Wall Street’s main indexes closed on a subdued note on Monday, after struggling for direction while investors awaited a raft of corporate earnings reports from major retailers for more signs about the state of the economy and the Federal Reserve’s annual symposium in Jackson Hole.
Walmart, Home Depot and Target, among others, are set to report results this week and are likely to indicate how trade uncertainty and inflation expectations have affected U.S. consumers. Markets also hope that the Fed’s Jackson Hole, Wyoming, conference between August 21 and 23, where Fed Chair Jerome Powell is expected to speak, could offer more clarity on the economic outlook and the central bank’s policy framework.
“It’s a quiet day, with investors getting ready for things to come,” said Jed Ellerbroek, portfolio manager at Argent Capital. “The most important event is Powell’s speech, as we expect updated thoughts about how the Fed is viewing this economic environment where inflation is at a fairly high level while unemployment seems to have a rising trend.” Data on Friday showed that while retail sales were increasing broadly as anticipated, consumer sentiment overall had taken a hit from mounting inflation fears. On Monday, the National Association of Home Builders/Wells Fargo Housing Market Index fell to the lowest reading since December 2022.
Wall Street’s main indexes rallied over the past two weeks, with the blue-chip Dow hitting an intraday record high on Friday, aided by interest rate cut expectations and a better-than-expected earnings season despite an uncertain trade environment. On the geopolitical front, U.S. President Donald Trump and Ukrainian President Volodymyr Zelenskiy met to discuss the future of the war in Ukraine, days after Trump’s summit with Russian President Vladimir Putin which yielded no concrete outcome. Trump said he would call Putin and that it was possible the three leaders could hold a meeting.
According to preliminary data, the S&P 500 lost 0.69 points, or 0.01%, to end at 6,449.24 points, while the Nasdaq Composite gained 6.80 points, or 0.03%, to 21,629.77. The Dow Jones Industrial Average fell 34.61 points, or 0.08%, to 44,911.51.
Investors continue to price in a 25-basis-point cut from the Federal Reserve next month, although they have lowered their expectations for another rate cut this year, according to data compiled by LSEG. Recent data has also suggested that while U.S. tariffs have not filtered in to headline consumer prices yet, weakness in the jobs market could nudge the central bank to take a more dovish stance. Intel shares fell after a Bloomberg report said the Trump administration is in talks to take a 10% stake in the chipmaker. Dayforce jumped after a report said private equity firm Thoma Bravo was in talks to acquire the human resources management software firm. Solar stocks including SunRun and First Solar gained after the U.S. Treasury Department unveiled new federal tax subsidy rules for solar and wind projects, which were less strict than investors had feared.
(With agency inputs from Reuters)
