Stock futures were little changed prior to Powell’s Jackson Hole speech

Traders on the NYSE floor, August 24, 2022.

Source: New York SE

Stock futures fell slightly Thursday night as investors awaited Federal Reserve Chair Jerome Powell’s speech on Friday morning in Jackson Hole, Wyoming.

Futures linked to the Dow Jones Industrial Average fell 63 points. S&P 500 futures are down 0.2% and Nasdaq 100 futures are down 0.1%.

The moves followed an up day for the major averages, which saw the Dow jump about 300 points and the S&P 500 gain 1.4%. The Nasdaq Composite was the outperformer, up 1.7% as a decline in yields benefited technology stocks.

“The 10-year Treasury yield, which surged over 3% this week, brought volatility back to stocks, bringing with it daily speculation that the Fed isn’t doing enough to fight inflation,” said Robert Cantwell, portfolio manager at Upholdings , to CNBC. “Overall, it remains a really attractive time to invest in equities. Underlying company performance is strong for the highest quality companies and multiples are down on macro fears. This is the setup every long-term investor is looking for.”

Nonetheless, all major averages are on track for their second straight week. The Dow is on track for a 1.2% decline. The S&P 500 and Nasdaq Composite are heading for slightly smaller declines of 0.7% and 0.5%, respectively.

All eyes are on Powell’s much-anticipated speech at 10 a.m. ET at the Wyoming Federal Reserve’s annual symposium.

Investors are hoping for fresh guidance on the Fed’s behavior this fall, but expectations are lower as many expect Powell to reiterate the Fed’s promise to curb inflation by raising rates. Opinion is divided on whether the Fed will hike rates by half a percentage point or three-quarters of a point at its next monetary policy meeting in September.

“We’re probably going to see some relief tomorrow unless we get a big shock from what Powell says,” Gabriela Santos, global markets strategist at JP Morgan Asset Management, told CNBC’s “Closing Bell: Overtime.” “One thing I would keep in mind as we look into next week and into the fall… the bond implied volatility is still very, very high where it is typically at the end of August, suggesting we are likely to continue to see one there will be a lot of movement in the yield curve, which could impact equity markets in the fall.”