty (COTY) plunged more than -22% in pre-market trading after the cosmetics company posted an unexpected quarterly loss and projected that steep sales declines would continue in FQ1.
Monday.com (MNDY) fell over -2% in pre-market trading after BofA downgraded the stock to Neutral from Buy.
Nordson (NDSN) climbed over +5% in pre-market trading after the manufacturing company reported better-than-expected FQ3 results and raised its full-year earnings guidance.
CoreWeave (CRWV) gained more than +3% in pre-market trading after both Arete Research and H.C. Wainwright upgraded the stock to Buy.
Hewlett Packard Enterprise (HPE) rose nearly +3% in pre-market trading after Morgan Stanley upgraded the stock to Overweight from Equal Weight with a price target of $28.
You can see more pre-market stock movers here
Today’s U.S. Earnings Spotlight: Thursday - August 21st
Walmart (WMT), Intuit (INTU), Workday (WDAY), Ross Stores (ROST), Zoom Video (ZM), Full Truck Alliance Co (YMM), Bilibili (BILI), Miniso (MNSO), Marzetti (MZTI), OSI Systems (OSIS), Navios Maritime Unit (NMM), ScanSource (SCSC), Hovnanian Enterprises (HOV), Canadian Solar Inc (CSIQ), LSI Industries (LYTS), Yirendai Ltd (YRD), Dingdong (DDL), Selectquote (SLQT), Twin Disc (TWIN).
On the date of publication, Oleksandr Pylypenko did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
