Dow futures slipped slightly on Wednesday as investors adopted a cautious stance ahead of Federal Reserve Chair Jerome Powell’s upcoming remarks at the Jackson Hole Symposium.
The broader market has been on a strong run for a while now, with the Dow Jones Industrial Average recently touching a record high, but sentiment turned more tentative as traders awaited clues on the Fed’s policy outlook.
5 things to know before Wall Street opens today
1. Earnings from the big retailers are drawing plenty of attention this morning, with Lowe’s, Target, and TJX all reporting before the bell.
Lowe’s came in strong, posting better-than-expected sales and even raising its full-year forecast. That gave investors a lift and suggested that the home improvement market is holding up better than some had feared.
Target, though, told a very different story. The company logged its eleventh straight quarter of flat or falling sales, and the stock slid hard in early trading.
Management pointed to inflation and changing shopping habits, themes that have dogged the company for nearly three years now, and investors showed little patience.
2. Wall Street will be parsing every line of the Federal Reserve’s July meeting minutes when they land later today.
Traders are hoping the document offers a clearer picture of how divided policymakers really are on the path forward for interest rates.
The split has already surfaced in the form of two dissenting votes for a rate cut, a rare crack in the Fed’s usual show of unity.
With inflation cooling but still running above the Fed’s 2% target, the debate now centers on whether officials are ready to ease up or prefer to keep policy tight a little longer.
3. Tech stocks are once again dragging on the market. Intel, Micron, and Palantir have been among the hardest hit, and their declines have added to the unease that’s been creeping into Wall Street over the past week.
The pullback comes after a long rally that carried the sector to lofty valuations, and some investors are beginning to question whether the momentum can hold.
That nervousness is showing up in the Cboe Volatility Index, which has ticked higher as traders reassess their appetite for risk.
4. US Treasury yields have inched lower, with the 10-year slipping just under 4.3%.
That move has given investors a bit of a mixed signal: on the one hand, softer yields hint at growing bets that the Federal Reserve could take a gentler stance in the months ahead; on the other, inflation hasn’t disappeared, and that keeps the debate alive.
5. Brent crude inched higher as traders balanced supply concerns with geopolitical risks. Inventory data added to the uncertainty, keeping the market on edge.
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