A trader works as a screen broadcasts a news conference by U.S. Federal Reserve Chair Jerome Powell following the Fed rate announcement, on the floor of the New York Stock Exchange in New York City on June 12, 2024.
Brendan Mcdermid | Reuters
Stocks were little changed Wednesday as traders looked ahead to minutes from the Federal Reserve’s latest policy meeting — seeking further insight into the prospect of an interest rate cut.
Target jumped more than 15% after reporting earnings for the fiscal second quarter that exceeded Wall Street’s expectations. But fellow retailer Macy’s dropped more than 9% on a lowered full-year sales forecast.
Stocks are coming off a losing session, with both the S&P 500 and Nasdaq Composite snapping their longest winning streaks since late 2023.
Tuesday’s moves follow a rocky period for stocks after a weak U.S. jobs report and an interest rate hike from the Bank of Japan sparked a global sell-off on Aug. 5. That day, the Cboe Volatility Index (VIX) spiked to its highest level since the pandemic-era market plunge in 2020. Equities have bounced back since the market turmoil, with strong retail sales and a weaker-than-expected inflation report helping alleviate recession fears last week.
Along with minutes from the Fed’s July meeting, Wall Street anxiously awaits commentary from central bank leader Jerome Powell. The Fed chair is expected to deliver remarks Friday at the Jackson Hole Economic Symposium, where he could provide further clues into the Fed’s next rate decision at its September gathering.
“To us, the key will be Chair Powell’s tone, which we expect to lean dovish,” said Jack Janasiewicz, lead portfolio strategist at Natixis Investment Managers Solutions. “Simply put, inflation continues to trend towards the 2% target seemingly at a rate exceeding consensus. Combine this with signs that the labor market is softening and one gets the sense that there is little need to retain a hawkish stance.”
