The S&P 500 fell for a fourth consecutive session, deepening a tech-driven selloff as investors turned cautious ahead of Federal Reserve Chair Jerome Powell’s highly anticipated speech at the Jackson Hole Symposium.
The benchmark index slid roughly 0.3%, while the Nasdaq Composite dropped more sharply as mega-cap technology names continued to underperform. The Dow Jones Industrial Average closed lower, losing around 186 points. The Russell 2000 small-cap index eked out a modest 0.2% gain, suggesting rotation into smaller names.
Tech Sector Under Pressure
The tech rout has been the defining feature of this week’s trading. After months of leadership from artificial intelligence and semiconductor stocks, the sector has faced a broad reassessment. Rising bond yields, driven by expectations the Fed will hold rates higher for longer, have weighed on growth-oriented companies whose valuations are most sensitive to discount rate changes.
Several high-profile tech names have been among the hardest hit, with investors taking profits after a powerful post-tariff rally that had lifted the S&P 500 more than 28% from its early April lows. The pullback has been orderly so far, but volume has picked up as institutional investors reduce exposure to crowded long positions.
Eyes on Jackson Hole
All eyes now turn to Powell’s keynote address at the Fed’s annual economic symposium in Jackson Hole, Wyoming. The speech is widely seen as the most important near-term catalyst for markets, with investors parsing every word for clues about the central bank’s rate path.
Markets are currently pricing in an 83% probability of a 25 basis-point rate cut at the Fed’s September meeting, according to CME FedWatch data. That expectation was set by softer-than-expected July payroll and consumer inflation readings. However, stronger producer inflation data released last week tempered hopes for a larger 50 basis-point move.
Mixed Economic Signals
The backdrop remains complicated. While consumer inflation has shown signs of cooling, the labor market has displayed pockets of weakness, with the June jobs report showing just 57,000 new positions added, far below consensus. Meanwhile, the July Manufacturing PMI jumped to 53.3 from 49.8, signaling an unexpected expansion, while the Services PMI held firm at 55.4.
Gold futures climbed roughly 1% to around $3,390 an ounce, reflecting safe-haven demand amid the equity uncertainty. Bond yields were marginally higher as investors positioned ahead of the Jackson Hole event.
Sources: Investing.com; Benzinga; Proactive Investors; CME FedWatch
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