The Dow opened sharply lower on Thursday, sliding more than 200 points, as Wall Street nervously counted down to Federal Reserve Chair Jerome Powell’s big speech at Jackson Hole. The S&P 500 (SPY) and Nasdaq also dropped in early trading, adding to a losing streak that’s starting to gnaw at investor confidence. Tech stocks, the darlings of this year, continued to fade, while dividend names and “safe” picks aren’t doing enough to balance the scales.
Elevate Your Investing Strategy:
- Take advantage of TipRanks Premium at 50% off! Unlock powerful investing tools, advanced data, and expert analyst insights to help you invest with confidence.
Jobless Claims Raise New Concerns
Adding fuel to the selloff, new jobless claims came in higher than expected. Filings rose to 235,000 last week, compared with 224,000 the week before and above forecasts of 225,000. Continuing claims also ticked up to nearly 2 million, the highest level since late 2021. This suggests that the labor market is losing some of its shine. On top of that, this comes on the heels of a jobs report earlier this month that was already revised downward. So, although the labor picture isn’t collapsing per se, it’s still clearly softening.
Treasury Yields Wobble as Fed Debate Spices Up
Bond markets reacted (as expected) immediately. The 10-year Treasury yield slipped to 4.29%, while the 2-year hovered near 3.75%. The mixed signals are everywhere, with inflation still above the Fed’s comfort zone but jobless data flashing yellow lights on growth. Traders who once felt sure about a September rate cut are now second-guessing themselves. A month ago, odds of a cut were over 90%; now they’re closer to the high 70s. The market hates uncertainty, and right now the Fed is serving it up in spades.
Fear Gauge Creeps Higher as Politics Swirl
Meanwhile, the Cboe Volatility Index, Wall Street’s so-called fear gauge, edged up to about 16. It’s not panic territory, but it’s enough to show nerves are fraying. Political noise isn’t helping. President Trump has kept up his campaign of attacks on the Fed, even calling on a sitting governor to resign, while simultaneously demanding faster rate cuts. Now, add tariffs into the mix, and it’s no wonder investors are pretty edgy.
Powell’s Words Will Set the Tone
Now everyone is just waiting until Friday morning, when Powell takes the stage at Jackson Hole. Markets are desperate for clarity, with people asking whether the Fed will focus on inflation and keep rates steady or lean into softening jobs data and deliver the cut traders crave. For now, stocks are pretty much stuck in limbo. The Dow down, the S&P (SPY) and Nasdaq sagging, yields sliding, it’s a cocktail of worries.
The real test comes tomorrow. Powell’s speech is the main event that could tip markets one way or the other.
Stay ahead of macro events with our up-to-the-minute Economic Calendar — filter by impact, country, and more.