UPDATE: Global stocks are holding steady as traders brace for a pivotal speech from Federal Reserve Chair Jerome Powell at the annual Jackson Hole symposium today. Investors are keenly awaiting insights into the Fed’s future monetary policy, especially amidst mounting criticisms of Powell’s leadership from U.S. President Donald Trump.
The stakes are high as Powell’s remarks could significantly impact market sentiment. Recent data reveals that U.S. producer prices surged in July, prompting traders to adjust their expectations for interest rate cuts. Now, futures markets reflect only a 66% chance of a 25 basis point cut in September, a sharp decline from an 85% chance reported just last week.
Traders are particularly cautious as other Federal Reserve officials have expressed skepticism regarding a September rate cut, despite signs of weakness in the U.S. labor market. Nabil Milali, a portfolio manager at Edmond de Rothschild Asset Management, noted that a cautious tone from Powell today could shift market expectations to a 50-50 split on rate cuts. “We believe the unofficial theme of this meeting would be central banks’ independence,” Milali added.
As the markets digest this critical moment, the MSCI’s broadest index of global stocks remains flat, while European stocks saw a slight uptick this morning. Wall Street futures have increased by 0.1% to 0.2%, indicating a mixed sentiment ahead of Powell’s speech.
In Asia, China’s CSI 300 Index surged 2.1% following the release of an upgrade to DeepSeek’s V3 AI model. However, conflicting reports regarding Nvidia and Foxconn‘s collaboration on the H20 AI chip have created uncertainty, impacting Chinese tech stocks.
The dollar index, which tracks the greenback against six major currencies, edged up 0.1%, while the euro slightly dipped to $1.15985 following a downward revision of Germany’s GDP, which shrank by 0.3% in the second quarter. Meanwhile, in Japan, core consumer prices slowed for the second consecutive month in July but remain above the central bank’s target, maintaining speculation around a potential rate hike.
Despite this, the yen is set for a 1% decline for the week, with additional insights expected from Bank of Japan (BOJ) Governor Kazuo Ueda at Jackson Hole.
Meanwhile, oil prices have taken a hit, with Brent crude trading down 0.2% at $67.5 per barrel. This comes after strong gains on Thursday, amid ongoing tensions as Russia and Ukraine blame each other for stalled peace talks.
Gold has also seen a slight decrease, with spot bullion down 0.2% at $3,330.9 per ounce. As these markets react, the atmosphere is charged with anticipation, making today’s developments critical for investors worldwide.
As the clock ticks down to Powell’s address, market participants are encouraged to stay tuned for updates that could sway financial landscapes globally.
