Markets got what they wanted in Federal Reserve Chair Jerome Powell’s Jackson Hole speech: a clear signal that rate cuts are back on the table.
Fed Chair Jerome Powell signals path to rate cuts in Jackson Hole speech
“With policy in restrictive territory, the baseline outlook and the shifting balance of risks may warrant adjusting our policy stance,” Powell said. His comments immediately boosted equities, as traders raised the odds of a September quarter-point cut to 83% (from 75% yesterday).
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Dow Jones Industrial Average: +1.9% (846 points), closing at a record high
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$NASDAQ(.IXIC)$ : +1.9%
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$S&P 500(.SPX)$ : +1.5%
After weeks of anxiety that easing might be delayed, Powell’s remarks shifted the market narrative from inflation fears to employment concerns, underscoring the Fed’s evolving priorities.
Policy & Tariffs: A Softer Stance
Powell backed away from emphasizing tariff-driven inflation risks, hinting the Fed is more concerned about protecting growth than policing prices. That nuance reassured investors already uneasy about tariff fallout.
Intel & Washington: A New Playbook
In a late-day surprise, $Intel(INTC)$ confirmed the U.S. government acquired a 9.9% stake in the company. The deal converts unpaid Chips Act funding into equity, a precedent-setting move by the White House.
Intel, under pressure from advanced rivals, had limited bargaining power. Yet investors embraced the outcome, sending shares up 5.5%. The positive reaction suggests markets may now prize political alignment and federal support over traditional notions of shareholder dilution, marking a new era in corporate-government relations.
Looking Ahead: Data & Earnings
The coming week brings both key economic indicators and heavyweight earnings:
Economic Data
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Monday : New home sales.
Tuesday: Durable goods orders, Consumer Confidence.
Thursday: Q2 GDP (second estimate), Pending home sale.
Friday: PCE Price Index (Fed’s preferred inflation gauge), the most anticipated release of the week.
Earnings Highlights
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Monday–Tuesday: PDD Holdings, Semtech, Okta, Box.
Wednesday: $NVIDIA(NVDA)$ , CrowdStrike, Snowflake, Trip.com, HP, Chewy.
Thursday: Marvell, Autodesk, Affirm, Dollar General, Ulta, Gap.
Friday: $Alibaba(BABA)$
Retail names from Best Buy to Foot Locker will also provide fresh insight into consumer resilience.
Conclusion
Powell’s Jackson Hole message has re-energized markets, driving the Dow to its first record of the year. But the real test lies ahead: whether PCE confirms inflation is cooling enough to justify rate cuts. At the same time, Washington’s unprecedented stake in Intel highlights a shifting corporate landscape where policy and profits are more tightly intertwined than ever.
For now, investors are celebrating, but September may bring tougher math…
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This summary is for informational purposes only and does not constitute financial advice. Investors should conduct their own research before making investment decisions.
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