Stock Futures Rise as Traders Await Fed Chair Jerome Powell’s Key Policy Speech on Rate Cuts

Stock futures advanced Friday as investors eagerly await Fed Chair Jerome Powell’s critical speech at the annual Jackson Hole conclave, where he is expected to provide guidance on future rate cuts. Futures on the Dow Jones Industrial Average climbed by 133 points (0.3%), while the S&P 500 and Nasdaq-100 futures increased by 0.5% and 0.7%, respectively.

Powell’s speech, scheduled for 10 a.m. ET, is anticipated to lay the foundation for the Federal Reserve’s first rate cut in over four years, as the central bank aims to address easing pricing pressures and cooling economic growth. However, Powell may offer limited insights into the timing and scale of the upcoming reductions.

“Powell is expected to lay the groundwork for the Fed’s first rate cut in over four years,” said Adam Turnquist, chief technical strategist at LPL Financial. “Signs of reduced pricing pressures and cooling economic growth will likely be enough for policymakers to start reducing the target rate.”

Market Sentiment on Rate Cuts

Market participants are largely anticipating a quarter percentage point cut at the Fed’s September 17-18 meeting, with a one-in-four chance of a more aggressive half-point reduction, according to the CME Group’s FedWatch tool. This outlook follows the release of minutes from the Fed’s July meeting, where the “vast majority” of members indicated support for a September rate cut.

Thursday’s Market Recap

Ahead of Powell’s speech, stocks came under pressure Thursday as Treasury yields surged. The S&P 500 fell 0.9%, while the tech-focused Nasdaq Composite dropped 1.7%, marking its worst day since August 5. The Dow Jones Industrial Average lost 177 points.

Despite Thursday’s losses, the Dow and the S&P 500 remain modestly up for the week. However, the Nasdaq is down 0.1% week-to-date, potentially marking its fifth negative week in the past six.