Futures tied to the S&P 500 and Nasdaq moved modestly lower on Friday as investors digested a large tech-led advance from the prior session and awaited Federal Reserve Chair Kevin Warsh’s long-anticipated address at the Fed’s annual meeting in Jackson Hole, Wyoming.
Warsh’s maiden speech to the gathering is the focal point for market participants, who are looking for any clue about the Fed’s prospective approach to monetary policy amid a recent spike in bond yields and mixed inflation data. Analysts at StoneX argued that Warsh does not need to pre-commit to a September rate increase at Jackson Hole, but that he should make clear that a failure of inflation to ease in the weeks or months ahead would be grounds for tightening. The analysts added that doing so would align him more closely with his committee while preserving the option to hold in September - though they expressed skepticism he would provide that clarity.
On Thursday three Fed officials issued warnings about inflation, and at least two of them restated their readiness to raise interest rates. Money market pricing reflected this uncertainty, with the CME FedWatch tool showing a 33% probability of a rate hike in September.
Markets also saw a pullback in several chip stocks after a strong rally on Thursday that had been catalyzed by Nvidia’s blockbuster forecast. That guidance reignited hopes that the AI-driven upswing in semiconductors had further room to run, but profit-taking followed in premarket trading.
Market snapshots included the following index and stock moves: NDX +1.43%, US500 +0.72%, DJI +0.2%, INTC +4.36%, NVDA +8.74%, MRVL -1.49%, GAP -1.7%, MU -0.32%, PYPL -0.55%.
In premarket action on Friday, Nvidia slipped about 1%, while Micron Technology and Intel each fell roughly 2.2%. Marvell Technology dropped 8.6% on investor questions about the timing of revenue tied to its AI chip deal with Alphabet’s Google, even after Marvell raised its 2027 revenue forecast. PayPal tumbled 13.3% following a report that a consortium including buyout firm Advent and payment processor Stripe had decided to end their pursuit of the company. By contrast, Gap surged 13.5% after appointing industry veteran Michael Francis as Old Navy’s new CEO and lifting its annual profit outlook.
At 5:46 a.m. ET, Dow E-minis were higher by 59 points, or 0.11%, while S&P 500 E-minis were down 4.75 points, or 0.06%. Nasdaq 100 E-minis traded lower by 92.25 points, or 0.32%.
Beyond Warsh’s remarks, traders will parse Friday’s final University of Michigan consumer sentiment reading for August and listen to a speech from Chicago Fed President Austan Goolsbee for further signals on the outlook for consumption and policy.
The combination of mixed economic data, a volatile bond market and divergent signals from Fed officials has left investors closely attuned to any new language from policy-makers that might influence the trajectory of interest rates and equity valuations.