Equities Decline Deepens Ahead of Powell’s Speech Friday – US Market Wrap

Caution dominated on Wall Street ahead of Fed’s Powell’s speech, with equities falling and bond yields climbing as a key factory report raised concern that inflation pressures could dim the prospect for rate cuts.

The quickest growth in manufacturing since 2022 drove Treasuries lower, with 10-Yr yields up 4 BPS to 4.33%. Fed’s Hammack said she wouldn’t back easing if Fed officials had to decide tomorrow. The S&P 500 declined for a 5th straight day, its longest decline since January. Most big techs slid. Walmart plunged on a profit miss.

While statistics revealed an increase in unemployment claims, adding to concerns of a sluggish labour market, the strong factory purchasing managers index caused traders to reduce their bets on rate cuts. Money markets predicted a roughly 70% drop in September. A week ago, the odds were greater than 90%.

Central bankers and economists from all around the world have gathered in Jackson Hole, Wyoming, for the Federal Reserve’s economic symposium. The prestigious gathering in the Grand Teton mountains has served as a platform for major policy pronouncements.

Meanwhile, the Justice Department hinted at preparations to probe Fed Governor Lisa Cook, with a top official urging Powell to remove her from the board. Trump’s housing-finanee chief, Pulte, called for a probe over mortgage agreements she supposedly made in 2021.