Wall Street Down Ahead of Powell’s Anticipated Speech

The benchmark indices of the New York Stock Exchange (NYSE) closed lower on Thursday, as Wall Street was impacted by the decline in risk appetite, ahead of a speech by the Federal Reserve Chairman Jerome Powell at the Jackson Hole economic symposium.

This ended five and four consecutive sessions of gains for the S&P500 and the Dow Jones indices, with the first and the Nasdaq recently registering new record highs.

Anticipation for more signals by Powell about tapering this year impacted the market, especially as the Dallas Fed President Robert Kaplan expressed support for a decision on scaling back asset purchases in September and going through with it in October.

Kansas City Fed President Esther George and St. Louis Fed President James Bullard expressed similar views.

Earlier, data by the U.S. Department of Labor reported the first increase after four consecutive declines in initial jobless claims, rising by 4,000 to 353,000 last week.

Meanwhile, the U.S. Bureau of Economic Analysis (BEA) adjusted estimates for gross domestic product (GDP) growth in the second quarter upwards to a rate of 6.6%, from a previous estimate of 6.5%.

The market also remains under concerns about a slower recovery with the spread of the coronavirus Delta variant.

The Dow Jones Industrial Average dropped by 192.38 points, or 0.54%, to close at 35,213 points.

The S&P 500 index lost 26.27 points, or 0.6%, to end the session at 4,469.92 points.

Meanwhile, the Nasdaq Composite index declined by 96 points, or 0.64%, to finish at 14,945.8 points.

In other news, oil prices finished lower with its worst losses in a week, ending a streak of gains since the beginning of the week.

Brent crude futures lost $1.18, or 1.63%, and closed at $71.07 per barrel, while the WTI futures settled lower by 94 cents, or 1.38%, at $67.42 per barrel.

Stocks were pressured by the rise Treasury bond yields, with the 10-year Treasury bond yield leveling up by a single basis point to 1.35%. This also helped the Dollar Index (DXY) scores its first rise in five sessions, with anticipation for the annual economic conference.

With this year’s academic symposium being held under the theme “Macroeconomic Policy in an Uneven Economy,” Powell will likely discuss the uneven and incomplete recovery, as well as the signs of a substantial further progress leading to a shift in policy, and disparities and climate risks within the economy.