Futures Pointing To Higher Open Ahead Of Powell Speech

(RTTNews) - The major U.S. index futures are currently pointing to a higher open on Friday, with stocks likely to regain ground after trending lower over the past several sessions.

Traders may look to pick up stocks at somewhat reduced levels following the recent weakness, which has seen the S&P 500 close lower for five straight sessions.

However, early trading is likely to be impacted by reaction to Federal Reserve Chair Jerome Powell's highly-anticipated speech at the Jackson Hole Economic Symposium later this morning.

Powell's remarks could have a significant impact on the outlook for rates ahead of the Fed's next monetary policy meeting in September.

Chris Zaccarelli, Chief Investment Officer for Northlight Asset Management, has predicted Powell will "keep his cards close to his vest" and emphasize that the Fed will need to see upcoming jobs and inflation data before making a determination whether or not to cut interest rates next month.

Ahead of Powell's speech, CME Group's FedWatch Tool is currently indicating a 71.3 percent chance the Fed will lower rates by a quarter point next month, down from 85.4 percent a week ago.

Stocks fluctuated early in the session on Thursday before mostly lower over the course of the trading day. The major averages all moved to the downside on the day, with the S&P 500 closing lower for the fifth consecutive session.

The major averages finished the day off their worst levels but still in negative territory. The S&P 500 slid 25.61 points or 0.4 percent to 6,370.17, the Nasdaq fell 75.55 points or 0.3 percent to 21,100.31 and the Dow declined 152.81 points or 0.3 percent to 44,785.50.

The weakness on Wall Street partly reflected lingering uncertainty about the outlook for interest rates ahead of Powell's speech at the Jackson Hole Economic Symposium on Friday.

In an interview with CNBC, Kansas City Fed President Jeffrey Schmid expressed doubt about lowering interest rates in September, saying the central bank needs to "have very definitive data to be moving that policy rate."

"In September, we'll get around tables and we'll collaborate and we'll figure it out, but yeah, I think there's a lot to be said between now and September," he added.

A notable decrease by shares of Walmart (WMT) also generated some negative sentiment, with the retail giant tumbling by 4.5 percent after reporting weaker than expected second quarter earnings.

On the U.S. economic front, the Labor Department released a report showing first-time claims for U.S. unemployment benefits rose by much more than expected in the week ended August 16th.

The report said initial jobless claims climbed to 235,000, an increase of 11,000 from the previous week's unrevised level of 224,000. Economists had expected jobless claims to inch up to 225,000. Retail stocks saw significant weakness amid the steep drop by Walmart, dragging the Dow Jones U.S. Retail Index down by 1.2 percent.

Notable weakness was also visible among airline stocks, as reflected by the 1.0 percent loss posted by the NYSE Arca Airline Index.

On the other hand, gold stocks turned in a strong performance despite a decrease by the price of the precious metal, driving the NYSE Arca Gold Bugs Index up by 2.0 percent to its highest closing level in over twelve years.

Oil service stocks also saw considerable strength amid a sharp increase by the price of crude oil, with the Philadelphia Oil Service Index climbing by 1.6 percent.

Commodity, Currency Markets

Crude oil futures are inching up $0.07 to $63.59 a barrel after advancing $0.81 to $63.52 a barrel on Thursday. Meanwhile, after slipping $6.90 to $3,381.60 an ounce in the previous session, gold futures are falling $13.10 to $3,368.50 an ounce.

On the currency front, the U.S. dollar is trading at 148.60 yen versus the 148.37 yen it fetched at the close of New York trading on Thursday. Against the euro, the dollar is valued at $1.1610 compared to yesterday's $1.1606.

Asia

Asian stocks turned in a mixed performance on Friday as some strong U.S. economic data and hawkish comments from several Federal Reserve officials prompted traders to reduce their expectations for imminent interest rate cuts.

Investors await Fed Chair Jerome Powell's upcoming speech at the Jackson Hole symposium later in the day for additional clues on the timing and size of potential interest rate cuts.

Stalled Russia-Ukraine peace talks and Fed independence worries also kept investors on edge.

China's Shanghai Composite Index rallied 1.5 percent to 3,825.76 as a JPMorgan report suggested the rally in onshore Chinese stocks would continue.

Chipmaker SMIC jumped more than 10 percent after Nvidia reportedly instructed component suppliers to stop production related to H20 AI chip.

Hong Kong's Hang Seng Index advanced 0.9 percent to 25,339.14, fueled by a flood of mainland money.

Japanese markets ended on a flat note as hotter-than-expected core inflation data for July raised expectations of a rate hike.

The Nikkei 225 Index finished marginally higher at 42,633.29, while the broader Topix Index settled 0.6 percent higher at 3,100.87, snapping a three-day losing streak.

Among the prominent gainers, SoftBank Group, Lasertec and Tokyo Electric Power all gained around 2 percent.

Seoul stocks ended higher for a second consecutive session, with chip and defense stocks leading the gains. The Kospi jumped 0.9 percent to 3,168.73. SK Hynix surged 2.5 percent to snap a five-day losing streak.

Australian markets declined after notching another record close the previous day. The benchmark S&P/ASX 200 Index dropped 0.6 percent to close at 8,967.40, with consumer staple, health care and real estate stocks leading losses. The broader All Ordinaries Index ended down 0.5 percent at 9,234.30.

Buy-now, pay-later provider Zip Co soared over 20 percent on solid earnings and comments surrounding a planned Nasdaq listing. Fast food chain Guzman Y Gomez slumped 18.2 percent after posting weak Australian sales growth.

Across the Tasman, New Zealand's benchmark S&P/NZX-50 Index slumped 1.2 percent to 13,042.76, snapping a two-day rally.

Casino operator SkyCity Entertainment plunged 29 percent after emerging from a trading halt on capital raise announcement.

The dollar extended gains after reports emerged that the U.S. Justice Department is considering investigating Fed Governor Lisa Cook.

Gold drifted lower, while oil prices rose as hopes for an imminent peace deal between Russia and Ukraine dimmed.

Europe

European stocks are little changed on Friday ahead of Federal Reserve Chair Jerome Powell's highly anticipated Jackson Hole speech..

In economic news, the German economy shrank more than initially estimated in the second quarter, the latest data from Destatis revealed.

Gross domestic product fell 0.3 percent sequentially, reversing a 0.3 percent increase in the first quarter. In the flash estimate, the economy showed a contraction of 0.1 percent.

Elsewhere, confidence among French manufacturers held steady in August, as expected, monthly data from the statistical office INSEE revealed. The manufacturing sentiment index stood at 96.0 in August, the same as in July.

While the German DAX Index is down by 0.1 percent, the French CAC 40 Index and the U.K.'s FTSE 100 Index are both up by 0.1 percent.

French train manufacturer Alstom has moved to the upside on winning a £75 million eight-year maintenance contract with Great Western Railway.

Likewise, construction firm Skanska has also risen after it signed a contract to undertake the main cable dehumidification for the Verrazzano-Narrows Bridge in New York.

Beauty retailer Revolution Beauty has surged after successfully raising £15 million through a placing and subscription of new ordinary shares.

Dulux paints maker AkzoNobel has also jumped after activist investor Cevian Capital took a 3 percent stake in the company, according to a filing by Dutch market regulator AFM.

U.S. Economic News

Federal Reserve Chair Jerome Powell is scheduled deliver remarks on the "Economic Outlook and Framework Review" at the 2025 Jackson Hole Economic Policy Symposium at 10 am ET.