US Stocks Fall for Fifth Day on Fed Policy Jitters
Investors grow cautious ahead of Fed Chair Powell's pivotal Jackson Hole speech, anticipating signals on rate cuts and inflation strategy.
U.S. stock markets extended their losing streak to a fifth consecutive session on Thursday, as investor anxiety mounted ahead of a crucial speech by Federal Reserve Chair Jerome Powell. The S&P 500 slipped 0.4% to close at 6,370.17, while the Dow Jones Industrial Average fell 0.3%. The tech-heavy Nasdaq Composite saw the steepest decline, dropping 0.7% as investors took profits and weighed valuation concerns.
The widespread caution comes as Wall Street braces for Powell’s address at the annual Jackson Hole economic symposium on Friday. The speech is highly anticipated for any signals regarding a potential interest rate cut in September, a move markets have been pricing in. However, investors are also focused on potential shifts in the central bank's long-term strategy. Powell is expected to review the Fed’s policy framework, with speculation that he may signal a move away from the 'flexible average inflation targeting' adopted in 2020 and toward a more preemptive stance against rising prices.
This policy uncertainty has unsettled a market that, until last week, was trading at all-time highs. While the S&P 500 remains up more than 8% for the year, underlying market health indicators are showing signs of stress. According to analysis from Morningstar, several internal metrics such as market breadth oscillators have flashed 'sell' signals, suggesting conviction is waning despite the strong year-to-date performance. All eyes are now on Jackson Hole, with Powell's commentary expected to set the market's tone heading into September.