Nasdaq 100, Dow Jones 30 Forecast: Stocks Mixed as Treasury Yields Rise Post Jackson Hole Remarks.

Highlights

• U.S. stocks waver following Powell’s remarks at Jackson Hole; Dow recovers marginally.
• Treasury yields signal potential rate hikes, 2-year yield sees significant surge.
• Despite reduced inflation, Powell and the Fed remain vigilant; further rate hikes expected.

U.S. Stocks React to Central Bank’s Indications

U.S. stocks presented a mixed bag, following the significant fall on Friday in response to Federal Reserve Chairman Jerome Powell’s speech at Jackson Hole. The Dow Jones Industrial Average briefly recouped some of its losses, rising by 14.55, after having been down by 63 points. Meanwhile, the S&P 500 and the Nasdaq Composite faced declines of 0.22% and 0.48% respectively.

Treasury Yields Rise, Hinting at More Rate Hikes

In the aftermath of Powell’s speech, U.S. Treasury yields experienced an upward shift. The 10-year Treasury note settled at 4.275%, and the 30-year Treasury bond at 4.319%. Notably, the 2-year Treasury yield surged to 5.08%, marking its highest since July 6. As yields and prices share an inverse relationship, Powell’s remarks about the Fed’s preparedness to increase rates to combat inflation were a key influencer.

Inflation Still a Concern for Powell

Powell expressed ongoing concerns regarding inflation levels. Although there’s been a reduction, inflation rates remain higher than desired. The Fed’s stance remains firm, with a willingness to raise rates until a sustainable decrease in inflation aligns with their objectives. David Wagner of Aptus Capital Advisors echoed the sentiment that expectations for near-term rate cuts by the Federal Reserve might be misplaced.

Recap on the Jackson Hole Economic Symposium

The Jackson Hole Economic Symposium, hosted in Wyoming, serves as a confluence point for global central bankers and key financial stakeholders. The previous year’s meeting saw stocks tumble after Powell’s assertive speech on combating inflation. This year, the symposium’s theme revolves around “structural shifts in the global economy.”

Wall Street’s Performance Amid Global Events

Prior to the Jackson Hole speech, Wall Street had experienced a challenging session. Both the S&P 500 and Nasdaq couldn’t sustain an initial rally induced by Nvidia’s robust earnings, recording their most significant single-day losses since early August and March respectively. However, both indices still showcased potential for ending the week on a positive note.

Short-term forecast

Given the current sentiments and the Fed’s assertive stance on inflation, the market outlook leans bearish.