The US stock futures traded with mild losses on Friday, 28 August, as traders awaited fresh signals on the Federal Reserve’s policy path from the Jackson Hole symposium.
Futures tied to S&P 500 fell marginally, while Nasdaq-100 futures lost 0.3%. Dow Jones Industrial Average futures bucked the trend, adding 49 points, or 0.1%.
The cautious start follows heavy buying in chip and software stocks in the previous session, sparked by blockbuster numbers from Nvidia and Salesforce, which brought much-needed optimism to Wall Street.
Nvidia’s outlook offered fresh evidence that spending on AI infrastructure remains robust, easing concerns that the investment boom is losing steam. The upbeat forecast comes as investors increasingly scrutinize whether heavy AI spending can sustain earnings growth after a volatile stretch for technology stocks.
In addition, Salesforce’s strong guidance also drove renewed buying in software stocks, which investors had largely ignored earlier due to AI-related concerns. The latest guidance gave investors fresh evidence that its AI strategy is beginning to translate into meaningful recurring revenue.
Both Nvidia and Salesforce were trading higher in pre-market trade after gaining 8% and 23%, respectively, in the previous session. Other stocks, such as Gap, gained 15% after announcing its second-quarter numbers. On the flip side, Marvell Technology slid 9% to $221.
Meanwhile, Treasury yields ticked higher following a report on unemployment benefit applications, suggesting that the US job market remains solid.
On Thursday, the S&P 500 gained 0.7%, the Dow rose 0.2%, and the Nasdaq climbed 1.6%, putting all three major indexes on track for weekly gains.
Kevin Warsh’s speech in focus
Kevin Warsh is set to deliver his first major speech as Fed chair on Friday. The address could offer fresh clues on the policy outlook after he faced criticism over a lack of clarity regarding his views on the economy and the future path of interest rates, which led to a sharp spike in long-term yields.
The combination of higher-than-expected PCE and resilient economic growth has boosted expectations of another Fed rate hike before the end of 2026.
Traders are currently pricing in no change to borrowing costs in September but see a 74% chance that the Fed will raise interest rates by at least 25 basis points by December.
The Federal Reserve has been struggling to bring inflation back to its 2% target. Inflation had crept higher after the US imposed a wide range of tariffs globally and climbed further as the Iran war disrupted global oil shipments through the Strait of Hormuz.
Crude oil prices remain volatile
Crude oil prices remained volatile in trade, with the trend largely tilted towards the downside, as traders bet that supply disruptions in the Strait of Hormuz could ease following an agreement between Iran and Oman on managing the key waterway.
In addition, the US announcement that it would increase economic pressure on Iran rather than launch further military attacks offered some hope that the conflict in the region could pause for some time.
Brent crude slipped to around $88 per barrel in trade and was on track to end the week down more than 6%. The decline would end its three-week winning streak. WTI crude futures also edged lower in trade and were down more than 4% for the week.
Disclaimer: We advise investors to check with certified experts before making any investment decisions.
