Stocks edged higher in the balmy weather trading as traders mulled a slew of economic data and anticipated the annual meeting of central bankers in Jackson Hole, Wyoming.
Stocks have been mostly lower in recent sessions as investors await Federal Reserve Chairman Jerome Powell’s speech in Wyoming on Friday.
Some anticipate him to make the case for continuing to raise interest rates to combat decades-long high inflation, a tactic that could derail the rally that began in mid-June. Some other reason for concern for investors is a significant steady decline in China’s economy.
Traders are betting on how Mr. Powell’s speech will come across and if it will signal further rate hikes. The S&P 500 picked up 0.8% in Thursday’s early trading, while the Nasdaq Composite Index managed to gain 1%. Dow Jones Industrial Average rose 0.4%.
Government bonds plateaued, with the 10-year US treasury yield rising to 3.110% from 3.105% on Wednesday. The decline in yields came after statistics suggested that the US economy plummeted by 0.6% in the second half, a relatively small downturn than previously estimated.
China’s Downturn
Beijing’s stimulus initiatives have given some optimism that the second-largest country’s economic pullback will start to ease. Earlier in the week, the Chinese government officially launched a 19-point growth strategy, including $146 billion in stimulus financial support.
According to some experts, stocks are likely to experience more volatility following Mr. Powell’s speech. Even if it isn’t as bullish as the uber-hawks anticipate, it will be hawkish nonetheless.
The annual conference begins on Thursday. Mr. Powell will speak on Friday, and European Central Bank board member Isabel Schnabel will speak on Saturday.
Mr. Powell’s remarks will set the tone for the Fed’s next policy meeting on September 20-21, which also will presumably focus on the decision to raise interest rates by half a point or 0.75 percentage point.
Officials agreed last month that rates of interest would need to be raised further, but they were more cautious about the speed of future increases.
Analysts believe that thin summer investing may be causing overblown moves. Per the Dow Jones Market Data, only 8.84 billion shares of stocks traded on the New York Stock Exchange, the Nasdaq, and two smaller exchanges on Wednesday, the lowest volume since New Year’s Eve 2021.
Tesla shares fell 0.6% after the company’s shares were split three to one late Wednesday. Peloton Interactive fell 20% after the pandemic darling reported a $1.2 billion quarterly loss.
Unemployment Claims
In other economic news, new claims for unemployment benefits fell to 243,000 last week, from a revised 245,000 the week before, according to labor-market data.
Commodities
In commodities, Europe’s reference natural-gas price increased by 6%, attempting to put the market on track for a record close and putting additional pressure on the region’s industrial sector.
Overseas Securities Exchanges
Hong Kong’s Hang Seng rose 3.6% in overseas markets. According to traders and investors, wide – spread suspicion about an impending audit agreement between US and Chinese regulators aided the rise of dual-listed stocks such as Alibaba Group and JD.com, which rose nearly 6% and 7%, respectively.
The Hang Seng Tech index has dropped nearly 25% this year, owing in part to fears that companies would be barred from American exchanges if their audit records could not be inspected by US regulators for three years in a row.
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