S&P 500, Nasdaq on track for 8th daily win as countdown to Jackson Hole begins.
US stocks advanced on Monday after posting their best week in a year as investors began counting down to a speech by Fed Chair Jerome Powell at Jackson Hole that could reset rate cut expectations.
The S&P 500 (^GSPC) rose 0.5%, on pace towards its longest winning streak of the year. The Dow Jones Industrial Average (^DJI) also gained 0.5% or more than 200 points, while the tech-heavy Nasdaq Composite (^IXIC) increased more than 0.5%.
If Monday’s gains hold, the S&P 500 will have stretched its daily wins to eight, its longest streak since November of last year, according to Bespoke Investment data. The Nasdaq was also on track for an eight-consecutive session win.
Stocks were set to consolidate last week’s strong gains as a measure of calm returns to a market previously whipsawed by worries about a potential recession. Last week’s rally recouped the losses stacked up in an early August sell-off as Wall Street fretted about cracks in the economy — concerns that have since been eased by encouraging inflation and consumer spending data.
Focus is already turning to Powell’s speech at the central bank’s Jackson Hole symposium on Friday in a quiet week for economic data. As confidence in a “soft landing” for the economy grows — Goldman Sachs now sees a lower likelihood of recession — the question for investors isn’t whether the Fed will lower interest rates in September but by how much.
As of Monday morning, traders were pricing in a 72% chance the Fed will reduce rates by 0.25% at that meeting and 28% odds for a 0.50% cut, according to the CME FedWatch tool. But the release on Wednesday of minutes from the Fed’s July meeting could sway those bets.
Meanwhile, investors will also keep a watchful eye on the Democratic National Convention, which kicks off on Monday and could bring more insight into what to expect from presidential nominee Kamala Harris.