The Big BulletStocks extend slide as markets brace for Powell’s Jackson Hole speech What happened: U.S. equities fell for a fifth straight session, with the S&P 500 logging a five-day losing streakahead of today’s remarks from Federal Reserve Chair Jerome Powell. Trading was choppy as investors reassessed the odds of near-term rate cuts. Crypto also weakened, with Bitcoin dropping almost 5% after setting a record high last week. Treasury yields were little changed intraday but remained in focus. Sector leadership rotated again, pressuring mega-cap tech while defensives held up better. Positioning was cautious into the policy event. Liquidity was thinner than usual for a summer week. Headlines around central bank expectations set the tone all day.
Why it matters: Powell’s message can reset market pricing for the path of interest rates, which drives valuations across stocks, bonds, and crypto. A more patient Fed would support risk assets; a tighter stance could extend the selloff. Recent commentary from regional officials, including Kansas City Fed President Jeff Schmid signaling hesitation about a September cut, has already nudged expectations. At the same time, elevated tech valuations leave the market sensitive to even small shifts in discount-rate assumptions. A weak tape into a major speech can amplify moves if guidance surprises. Crypto’s decline underscores how rate narratives now ripple beyond equities. Bond investors also lean on Jackson Hole signals to gauge duration risk. Put together, the communication risk is high for both direction and volatility. What’s next: Powell is set to deliver his keynote at Jackson Hole today, and Wall Street will parse every line for clues on cuts, inflation, and balance-sheet policy. Traders will watch whether he validates or pushes back on market odds for easing this fall. Follow-through in major indexes will hinge on breadth and leadership, not just the megacaps. Short-term support and resistance levels may be tested quickly if guidance diverges from consensus. Bond-market reaction will help confirm the equity move’s durability. Crypto’s tone could shift if real-rate expectations change. For context on where stocks stand heading into the event, see how major U.S. stock indexes fared on Thursday. After Jackson Hole, attention turns to upcoming data that could recalibrate the path again. |
