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The stock market is trying to end a three-day losing streak Wednesday, one that began with Jerome Powell’s hawkish speech at Jackson Hole. Trying, however, remains the key word.
Dow Jones Industrial Average
futures have risen 5, while
S&P 500
futures have gained 0.1%.
Nasdaq Composite
futures have advanced 0.5%.
“[Market] conditions remain choppy in the aftermath of Jackson Hole last week,” writes Craig Erlam, senior market analyst at Oanda.
It’s been all downhill for the stock market since Federal Reserve Chairman Jerome Powell said at the annual Jackson Hole Symposium that the Fed will remain aggressive in lifting interest rates to combat high inflation. That has spurred bets that the Fed will implement a three-quarter point interest rate hike in September, rather than a half-point increase. The fed-funds futures market is reflecting a 72% probability of the larger hike, up from 61% a week ago, but down a tick from Tuesday.
A Wednesday gain shouldn’t be taken for granted, however. Stocks began the day much higher on Tuesday, only for the S&P to end the day below its 50-day moving average, a level that had been support as recently as Monday. “Stocks are coming into the end of summer on a relatively sad note. Three straight days of selling pressure have left the broader market down 5% and below its 50-day MA.
This Friday, the Bureau of Labor Statistics will release the August employment report. Economists are looking for 318,000 jobs to have been added, which would be lower than the 528,000 jobs in July. Markets want to see the labor market cool down, as it could make the Fed slightly more likely to soon slow down the pace of rate hikes. That would spur a stock market rally.
“From a market standpoint, traders will want to see moderation in the labor market to show the Fed’s tightening actions are beginning to cool the labor market which is one of the key steps toward reaching “peak hawkishness,”” writes Sevens Report’s Tom Essaye.
Things could go in the other direction, though. A result that is too hot could embolden the Fed to remain aggressive in lifting rates, which wouldn’t exactly be a welcome sight for the stock market.
Traders are sitting tight until Friday.
Here are six stocks on the move Wednesday:
Alibaba
(ticker: BABA) gained 2% in U.S. premarket trading with Chinese e-commerce peer
JD.com
(JD) also up 2%. The two companies are reportedly among a first group selected for inspection by U.S. audit authorities in the wake of a landmark bilateral deal between the U.S. and China over financial transparency for U.S.-listed Chinese stocks.
Snap
(SNAP) shed 6% in the premarket following a report that said the
Snap
chat parent company plans to lay off 20% of its 6,400 employees in a round of layoffs that will begin Wednesday.
Chewy
(CHWY) lost 11% in the premarket after the online pet goods retailer detailed a disappointing outlook for the current quarter. The company said it expects revenue in the range of $2.44 billion to $2.46 billion, which is well below analysts’ expectations of $2.57 billion.
Bed Bath & Beyond
(BBY)—which has seen its shares on a retail investor-driven roller coaster for more than a month—plunged 16% in the premarket ahead of an expected strategic update. The group, in an S-3 shelf offering, said it would “offer, issue, and sell shares of our common stock from time to time,” without specifying how many shares it would sell.
HP
(
HP
Q) dropped 5% after the PC and printer company posted lower sales than expected for the July quarter and detailed disappointing guidance for the current quarter amid a deterioration of the market for personal computers.
Write to Jack Denton at jack.denton@dowjones.com
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