U.S. stocks opened little changed on Aug. 18, digesting last week’s gains on increased expectations for a Federal Reserve rate cut in September.
Lower interest rates drop borrowing costs, which should boost the economy.
With that in mind, investors will be focused on remarks from Fed Chair Jerome Powell at the end of the week at the annual Jackson Hole Economic Symposium of global central bankers and finance chiefs. They’ll be looking for hints Powell may be done waiting to see tariff effects before cutting rates again.
“To the extent Powell does talk about the policy outlook next week, we see him noting the softer July jobs report as tilting some of the employment-inflation risk balance,” wrote Michael Feroli, chief U.S. economist at J.P. Morgan. “However, with several Fed speakers recently stating that the case for a cut has not been made, and with more employment data to come, we don’t think Powell can firmly guide toward easing at the next meeting.”
The CME FedWatch tool that tracks the odds markets give for a rate move at each Fed policy meeting showed expectations for a Fed easing at the next policy meeting jumped to more than 90%. Since then, chances have dropped back to about an 83% chance.
Before Powell’s speech, investors will get a glimpse midweek of the dissents at the last Fed meeting. Fed governors Christopher Waller and Michelle Bowman voted against the central bank’s decision to keep rates unchanged between 4.25%-4.50% last month. It was the first time since 1993 that two governors dissented.
At 9:34 a.m. ET, the blue-chip Dow was flat, or up 0.8 point, to 44,946.92; the broad S&P 500 inched up 0.01% or 0.84 point, to 6,450.64; and the tech-heavy Nasdaq edged higher 0.07%, or 14.778 points, to 21,637.755. The benchmark 10-year Treasury yield slipped to 4.316%.
Giant retail earnings due
Discount giants Walmart and Target, and home improvement chains Home Depot and Lowe’s are among the key retailers slated to report earnings this week. How the retail chains are faring can provide a window into tariffs effects and the health of consumers.
Of the more than 92% of S&P 500 companies that have already reported this quarter, almost 82% have surpassed Wall Street’s expectations, according to FactSet.
Corporate news
Dayforce reportedly is in talks to be bought by private equity firm Thoma Bravo. The HR management platform’s shares surged 23.96%.
Soho House agreed to be taken private by a group of investors led by New York-based MCR Hotels in a $2.7 billion deal. Shares of the private club soared 16.1%.
Tesla is offering discounts of up to 40% on leased vehicles in the UK as sales slump, said The Times, a London-based newspaper. The electric vehicle maker’s stock rose fractionally.
Novo Nordisk’s Wegovy obesity drug received accelerated approval from the Food and Drug Administration to treat serious liver disease. Shares of the drugmaker added 5.06%.
Artificial intelligence computing company and bitcoin miner TeraWulf will get an additional $1.4 billion backstop investment from Alphabet’s Google to lift its stake in the company to around $3.2 billion. TeraWulf stock rallied 14.83%.
Cryptocurrency
Michael Saylor, executive chairman of Microstrategy, said in a social media post the company added to its Bitcoin holdings. The company bought 430 Bitcoin for $51.4 million and now holds a total of 629,376 Bitcoin.
Bitcoin was last down 1.48% at $115,759.70.
This story was updated with new information.
Medora Lee is a money, markets and personal finance reporter at USA TODAY. You can reach her at mjlee@usatoday.com and subscribe to our free Daily Money newsletter for personal finance tips and business news every Monday through Friday morning.
This article originally appeared on USA TODAY: US stocks open little changed, awaiting interest rate clues, earnings
