Stock Market Today: Dow Drifts Lower, U.S. Open to Taking Stakes in More Companies
Stocks mostly ticked lower Monday, taking away a bit of the afterglow of Friday’s Jackson Hole market rally.
Federal Reserve Chair Jerome Powell’s speech in the Wyoming town raised hopes for interest rate cuts and drove stocks higher on Friday. Powell said “the balance of risks appears to be shifting” as a way to suggest that a weaker job market could rein in inflation.
The probability that the Fed will cut rates next month, as implied by futures markets, stands at 86% Monday, up from 73% before Powell’s speech, according to the CME FedWatch tool.
Still, rate-cut hopes could be thwarted if economic data doesn’t play along. Friday will bring a report on personal-consumption expenditures for July, the Fed’s preferred inflation metric.
In other economic news, Kevin Hassett, President Trump’s National Economic Council director, said Monday the U.S. could take more stakes in companies similar to the equity investment in Intel. Trump expanded on those comments later Monday.
This week’s big event is Nvidia’s earnings, expected Wednesday. The $4 trillion chip maker is the the market’s premier artificial-intelligence bellwether and investors have begun to worry that the AI spending boom could slow. The tech-heavy Nasdaq composite index declined 0.6% last week, even as Friday’s Fed-led market rebound propelled the S&P 500 higher for the week.
The market Monday:
The S&P 500 and Dow industrials edged lower. The Nasdaq extended its gains after Friday’s rally.
A WSJ coffee scoop: Keurig Dr Pepper struck a deal to buy Peet’s Coffee owner JDE Peet’s for $18 billion, a prelude to spinning off its coffee brands into a separate public company.
European stocks ticked down. Germany’s DAX fell as bond yields in the region rose. U.K. markets were closed for a holiday.
Chinese stocks kept climbing. The benchmark CSI 300 rose again Monday.
The dollar strengthened. The greenback regained modest ground against major currencies after a slide in response to Powell’s Jackson Hole speech.