Federal Reserve Speech Keeps Wall Street in Holding Pattern

A pivotal Federal Reserve speech kept Wall Street in a holding pattern Friday, as traders counted down to remarks by the central bank’s chairman at an annual economic symposium.

Stocks tread water before Jackson Hole

The S&P 500 added 0.1% in early trading. The Dow Jones Industrial Average rose 89 points, or 0.2%, and the Nasdaq composite was nearly unchanged. The bond market also held steady with less than half an hour to go before Kevin Warsh delivered his first speech as Fed chairman in Jackson Hole, Wyoming, a mountain setting that has hosted major Fed policy announcements in the past.

Warsh faces pressure for clarity

Warsh has insisted since taking the chairmanship that he wants to give markets fewer clues about the Fed’s interest rate plans, preferring that traders react to incoming economic data rather than to central bank signals. But he is under pressure to clarify whether his tough talk on returning inflation to the Fed’s 2% target will be followed by action. The Fed has held its benchmark rate steady since December, even as inflation stays well above that goal.

Higher rates could help cool inflation but would also slow the economy and weigh on investment prices. President Donald Trump, who appointed Warsh, has repeatedly pushed for lower rates rather than higher ones.

Treasury intervention shows limited effect

The U.S. Treasury Department made an unusual move last week to intervene in the bond market and push down yields on longer-term Treasurys, though analysts said the effect would likely be limited. The 10-year Treasury yield edged up to 4.68% from 4.67% late Thursday.

Gap surges, Marvell slides

Gap jumped nearly 20% after posting stronger quarterly profit than analysts expected and naming retail veteran Michael Francis to lead its Old Navy stores.

Marvell Technology fell 7.9% despite reporting profit and revenue that beat expectations. CEO Matt Murphy said the company’s AI-related business remains strong and raised its revenue growth forecasts, but analysts said much of that optimism was already priced into a stock that had surged 184% this year.

Mixed moves overseas

European indexes rose broadly following a mixed session in Asia. South Korea’s Kospi fell 1.8%, while France’s CAC 40 gained 1%, among the day’s bigger global moves.