Wall St dips in lead up to Jackson Hole event; more Fed cues in focus

NEW YORK: Wall Street’s main indexes slipped in volatile trading on Tuesday, ahead of a symposium at Jackson Hole later this week and minutes from the Federal Reserve’s meeting last month which could offer clues on a September interest rate cut.

Seven of the 11 major S&P sectors were trading lower, with energy taking the worst hit, down 2.4%. Chip stocks too came under pressure with the Philadelphia Semiconductor index down 1.1%.

Traders are looking forward to any hints from Powell of a rate cut at the upcoming Fed meeting in September when he delivers his speech at the annual economic symposium in Jackson Hole on Friday.

“We expect Powell to set the table for a cut next month whilst stressing the data-dependent nature of the Fed’s monetary policy decisions and pushing back against any sort of pre-commitment to an aggressive easing path,” Win Thin, managing director, global head of markets strategy at Brown Brothers Harriman wrote in a note.

Atlanta Fed chief Raphael Bostic and Fed Vice Chair for Supervision Michael Barr will speak later on Tuesday, while minutes from the Fed’s last policy meeting are due on Wednesday.

Odds for the Fed cutting interest rates by 25 basis points (bps) in September stand at 73.5%, compared with a near-even split between a 50 and 25 bps cut seen a week ago, according to the CME FedWatch Tool.

On Monday, the S&P 500 and the Nasdaq extended gains to an eighth straight session, their longest winning streak so far this year, after a recent set of data raised optimism about the economic health and boosted expectations of a rate cut when the Fed meets in September. The S&P 500 is expected to trade near current record levels at year-end, according to a Reuters poll of market strategists that suggests the AI rally is losing steam as investors wait for a widely-expected US central bank interest rate cut next month.

At 11:34 a.m. ET, the Dow Jones Industrial Average fell 127.71 points, or 0.31%, to 40,768.82, the S&P 500 lost 14.46 points, or 0.25%, to 5,594.04 and the Nasdaq Composite lost 69.11 points, or 0.39%, to 17,807.67.

Eli Lilly added 2.8% after its weight-loss drug cut the risk of developing type 2 diabetes by 94% in pre-diabetic adults who were overweight or obese after three years of weekly injections. Palo Alto Networks gained 8.5% after the company forecast fiscal 2025 revenue and profit above estimates.

Boeing slipped 5% after the airline maker stopped test flights of its 777-9 models as it awaits certification after a component between engine and airplane structure failed to perform during a maintenance check. Lowe’s fell close to 1% after the company cut its annual profit and sales forecasts, echoing bigger rival Home Depot’s concerns of a slim chance of a recovery in home improvement demand this year.

Declining issues outnumbered advancers by a 1.96-to-1 ratio on the NYSE, and by a 2.2-to-1 ratio on the Nasdaq. The S&P 500 posted 36 new 52-week highs and no new lows, while the Nasdaq Composite recorded 59 new highs and 48 new lows.