S&P 500: Bitcoin Pulls Back, Traders Trim Risk Ahead of Powell and Retail Data

Stocks Steady as Traders Brace for Powell’s Jackson Hole Speech and Retail Earnings

U.S. equities hovered near flatlines Monday, with traders adopting a cautious stance ahead of a critical speech by Federal Reserve Chair Jerome Powell and a slew of upcoming retail earnings. The Dow Jones Industrial Average edged up 39 points, or 0.09%, while the S&P 500 dipped 0.02%, and the Nasdaq lost 0.12%.

Markets paused after notching two consecutive weeks of gains, with sentiment now turning toward clues from central bank policymakers gathering at Jackson Hole. Fed funds futures show traders pricing in an 85% probability of a September rate cut, according to CME’s FedWatch tool, raising the stakes for Powell’s upcoming remarks.

Will Retail Earnings Confirm Strength in the Consumer Sector?

Big-box names including Home Depot, Lowe’s, Walmart, and Target are set to report this week, offering insight into the health of the U.S. consumer. Analysts are closely watching for signs of margin pressure, shifting spending patterns, and inventory management strategies as inflationary pressures ease and student loan payments resume.

Consumer staples eked out a 0.2% gain, while discretionary shares were unchanged. The performance of retail bellwethers could influence broader equity sentiment, particularly if consumer resilience remains intact.

How Are Sectors Performing as Rate Cut Bets Build?

Sector performance was mixed. Health care led with a 0.67% gain, helped by a 4% pop in Novo Nordisk after its Wegovy obesity drug received accelerated FDA approval for treating a serious liver condition. Industrials rose 0.23%, while financials and utilities each gained 0.03%.

Technology slipped 0.06% and communication services dropped 0.79%, showing signs of rotation out of growth stocks as rate cut bets firm. Energy and real estate also declined, down 0.34% and 0.25%, respectively, despite broader optimism over easing monetary policy.

Crypto Pullback Weighs on Sentiment—What’s Behind the Selloff?

Bitcoin dropped 2% to $115,255 after hitting a new high of $124,496 last week. Ether fell 4% to $4,283. The broader crypto market saw over $500 million in forced liquidations, pressuring crypto-linked equities. Bitmine Immersion slid 6%, while SharpLink Gaming and Bullish each declined 3%.

The volatility in digital assets comes as traders reduce risk exposure ahead of macro catalysts, including Powell’s remarks and U.S. economic data later in the week.

Market Outlook: Focus Shifts to Jackson Hole and Consumer Trends

Traders remain tightly focused on Powell’s Jackson Hole speech for confirmation on the Fed’s rate path. A dovish tone could fuel further equity gains, particularly in small caps and rate-sensitive names.

However, softer retail earnings or hawkish commentary could curb recent momentum. Key support levels in the S&P 500 around 6,453.25 and 6371.00 and resistance at 6502.50 may be tested depending on the tone of economic data and earnings this week.

More Information in our Economic Calendar.