September S&P 500 E-Mini futures (ESU25) are trending up +0.26% this morning, attempting to snap a five-session losing streak, with focus squarely on a highly anticipated speech from Federal Reserve Chair Jerome Powell.
In yesterday’s trading session, Wall Street’s major indices ended in the red. Renewable energy stocks slumped after President Trump said in a social media post that the U.S. would not approve solar or wind power projects, with First Solar (FSLR) sinking about -7% to lead losers in the S&P 500 and Sunrun (RUN) sliding more than -4%. Also, Walmart (WMT) fell over -4% and was the top percentage loser on the Dow after the world’s largest retailer posted weaker-than-expected Q2 adjusted EPS. In addition, Coty (COTY) tumbled more than -21% after the cosmetics company posted an unexpected quarterly loss and projected that steep sales declines would continue in FQ1. On the bullish side, Nordson (NDSN) rose +3% after the manufacturing company reported better-than-expected FQ3 results and raised its full-year earnings guidance.
Economic data released on Thursday showed that the U.S. S&P Global manufacturing PMI unexpectedly rose to a 3-year high of 53.3 in August, stronger than expectations of 49.7. Also, U.S. existing home sales unexpectedly rose +2.0% m/m to 4.01 million in July, stronger than expectations of 3.92 million. At the same time, the number of Americans filing for initial jobless claims in the past week rose by +11K to a 2-month high of 235K, compared with the 226K expected.
“The great PMI numbers have made it more difficult for Powell to pivot to employment weakness… No fun in the equity space either,” said Andrew Brenner at NatAlliance Securities.
Cleveland Fed President Beth Hammack said on Thursday that she would not support lowering interest rates if policymakers were making a decision tomorrow. “We have inflation that’s too high and has been trending upwards over the past year,” Hammack said. Also, Atlanta Fed President Raphael Bostic said he still views just one rate cut as appropriate for this year, but added that the labor market’s trajectory is “potentially troubling” and warrants close attention. In addition, Kansas City Fed President Jeffrey Schmid said that inflation risks still outweigh risks to the labor market. Finally, Chicago Fed President Austan Goolsbee said that although some recent inflation data have come in better than expected, he hopes one “dangerous” reading proves to be just a temporary blip.
Meanwhile, U.S. rate futures have priced in a 69.3% chance of a 25 basis point rate cut and a 30.7% chance of no rate change at September’s policy meeting.
Today, all eyes are focused on Fed Chair Jerome Powell’s speech at the central bank’s annual Economic Policy Symposium in Jackson Hole, Wyoming. Investors are watching to see whether Powell provides any signal about what the Fed might do at the September meeting. However, it may be difficult for him to give a clear signal, especially with some of his colleagues still not in a rush to cut rates.
A survey conducted by 22V Research revealed that 43% of investors expect the market reaction to Jackson Hole to be “neutral,” 39% anticipate “risk-off,” and only 18% expect “risk-on.”
“Key to the Jackson Hole symposium will be whether Fed Chair Powell updates his monetary policy reaction function. In our base case, Powell sticks to his reaction function laid out in July. We think this would surprise markets hawkishly,” said Calvin Tse at BNP Paribas.
The U.S. economic data slate is empty on Friday.
In the bond market, the yield on the benchmark 10-year U.S. Treasury note is at 4.340%, up +0.21%.
The Euro Stoxx 50 Index is up +0.31% this morning, edging closer to an all-time high, with focus firmly on Fed Chair Jerome Powell’s annual speech at the Jackson Hole symposium. Chemical stocks led the gains on Friday, lifted by a more than +5% advance in Akzo Nobel (AKZA.NA) after activist investor Cevian Capital took a 3% stake in the paints maker. Automobile stocks also gained ground. The benchmark index is on track to post its third consecutive weekly gain. Final data from the statistics office Destatis released on Friday showed that Germany’s economy contracted more than initially estimated in the second quarter, with industry performing worse than expected as U.S. tariffs weighed on exports. Separately, data showed that France’s business climate indicator held steady in August. Meanwhile, the European Union pressed for lower U.S. tariffs on select sectors after Brussels and Washington issued the long-awaited joint statement sealing the trade deal they reached nearly a month ago. The EU said on Thursday it would work to ensure that lower tariffs on car exports are applied retroactively from August 1st while continuing to push for a preferential tariff on wine and spirits. In other news, UBS Global Wealth Management has projected a 3% contraction in the Eurozone’s corporate earnings growth this year, compared to a prior estimate of flat growth, as weak second-quarter results and currency headwinds threaten to weigh on profits. In other corporate news, Hensoldt AG (HAG.D.DX) rose over +3% after Citi upgraded the stock to Neutral from Sell.
