U.S. stocks fluctuated on Thursday as investors weighed how much the Federal Reserve might cut interest rates in September on the eve of a key speech by Chairman Jerome Powell.
The S&P 500 (^GSPC) hovered near the flat line, while the tech-heavy Nasdaq Composite (^IXIC) gave up early morning gains and edged lower. The Dow Jones Industrial Average (^DJI) lost 0.2% after the three indexes closed higher on Wednesday.
Stocks took a positive tone after minutes from the Fed’s latest meeting showed that several Fed officials were open to a rate cut in July, suggesting a reversal is likely when monetary policy is decided next month. Growing hopes for lower rates have already helped markets recoup losses from the early August crash.
The Fed’s Jackson Hole symposium begins Thursday, and the market is on high alert for any change in tone from policymakers when Powell speaks at the event on Friday.
Read more: Fed forecasts for 2024: What experts say about the possibility of a rate cut
Initial jobless claims rose to 232,000 last week, in line with expectations, while the previous week’s figure was revised upward to 228,000. The data, released on Thursday morning, took center stage as an official revision of payrolls showed that the labor market – a key indicator for policymakers – may have cooled much sooner than first thought. Signs of stress could influence how much the Fed cuts interest rates, with hopes of a 0.5% cut in play.
At the corporate level, shares of Paramount (PARA) rose after media executive Edgar Bronfman Jr. raised his takeover offer to $6 billion. Meanwhile, shares of Snowflake (SNOW) fell as revenue prospects dashed investors’ hopes for an AI boom.
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