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Fed chair’s dovish tone at Jackson Hole also remains in focus.
by Andre Janse van Vuuren
Stocks retreated as traders cut risk ahead of Friday’s US inflation data that may test expectations on how quickly the Federal Reserve can reduce interest rates.
Futures for the S&P 500 fell 0.3% after the benchmark reached a fresh record-high. Dell Technologies Inc. slumped more than 5% in premarket trading, after reporting a slowdown in artificial intelligence server sales. Nasdaq 100 contracts dropped 0.4%. European stocks retreated 0.5%, with French equities back under pressure amid ongoing political turmoil.
Longer-dated US Treasuries fell, with the yield on 30-year notes rising three basis points to 4.90%. The pullback in European bonds was less pronounced after weaker-than-expected consumer price readings from France and Spain. The dollar was little changed, putting it on track to snap a run of three weekly losses.
Fed Chair Jerome Powell’s dovish tilt at Jackson Hole shored up bets on the first rate cut of the year next month but doubts still linger over what comes after that move, with inflation stuck above target.
Friday’s report is expected to show core personal consumption expenditures rising 2.9% in July, the fastest pace in five months. Policymakers will have to balance higher price pressures with data next week that’s expected to show a rise in unemployment.
“With attention shifting toward softening labor data, anything short of a major upside surprise is unlikely to derail expectations for a September cut, followed by another by year-end,” wrote Ipek Ozkardeskaya, an analyst at Swissquote Bank. “However, there is no guarantee that inflation will remain contained.”
In commodities, oil gave up some of its gains in the prior session amid waning hopes for an end to the war in Ukraine, which reduced the likelihood of more of Moscow’s supplies reaching broader markets in the near term.
Brent crude is headed for a monthly loss, as investors weighed concerns about a looming glut along with geopolitical tensions.
- Dell Technologies Inc. shares declined in premarket trading after the company booked fewer sales of artificial intelligence servers and reported profit margins on the powerful machines that fell short of analysts’ estimates.
- Marvell Technology Inc.shares are down 12% in premarket trading as the chipmaker reported second-quarter results that featured a disappointing read on its data center business.
- Shares of UK lenders slumped after Chancellor of the Exchequer Rachel Reeves faced renewed calls to raise billions of pounds of much-needed revenue by imposing a windfall tax on banks.
- ANZ Group Holdings Ltd. Chief Executive Officer Nuno Matos apologized to his staff after the bank earlier this week botched the communication of a job cuts plan.
Some of the main moves in markets:
- The Stoxx Europe 600 fell 0.5% as of 9:33 a.m. London time
- S&P 500 futures fell 0.3%
- Nasdaq 100 futures fell 0.4%
- Futures on the Dow Jones Industrial Average fell 0.3%
- The MSCI Asia Pacific Index fell 0.2%
- The MSCI Emerging Markets Index fell 0.1%
Currencies
- The Bloomberg Dollar Spot Index was little changed
- The euro was little changed at $1.1684
- The Japanese yen was little changed at 146.92 per dollar
- The offshore yuan fell 0.1% to 7.1277 per dollar
- The British pound fell 0.2% to $1.3483
Cryptocurrencies
- Bitcoin fell 1.7% to $110,043.14
- Ether fell 2% to $4,369.17
Bonds
- The yield on 10-year Treasuries advanced two basis points to 4.23%
- Germany’s 10-year yield advanced one basis point to 2.71%
- Britain’s 10-year yield advanced two basis points to 4.72%
Commodities
- Brent crude fell 0.6% to $68.23 a barrel
- Spot gold fell 0.1% to $3,412.77 an ounce
This story was produced with the assistance of Bloomberg Automation.
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