Germany’s GDP and France’s Business Survey data were released today.
The German GDP has been reported at -0.3% q/q and +0.2% y/y in the second quarter, weaker than expectations of -0.1% q/q and +0.4% y/y.
The French August Business Survey came in at 96, in line with expectations.
Asian stock markets today closed in the green. China’s Shanghai Composite Index (SHCOMP) closed up +1.45%, and Japan’s Nikkei 225 Stock Index (NIK) closed up +0.05%.
China’s Shanghai Composite Index closed sharply higher today, hitting a fresh 10-year high, as renewed tech optimism added further momentum to the ongoing rally. Semiconductor stocks jumped on Friday after The Information reported that Nvidia had told some component suppliers to halt production tied to the H20 AI chip. The directive comes just weeks after Beijing urged local companies to avoid using the H20 due to alleged security concerns. The news boosted hopes that more of the chips used in China will be produced locally. Analysts noted that another boost for chip stocks on Friday came from Chinese AI startup DeepSeek, which hinted in a technical paper that the next generation of AI chips from Chinese companies is on the way. Meanwhile, the benchmark index posted its best weekly gain in nearly nine months. Chinese shares have been climbing in recent weeks, supported by easing trade tensions between the world’s two largest economies and improved liquidity conditions, as well as investors rotating out of bonds and into stocks. Goldman Sachs analysts said, “For now, FOMO sentiment still dominates, leading to buy-the-dip flow on every market correction.” In other news, China on Friday issued interim rules for overseeing and managing its rare earths mining, smelting, and separation activities. In corporate news, Li Ning surged over +8% in Hong Kong after the sportswear maker posted better-than-expected first-half net income.
Japan’s Nikkei 225 Stock Index closed just above the flatline today as investors digested fresh inflation data from the country and braced for Fed Chair Jerome Powell’s speech at the Jackson Hole symposium. Insurance and bank stocks outperformed on Friday as Japanese government bond yields climbed following stronger-than-expected domestic inflation data and tracking a rise in U.S. Treasury yields overnight. Higher bond yields improve the outlook for revenue from investment and lending. Still, the benchmark index notched a weekly loss. Government data released on Friday showed that Japan’s core inflation slowed in July but remained well above the Bank of Japan’s 2% target, reinforcing market expectations that the central bank will raise its benchmark interest rate again this year. The data came about a week after U.S. Treasury Secretary Scott Bessent took the unusual step of criticizing the BOJ’s handling of inflation, saying that “they’re behind the curve.” With trade uncertainty easing somewhat after a deal between Tokyo and Washington in late July, market participants anticipate the BOJ to hike its policy rate in the near term as persistent cost pressures weigh on consumers’ wallets. Capital Economics’ senior APAC economist, Abhijit Surya, wrote in a note, “With the economy holding up well and tariff-related uncertainties abating, the Bank should feel comfortable with resuming policy normalization before long.” BOJ Governor Kazuo Ueda is attending the Kansas City Fed’s conference in Jackson Hole, Wyoming, this weekend. Investors will be watching for any signals from the gathering that could point to the potential timing of another BOJ rate hike. The Nikkei Volatility Index, which takes into account the implied volatility of Nikkei 225 options, closed up +0.20% to 25.11.
The Japanese July National Core CPI rose +3.1% y/y, stronger than expectations of +3.0% y/y.
Pre-Market U.S. Stock Movers
Zoom Communications (ZM) climbed over +5% in pre-market trading after the videoconferencing platform posted upbeat Q2 results and raised its full-year guidance.
Ulta Beauty (ULTA) rose over +1% in pre-market trading after Barclays upgraded the stock to Overweight from Equal Weight with a price target of $589.
Nvidia (NVDA) fell more than -1% in pre-market trading after multiple reports said that the chipmaker had told some component suppliers to halt production tied to the H20 AI chip.
Intuit (INTU) slumped over -5% in pre-market trading after the company issued tepid FY26 guidance.
Workday (WDAY) slid more than -5% in pre-market trading after the human-resources software company provided slightly weaker-than-expected Q3 subscription revenue guidance and announced an agreement to acquire Paradox.
You can see more pre-market stock movers here
Today’s U.S. Earnings Spotlight: Friday – August 22nd
BJ’s Wholesale Club (BJ), RLX Technology (RLX), Buckle (BKE).
On the date of publication, Oleksandr Pylypenko did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. This article was originally published on Barchart.com
