Stock Futures Rise as Investors Await Powell’s Jackson Hole Speech for Clues on Rate Cuts

U.S. stock index futures ticked up on Friday as investors awaited Federal Reserve Chair Jerome Powell’s speech at the Jackson Hole Economic Symposium for insights on potential interest rate cuts.

The Fed’s July meeting minutes revealed that several policymakers were open to the idea of rate cuts in September. However, Powell’s upcoming address could clarify the timing and extent of any easing measures and the Fed’s response to evolving economic conditions.

Powell will speak at 10 a.m. ET (1400 GMT) at the annual gathering of central bank officials in Jackson Hole, Wyoming. ING strategist Francesco Pesole noted, “The key question is whether Powell will hint at a possible 50 basis point cut, either in September or later this year.”

Market expectations fully incorporate the possibility of the Fed beginning to ease interest rates at its Sept. 17-18 meeting, with a 74% probability of a 25-basis-point cut, according to CME Group’s FedWatch tool.

Major Indexes Recover From Earlier Losses This Month

Recent economic data, including weekly jobless claims and payroll revisions, suggest a gradual slowdown in the U.S. economy, easing concerns about a severe downturn. This has helped Wall Street’s three main indexes recover from a drop earlier this month triggered by a disappointing July employment report, and Yen carry trade. The S&P 500 is now approximately 1.8% below its mid-July record high after a decline of up to 9.7% from that peak.

At 05:07 a.m. ET, Dow E-minis were up 109 points, or 0.27%; S&P 500 E-minis were up 0.4% at 5,616.25, and Nasdaq 100 E-minis were up 126 points, or 0.64%.

Workday shares surged 11% in premarket trading following better-than-expected second-quarter revenue and a $1 billion stock buyback announcement. Ross Stores shares rose 5.7% after the discount retailer updated its fiscal 2024 profit forecast upward.

Later in the day, the U.S. Commerce Department’s Census Bureau is expected to report that new home sales stabilized in July after hitting a seven-month low in June.