US Stock Market: Only Dow Rises as It Awaits Jackson Hole Meeting

NASDAQ Falls, Treasury Yields Down Slightly

On the 19th (local time), ahead of speeches by two dovish Federal Reserve Board members at the Jackson Hole Meeting, the US stock market started mixed.

At 10:10 am EST, the Dow Jones Industrial Average was up by 0.5%, while the S&P 500 was fluctuating slightly around 6,449 points, similar to the previous day. The NASDAQ declined by 0.4%.

The 10-year Treasury yield fell sharply by 2 basis points (1bp=0.01%) to 4.314%. The 2-year Treasury yield, which is sensitive to policy, also dropped by 2bp to 3.746%.

The Bloomberg Dollar Spot Index saw little change; however, the Euro rose by 0.1% to $1.1674 per dollar as European stock markets rallied across the board.

After the US announced a security package for Ukraine late the previous day, the broad European STOXX 600 Index climbed 0.6% and other European stock markets likewise moved higher.

Before the market opened, The Home Depot, a home improvement retailer, maintained its annual sales and earnings outlook, causing its stock to rise by 2% and leading the Dow upward. Other retailers such as Lowe's, Walmart, and Target are set to announce their earnings later in the week.

Intel jumped nearly 5% on news of a 10% equity investment by the US government and an additional $2 billion investment from Japan's SoftBank.

Palo Alto Networks gained over 6% after reporting quarterly results beating expectations and raising its annual outlook.

Tesla rose another 1.3% following news that it priced its new Model YL 6-seater SUV in China to match the price of local competitor Li Auto's model.

Michelle Bowman, Vice Chair of the Federal Reserve and one of two Board members advocating a rate cut since July, is scheduled to give a speech on this day. Christopher Waller, another dovish member, will speak on Wednesday.

Both are among the 11 candidates for the next Fed Chair following Jerome Powell, and as both were appointed during Trump's first term and are aiming for the position, their remarks are expected to be dovish.

Some analysts expect Jerome Powell to signal a 25bp rate cut for September at what may be his last Jackson Hole Meeting as Fed Chair.

Richard Saperstein, CIO at Treasury Partners, said, "The Fed is expected to signal a 25bp rate cut for September and a continued accommodative stance through year-end at the Jackson Hole Meeting." However, since this will likely be Powell's last Jackson Hole Meeting as Fed Chair, he pointed out, "There is a greater possibility that he will emphasize the need for the Fed's independence."

According to the CME FedWatch Tool, the interest rate futures market sees an 83% chance of a 0.25% rate cut at the Fed's September meeting.

Junga Kim, Contributing Reporter kja@hankyung.com