US Stocks Eye Strong Start As Traders Discount Dovish Comments From Jerome Powell At Jackson Hole: Nvidia's Earnings Will Reinforce That Tech Stocks Are In Good Place, Says Strategist

Traders apparently are baking in expectations that Federal Reserve Chairman Jerome Powell will confirm at Jackson Hole that a rate cut is forthcoming. After Thursday’s hiccup, stocks appear on track to open higher, with the index futures modestly higher early Friday. While delving into Powell’s speech, fund manager Louis Navellier said, “I suspect he’s going to say that the inflation has been in the Fed’s target range in the last three months, and he has to address the labor market as well.”

Analysts at Macquarie expect Powell to go with a neutral tone. “We wouldn’t be surprised by a moderate tone from Powell, which could have implications for currency markets and investor sentiment,” the analysts at the firm said, Investing.com reported. “Yet, we doubt that Powell will be so bold as to sound so ‘dovish,” they reportedly said.

Futures	Performance (+/-)
Nasdaq 100	+0.71%
S&P 500	+0.45%
Dow	+0.30%
R2K	+0.50%

In premarket trading on Friday, the SPDR S&P 500 ETF Trust SPY climbed 0.50% to $559.01, and the Invesco QQQ ETF QQQ gained 0.78% to $478.55, according to Benzinga Pro data.

Cues From Last Session:

Selling resumed on Thursday as a modest increase in jobless claims and a faster-than-expected expansion seen in the service sector sapped the risk appetite of traders. The major averages opened slightly higher and saw some volatility in early trading. They began to move steadily lower thereafter before ending notably lower for the session amid caution ahead of Powell’s speech on Friday.

IT stocks fell by the most, and consumer discretionary and communications services stocks also fell sharply, while energy, financial and real-estate stocks bucked the downtrend.

Index	Performance (+/)	Value
Nasdaq Composite	-1.67%	17,619.35
S&P 500 Index	-0.89%	5,570.64
Dow Industrials	-0.43%	40,712.78
Russell 2000	-0.95%	2,150.03

Insights From Analysts:

The market has shown a lot of resilience as they fought back after the Aug. 5 sell-off, said Fund Strat’s Tom Lee in a CNBC interview on Thursday. “The fact we snapped back so sharply is showing you how strong the market is,” he said. The July jobs data and the sharp downward adjustment made to non-farm payrolls during the annual revision gives more ammunition for the Fed to start a cutting cycle, he added.

This, the strategist, said will give more life to the economy and the markets, especially to cyclical and small-cap stocks. The techs are still in a good place due to the artificial intelligence technology, he said, adding that Nvidia Corp. NVDA will reinforce that. The multiple at which tech stocks are trading is not a demanding multiple, he said.

“If tech is in a good place and then we get Fed cuts, I think it allows the overall market to expand.”

Lee suggested the Fed should get off its data-dependence stance, as it is the reason why the central bank missed the inflation turn and is now missing the soft-landing.

Upcoming Economic Data

• Powell is scheduled to speak at the Jackson Hole symposium at 10 a.m. EDT.
• The Commerce Department will release its new home sales report for July at 10 a.m. EDT, with economists, on average, expect the number to come in at a seasonally adjusted annual rate of 620,000 units, slightly up from the 617,000-unit rate in June.

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Stocks In Focus:

• BILL Holdings, Inc. BILL rose over 4% in premarket trading following the company’s quarterly results announcement.
• The other stocks moving on earnings are CAVA Group, Inc. CAVA (up over 9.5%), Ross Stores, Inc. ROST (nearly 5.5%) and Workday, Inc. WDAY (up over 12.5%).
• Buckle, Inc. BKE is due to release its quarterly results before the market opens.
• Crypto-linked stocks firmed up amid the strength among cryptocurrencies. MicroStrategy Incorporated MSTR climbed nearly 3% and Coinbase Global, Inc. COIN gained over 1.75%.

Commodities, Bonds And Global Equity Markets:

Crude oil futures are higher following back-to-back gains in the past two sessions and gold futures also advanced, with the yellow metal trading past the $2,530-an-ounce level. Bitcoin BTC/USD gained modest ground and traded above the $61K level. The yield on the 10-year Treasury note edged down slightly to 3.852%.

The Asian markets had a lackluster outing, as traders reacted to the pullback by Wall Street stocks overnight and chose to remain on the sidelines ahead of Powell’s speech. European stocks were higher in early trading.

Read Next:

• Not Nvidia, Portfolio Manager Says He’d Pick This ‘Magnificent 7’ Stock In The Near Term, But Expects Jensen Huang-Led Company To Surprise On The Upside Next Week

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