Wall Street closed lower on Thursday, pulled down by utilities and consumer stocks. Investors continued to grow further cautious, worried that Fed chair Jerome Powell might deliver hawkish comments on Friday that could fuel market volatility. Unexpectedly high initial jobless claims reported for the week also weighed on the markets. All three benchmark indexes closed in the red.
The Dow Jones Industrial Average (DJI) fell 0.3%, or 152.81 points, to close at 44,785.50. Twenty-three components of the 30-stock index ended in negative territory, while seven ended in positive.
The tech-heavy Nasdaq Composite slid 72.54 points, or 0.3%, to close at 21,100.31.
The S&P 500 lost 25.61 points, or 0.4%, to close at 6,370.17. Nine of the 11 broad sectors of the benchmark index closed in the red. The Consumer Staples Select Sector SPDR (XLP), the Utilities Select Sector SPDR (XLU) and the Consumer Discretionary Select Sector SPDR (XLY) declined 0.9%, 0.7% and 0.6%, respectively, while the Energy Select Sector SPDR (XLE) advanced 0.7%.
The fear gauge CBOE Volatility Index (VIX) increased 5.8% to 16.60. A total of 12.28 billion shares were traded on Thursday, lower than the last 20-session average of 17.08 billion. Decliners outnumbered advancers by a 1.6-to-1 ratio on the NYSE.
Investor sentiment continued to be cautious on Thursday as Wall Street braced for Fed Chair Jerome Powell’s closely awaited remarks at the Jackson Hole symposium. With the S&P 500 marking its fifth consecutive decline and both the Dow and Nasdaq retreating in the session, markets reflected growing uncertainty about the Fed’s next move.
At the core of the trepidation lies Powell’s much-awaited keynote speech at Jackson Hole, slated for Friday, which carries the potential to reshape expectations for the Fed’s policy path. The anticipation surrounding Powell’s remarks created a tense atmosphere, as traders tried to gauge whether the central bank would signal a firmer commitment to keeping rates higher for longer. Expectations for a September rate cut, once considered almost certain, had eased in recent days as economic data painted a mixed picture. Rising bond yields underscored the shifting mood, pressuring equity markets that had grown reliant on the prospect of monetary easing.
The focus now turns squarely to Powell’s speech, widely seen as the most significant event of the week. Any hint of hawkishness could unsettle equities further, while even neutral commentary might still be interpreted as limiting the scope for aggressive rate cuts this year. With volatility risks elevated, many investors opted to stay on the sidelines, awaiting clarity on whether the Fed will prioritize inflation control or lean toward supporting growth. Utilities and consumer stocks suffered the most in the session.
