Wall closed with strong gains, with an eye on Jackson Hole

The main stock indexes on Wall Street moved strongly higher on Thursday, as investors awaited Federal Reserve Chairman Jerome Powell’s address to the annual conference of central bankers in Jackson Hole to form a view on the line that the Fed will follow in the fight against inflation, but also whether it will affect the American and global economy.

The indices thus tried to “build” upward momentum again on Wednesday’s small gains, which broke the three-day losing streak, having on their side on Thursday some positive macroeconomic messages that downgrade to a degree the concerns about an upcoming recession in the US .

On the board, the industrialist Dow Jones gained 322.55 points, or 0.98%, to 33,291.78 points, with the broadest S&P 500 to gain 60.33 points or 1.46%, to 4,201.10 points, while the technological Nasdaq led the gains, up 207.74 points, or 1.67%, to 12,639.26.

Even so, however, for now the major indexes remain on a losing track for the week.

The materials, communications and financial services sectors stood out among the S&P 500, with investors turning away from the consumer staples and utilities sectors.

Snowflake shares jump 23.1% after earnings beat expectations

Elsewhere, Peloton stock fell 18.3% after reporting earnings that missed forecasts.

All eyes of investors and traders are already on Jackson Hole, with the Fed chairman’s speech scheduled for Friday. Their hope is that Powell will give signs of when the cycle of monetary tightening by the Fed will close.

“The market is trying to decide whether we’re in the middle or the end of the cycle,” says Liz Young, chief investment strategist at SoFi.

July’s rally, which lifted US benchmarks out of bear market territory, was largely fueled by investors’ interpretation of Powell’s comments following the latest 75bp rate hike. that the bank will now slow down.

That has been increasingly questioned recently, with investors hoping to get some fresh clues from the head of the world’s most powerful central bank.

“People are gradually coming back into the market on the basis that a lot of the bad news has already been priced in,” said Brian Vendig, president of MJP Wealth Advisors.

“Investors will be really anxious to hear whether or not the Fed will remain blind to raising interest rates and fighting inflation at the expense of economic growth,” he adds.

For his part, however, the president of the Federal Reserve Bank of Atlanta, Rafael Bostic, said today that he has not yet decided whether the Fed should raise interest rates by 50 basis points or 75 points.

In a similar vein, Kansas City Federal Reserve President Esther George warned today that it is still too early to tell whether the slowdown in inflation in July is the start of a broader trend in prices.

The president of the branch of St. Louis Federal Reserve Governor James Bullard also said Thursday that he expects high inflation to prove more persistent than many expect and that interest rates at their current levels may not be high enough to begin to stem the upward trend in prices.

Among the Dow’s 30 stocks, 28 were positive and only 2 were negative. The gains were led by those of Boeing, Intel and Dow Inc., while losses were recorded only by Salesforce and Procter&Gamble.

Smaller than expected drop in US GDP

Macro news was otherwise positive today, as a revised estimate of second-quarter GDP showed a smaller contraction than initially reported, while new jobless claims fell to a six-month low.

Specifically, US GDP fell 0.6% in the previous quarter, instead of a previously reported 0.9%, while analysts had expected the revised reading to show a decline of 0.8%.

Meanwhile, 243,000 new jobless claims were filed in the week ended August 20, down 2,000 from the week before, while analysts had expected an increase of 252,000.