Home News Feeds Stocks open slightly higher ahead of Fed Chair Powell’s speech
Stocks edged higher Friday ahead of the Federal Reserve’s annual Jackson Hole symposium with investors looking for more details into the central bank’s plans to taper monetary stimulus.
The Dow Jones Industrial Average gained 65 points, or 0.1%. The S&P 500 and Nasdaq Composite gained 0.2%.
The Fed summit will be held virtually this year, with Chair Jerome Powell’s speech taking center stage Friday morning at 10:00 a.m. ET. The central bank is trying to prepare markets for when it cuts back its $120 billion in monthly bond purchases, likely this year. With the stock market near records, investors are betting the Fed can remove stimulus without causing a so-called taper tantrum that shoots rates higher rapidly and knocks equities.
“The Fed may start tapering its bond purchases soon, which has caused a lot of angst on Wall Street and Main Street,” said Ally Invest chief investment strategist Lindsay Bell. “While it hasn’t caused any big swings yet, the Fed’s plans may be tough to digest against a backdrop of rising COVID cases and slowing, but solid, economic data. Plus, the market rarely stays quiet for this long.”
Shares of Gap gained nearly 5% after the apparel retailer’s quarterly earnings report beat on top and bottom lines, while Peloton shares dropped after the exercise equipment company’s fourth-quarter financial results missed Wall Street estimates. Peloton fell 7.5%.
Energy stocks were higher, after being among the hardest hit on Thursday. Occidental Petroleum climbed 3% while Diamondback, Devon Energy and Halliburton rose more than 2%.
The three major U.S. indexes closed Thursday’s regular trading session lower. The Dow snapped a four-day win streak while the S&P 500 and the Nasdaq Composite both broke five-day win streaks.
Market participants also monitored new developments in Afghanistan, which appeared to weigh on investor sentiment. The Pentagon on Thursday confirmed that explosions near Hamid Karzai International Airport in Afghanistan killed 13 U.S. service members and wounded 18.
“Markets don’t like uncertainty and the uncertainty in Afghanistan is high and feels like it’s rising,” said Bob Doll, chief investment officer of Crossmark Global Investments.
The three major stock averages are all set to close the week in the green. The Dow is up 0.3% week-to-date, while the S&P 500 is up 0.6% and the Nasdaq Composite is 1.6% higher.
The indexes are on track to end the month higher. The Dow is up 0.8% in August. The S&P 500 is 1.7% higher and the Nasdaq Composite is up 1.9% this month.
— Jeff Cox contributed to this report.