By Mike Dolan
LONDON (Reuters) – What matters in U.S. and global markets today
By Mike Dolan, Editor-At-Large, Finance and Markets
U.S. tech stocks seem to have found a level following two days of sharp pullbacks, but the Treasury market was unnerved by the latest Federal Reserve drama just as everyone awaits the central bank’s annual Wyoming jamboree.
U.S. stock futures ended in the red again on Wednesday, driven by a whole host of AI and tech sector jitters ahead of Nvidia’s big earnings release next week. But stock futures seemed to find a foothold ahead of today’s bell, with attention turning back to the Fed following President Trump’s demand for the resignation of another Fed board member – Lisa Cook – over allegations of mortgage fraud that she insists she will contest.
* If Cook were forced out, Trump would then likely secure a majority of his appointees on the seven-person Fed board by next summer. If Chair Jerome Powell, who gives his keynote Jackson Hole speech on Friday, steps down as a board member when his chairmanship ends in May, then a majority of deep rate cut advocates could well emerge on the Fed’s policymaking committee with the support of just one regional Fed boss.
* Despite the board machinations, minutes from the Fed’s last meeting showed two policymakers – Christopher Waller and Michelle Bowman – were alone in voting for a rate cut and it recounted how “almost all” favored holding the policy rate steady last month. Fed futures pricing for September’s meeting slipped back to show less than an 80% chance of a rate cut and Treasury yields nudged higher, with a mixed review of the latest 20-year bond auction. The dollar was steady but gold firmed after the Cook story, giving up some of that today.
* The big economic releases around the world today were early August business surveys, which came in above forecast in Europe and Japan – propping the euro, sterling and yen even though stocks in all three areas fell back. U.S. equivalent surveys are due later, with the Philadelphia Fed’s August survey also released alongside closely watched jobless claims updates and existing home sales data for July. Walmart tops the earnings diary in a busy week for big retailers.
In today’s column, I look at the extraordinary moves by the Trump administration to propose taking stakes in big chipmaking firms, which would radically shift U.S. industrial policy and raise questions about what might next be seen as “strategic”.
Today’s Market Minute
* Financial markets are taking in a collective breath ahead of Jerome Powell’s eighth and final keynote Jackson Hole speech as Federal Reserve Chair. If the moves following his last seven are any guide, writes ROI columnist Jamie McGeever, investors should buckle up for a bumpy ride.
