The S&P 500 closed lower on Thursday, pressured by rising Treasury yields as investors adopted a cautious stance ahead of Federal Reserve Chair Jerome Powell’s highly anticipated speech at Jackson Hole. The index fell 0.8%, while the Dow Jones Industrial Average dropped 177 points, and the Nasdaq Composite slid 1.6%.
Powell’s Speech and Rising Yields Weigh on Markets
Wall Street’s losses were driven by rising Treasury yields, with investors anxiously awaiting Powell’s remarks, expected to reinforce the Fed’s dovish stance and possibly signal a September rate cut. However, some uncertainty remains as to whether Powell will explicitly indicate such a move. Kansas City Fed President Jeffrey Schmid added to the caution, stating more economic data is needed before supporting any rate cuts.
Economic Data Raises Concerns
Earlier on Thursday, data revealed a rise in jobless claims, adding to worries about a cooling U.S. labour market. This followed a significant revision in payroll data, showing the U.S. economy created 818,000 fewer jobs than initially reported through March 2024. Additionally, manufacturing activity slipped more than expected, further fueling concerns about economic momentum.
