US futures
Dow futures -0.20%, S&P futures -0.87% & Nasdaq futures -1.5%
In Europe
FTSE 0.40% & DAX0.35%
- Tech stocks extend losses over valuation concerns
- FOMC minutes are in focus today
- The Jackson Hole Symposium kicks off tomorrow
- Oil rises after inventories fall
Tech stocks remain under pressure on valuation worries
Stocks fall with tech leading the declines as markets weigh up yesterday's rotation out of tech and the sustainability of the recent AI-led rally. Retailer earnings as well as the FOMC minutes are also in focus ahead of the Jackson Hole symposium later this week.
The Dow Jones is modestly lower while the S&P 500 and the Nasdaq 100 are under pressure again, as tech stocks fall, adding to aggressive declines from yesterday. Tech giants are dropping amid concerns over valuations, especially AI firms, after research noted that most firms will not be profitable.
Nvidia, Meta, and Alphabet trade around 1% lower.
The Nasdaq and the S&P500 saw their worst session in over 2 weeks yesterday as investors questioned elevated valuations and amid deepening concerns of government interference with companies as they considered taking equity stakes in chip companies in exchange for grants under the CHIPS Act.
Attention is also turning to the release of the Federal Reserve minutes and Fed Chair Powell's speech at the Jackson Hole symposium later this week.
Rates were left unchanged in the meeting in July, and the minutes could set the tone ahead of the central bank’s symposium, which kicks off tomorrow.
Federal Reserve chair Jerome Powell is expected to speak on Friday, and his comments will be scrutinised for any clues over the future path of monetary policy, even as investors are pricing in an 85% probability of a 25 basis point reduction in September
Remarks from Governor Christopher Waller, Atlanta Fed President Raphael Bostic are also expected later today..
Corporate news
Target, the big box retailer, is dropping 10% after quarterly results beat earnings and revenue forecasts. Whilst Target also reiterated its full-year outlook, the market reacted badly to news that CEO brown Cornell will be stepping down to be replaced by CEO Michael Fiddelke.
Lowe's, the home improvement retailer, is rising by 3% after quarterly results, which showed that earnings were ahead of expectations of $4.33 per share, versus $4.24 expected, and revenue came in line with expectations at $23.96 billion.
Estee Lauder is falling 8% after the beauty firm warned that tariff-related headwinds would likely impact profitability for fiscal 2026 by around $100 million. The firm also guided for fiscal 2026 EPS in a range below consensus estimates and revenue growth of 2.5% less than the 2.6% forecast.
S&P 500 forecast – technical analysis
S&P500 ran into resistance at 6485 and has eased lower. The price is holding above the rising trend line support dating back to mid-May, and momentum is slowing with the RSI pointing lower. Buyers will look to defend the trendline support and rise towards 6485 and new record highs. Should sellers take out the 6400 support, the door opens to 6210, the August low. A break below here creates a lower low.
FX markets – USD falls, GBP/USD is flat
The USD is falling, snapping a two-day winning run as traders look ahead to the Fed minutes and a speech by Fed Chair Powell at Jackson Hole on Friday for further clues on the path of rate cuts. A cautious-sounding Powell could offer temporary support to the USD.
The EUR/USD is rising despite cautious remarks from ECB President Christine Lagarde. Lagarde warned growth in the region could falter in the quarter as frontloading unwinds. She sees some trade uncertainty lingering despite the recent deal. Data showed German PPI fell for a fifth straight month.
The GBP/USD is Unchanged despite hotter-than-expected UK inflation data. The UNS figures revealed that UK CPI rose 3.8% in July, up from 3.6% in June, and ahead of expectations of 3.7%. Core inflation held steady at 3.7%. The data support a cautious approach from the BoE regarding rate cuts and the market doesn’t see another rate reduction until February.
Oil rises after oil inventories fall
Oil prices are rising on Wednesday after a fall in NUS crude oil inventories and as investors await the next steps in the Ukraine-Russia move towards peace.
Oil prices had fallen over 1% on Tuesday amid optimism that an agreement to end the Russia-Ukraine war seemed closer. However, Trump admitted that Putin may not want to make a deal, adding a risk premium to the oil price.
Data from the API showed that US crude stocks fell by 2.42 million barrels, more than the 1.2 million barrel draw expected. This followed a 3 million barrel build in the previous week. So far this year, oil inventories are up by 8 million barrels.
