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Market Snapshot: U.S. stock market rises Friday morning, ahead of Powell’s speech at Jackson Hole

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U.S. stocks rose modestly Friday morning, ahead of Federal Reserve Chair Jerome Powell’s speech at the Jackson Hole central bankers symposium.

How are stock benchmarks trading?
  • The Dow Jones Industrial Average
    DJIA,
    +0.69%

    was trading about 85 points, or 0.3%, higher at about 35,304.
  • The S&P 500
    SPX,
    +0.76%

    advanced 0.3%, or 13 points, to reach around 4,483.
  • The Nasdaq Composite Index
    COMP,
    +0.90%

    rose 41 points, or 0.3%, at 14,989.

Equity benchmarks slipped on Thursday after three Fed officials—Robert Kaplan, James Bullard, and Esther George—advocated for tapering of the central bank’s accommodative stance sometime this year. The Dow
DJIA,
+0.69%

fell 192 points on Thursday to close at 35,213, while the S&P 500
SPX,
+0.76%

declined 0.58% and the Nasdaq Composite
COMP,
+0.90%

moved 0.64% lower.

What’s driving market?

Powell’s speech at the annual Jackson Hole symposium at 10 a.m. Eastern Time is the day’s headliner.

His speech is important because the Fed chair could provide clues as to when the central bank will begin slowing—or tapering—its pandemic-era program of monthly asset purchases, which has added critical liquidity to markets since last year.

See: Here’s what the Fed will do—if it follows what Powell said at last year’s Jackson Hole address

But analysts increasingly expect Powell’s speech to lack fireworks. 

“Deutsche Bank’s U.S. economists think that the speech will largely mirror his remarks at the July Federal Open Market Committee press conference, and so aren’t expecting a strong signal on the Fed’s September meeting. Instead they think that a tapering announcement will come at the following meeting in early November,” said Henry Allen, an analyst at Deutsche Bank.

Michael Hewson, an analyst at broker CMC Markets, noted that “Powell’s speech may well lay the groundwork for some sort of road map to be laid out at the September meeting, with the timing of any decision likely to be dependent on how good next week’s August payrolls report is likely to be.”

Though all eyes will be on Jackson Hole, investors were also analyzing U.S. economic data Friday morning.

The U.S. rate of inflation, based on the personal consumption deflator, rose again in July and drove the increase over the past year to a 30-year high, pointing to fresh strains on businesses and consumers as the economy recovers from the pandemic, which may set the tone for Powell’s speech.

The so-called PCE price index, or personal-consumption expenditures, the Fed’s preferred measure of inflation, climbed 0.4% in July, government figures show. It was the fifth big increase in a row and the 12-month increase in PCE to 4.2% from 4%, was the highest since 1991. However, the core rate, excluding food and energy prices, over the past 12 months was unchanged at 3.6%, keeping it at a 30-year high.

In other data, personal incomes climbed 1.1% in July, while spending increased 0.3% in July; and the U.S. international trade deficit in goods dropped 6.2% in July to $86.4 billion.

Looking ahead, investors are awaiting a report on consumer sentiment from the University of Michigan due at 10 a.m.

Which companies are in focus?
  • Peloton Interactive Inc. PTON shares were tumbling 7.5% on Friday after the exercise-equipment company said it has been subpoenaed by the Justice Department and U.S. Department of Homeland Security for documents relating to its reporting of injuries caused by its products.
  • Support.com’s shares
    SPRT,
    +62.28%

    were surging over 70%, extending its gains after soaring on Thursday. Support.com provides customer and technical support. 
  • Quanterix Corp. QTRX said that while it was previously engaged by Cassava Sciences Inc. SAVA to perform sample testing, the digitized biomarker analysis company said it, or its employees, “did not interpret the test results or prepare the data charts” presented by Cassava to the Alzheimer’s Association International Conference (AAIC) in July, or otherwise. Quanterix’s stock was up nearly 8% and those for Cassava were down 22%.
  • EngageSmart Inc. on Friday filed its initial public offering documents for the Braintree, Mass.-based payment software company to trade on the New York Stock Exchange under the symbol “ESMT.”
How are other assets trading?
  • The 10-year Treasury note yield
    TMUBMUSD10Y,
    1.329%

    was holding steady at around 1.342%.
  • The dollar was edging higher, as gauged by the ICE U.S. Dollar Index
    DXY,
    -0.38%
    ,
    a measure of the buck against a half-dozen rivals.
  • In Asia, Tokyo’s Nikkei 225
    NIK,
    -0.36%

    declined 0.36% while the Hong Kong Hang Seng Index
    HSI,
    -0.03%

    closed 0.03% lower and the Shanghai Composite
    SHCOMP,
    +0.59%

    rose 0.59%
  • In Europe stocks hovered higher, with London’s FTSE 100
    UKX,
    +0.16%

    up less than 0.1%, and the pan-European Stoxx 600
    SXXP,
    +0.23%

    also rising by about 0.1%. France’s CAC 40
    PX1,
    +0.05%

    slipped less than 0.1% while Frankfurt’s DAX
    DAX,
    +0.21%

    traded less than 0.1% higher.

The Fed: Fed chair Powell says he supports starting to taper bond purchases this year

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