Investing.com — Wall Street Trading Preview

Wall Street is trading in tight ranges Thursday before labor macro data, a speech by Vice President Kamala Harris, and the Jackson Hole symposium starting Friday.

1. Jackson Hole in Focus

Central bankers are gathering in Jackson Hole, Wyoming, ahead of the annual symposium. Fed Chair Jerome Powell’s speech on Friday will be the highlight as investors seek clues about monetary policy changes next month.

Fresh signs of weakness in the U.S. job market support interest rate cuts, especially after some Fed officials appeared open to reducing borrowing costs in July. Minneapolis Fed President Neel Kashkari noted that the debate about cutting rates in September is appropriate given the shifted balance of risks.

Traders now see a 38% chance of a 50 basis point cut at the Fed’s September 17-18 meeting, up from 33% a day earlier, with a 62% chance for a 25 bp reduction, per CME Group’s FedWatch Tool.

Analysts at Deutsche Bank suggest Powell’s comments may emphasize the strong case for a September cut, noting potential faster pace of rate cuts amid labor market risks and uncertain policy after elections.

2. Futures Calm Ahead of Labor Data and Jackson Hole

U.S. stock futures were mostly unchanged Thursday as investors await labor market data and Powell’s key speech. As of 04:47 ET, Dow futures were up 46 points, or 0.11%, while S&P 500 and Nasdaq 100 futures were flat.

The S&P 500 rose 0.4%, the Nasdaq Composite gained 0.6%, and the Dow added 55 points, or 0.1%, on Wednesday, aided by positive sentiment from the Fed’s July meeting minutes suggesting a likely mid-September rate cut.

On the corporate front, companies like Intuit, Ross Stores will report earnings, with Snowflake’s stock under scrutiny after a drop following disappointing results.

3. Payrolls Data the Next Port of Call

Investors anticipate more economic data Thursday, growing confident in a potential Fed interest rate cut next month. Weekly jobless claims are expected to have increased marginally to 232,000.

The Labor Department’s revisions indicate the U.S. economy created 818,000 fewer jobs than previously reported over the last 12 months, sparking concerns about a labor market downturn due to high interest rates. August’s S&P Global PMIs suggest continued contraction in manufacturing despite strength in services.

While a 25 basis point cut next month is widely expected, concerns over a sharp economic slowdown keep the possibility of a larger cut in mind, with analysts at Citi indicating a 50 basis point cut remains a base case scenario.

4. Harris to Look More Favorably on Crypto?

Kamala Harris is set to deliver a speech accepting the Democratic nomination later Thursday, requiring her to quickly formulate a campaign following President Biden’s exit.

Harris will likely address the cryptocurrency sector, aiming to win over crypto investors after former President Trump’s regulatory promises. Her campaign emphasizes supportive measures for digital assets while seeking regulatory safeguards following industry collapses.

5. Demand Worries Continue to Weigh on Crude

Crude prices fell Thursday amid global demand worries. As of 04:47 ET, U.S. crude futures dipped 0.3% to $71.69 a barrel, with Brent down 0.1% at $75.94 per barrel.

Both contracts have slipped over 6% in the past week due to weak economic data from China and revised U.S. employment figures. Concerns about crude have overshadowed potential supply disruption risks due to ongoing conflicts.

The Energy Information Administration has reported a decline in U.S. fuel inventories, but this has not significantly eased the overall nervousness in the crude market.