US Stocks Close Lower as Jackson Hole Speech Tilts Fed Toward September Rate Hike
Key Takeaways
- •Fed Chair Warsh's Jackson Hole remarks shifted policy expectations toward a September rate hike, with another possible by year-end.
- •The Russell 2000 fell 1.39% to 2,972.37, leading the day's decline as small caps are more sensitive to higher rates.
- •Marvell Technology dropped 10.28% but stayed above its 200-hour moving average at $214.50 and 100-day moving average at $211.28.
- •Nvidia fell 4.57% to $217.55, giving back part of its 8.74% gain from the prior day's better-than-expected earnings.
- •For the week, the Dow, S&P 500, Nasdaq Composite, and Nasdaq 100 rose between 0.43% and 0.85%, while the Russell 2000 lost 1.50%.
Federal Reserve Chair Warsh's speech at Jackson Hole shifted the Fed's tightening bias in favor of a rate hike in September and opened the door to the possibility of another hike by the end of the year. The annual Jackson Hole symposium has long served as a venue where Fed chairs signal upcoming policy shifts, and markets closely watch the remarks for guidance on the rate path. The outlook did not sit well with traders, and U.S. stocks closed lower, with small-cap stocks bearing the brunt of the selling as the Russell 2000 posted the steepest decline. Smaller companies, which tend to carry more floating-rate debt and rely more heavily on bank borrowing, are typically more sensitive to higher interest rates than their large-cap counterparts. The Nasdaq 100 and the Nasdaq Composite Index also fell, by 0.70% and 0.50% respectively.
Closing levels for the major U.S. indices:
- Dow Jones Industrial Average: fell 9.00 points, or 0.02%, to 53,565.35
- S&P 500: fell 19.23 points, or 0.25%, to 7,711.75
- Nasdaq Composite: fell 138.93 points, or 0.52%, to 26,402.42
- Russell 2000: fell 41.97 points, or 1.39%, to 2,972.37
- Nasdaq 100: fell 208.13 points, or 0.70%, to 29,433.43
For the trading week:
- Dow Jones Industrial Average up 0.53%
- S&P 500 up 0.49%
- Nasdaq Composite up 0.85%
- Russell 2000 down 1.50%
- Nasdaq 100 up 0.43%
Marvell Technology shares tumbled 10.28% but stayed above the 200-hour moving average at $214.50 and the 100-day moving average at $211.28 (see post here). Holding above those key moving averages keeps buyers in play, but the price needs to hold and extend back above the 100-hour moving average at 229.72 to tilt the short-term technical bias back to the upside.
Nvidia fell 4.57% to $217.55, retracing part of yesterday's 8.74% gain, which followed better-than-expected earnings. For the week, the stock is up 1.32%, but the weekly high of $230.47 fell short of the all-time high at $236.54 despite the strong earnings and forward expectations. As two of the most closely watched AI chipmakers, Marvell and Nvidia often trade in sympathy, and their post-earnings swings highlight how much attention investors are paying to the semiconductor sector's outlook even as broader monetary policy concerns weigh on the wider market.
