Wall Street rises at open before Jerome Powell's Jackson Hole address; tech underperforms

Market participants remain heavily focused on the Fed’s September meeting, with futures pricing suggesting a three-in-four chance of a quarter-point cut.

US equities opened higher on Friday as investors turned their attention to Federal Reserve Chair Jerome Powell’s speech at Jackson Hole, hoping for greater clarity on the central bank’s next policy move. The Dow Jones Industrial Average jumped nearly 300 points, or 0.7 percent, while the S&P 500 added about 0.3 percent. The Nasdaq Composite hovered close to flat, reflecting lingering caution around big technology names that have come under pressure this week.

Market participants remain heavily focused on the Fed’s September meeting, with futures pricing suggesting a three-in-four chance of a quarter-point cut. The prospect of lower borrowing costs has already begun to shift momentum away from this year’s megacap tech leaders and toward smaller companies and value-oriented stocks. That rotation has been evident in the past few sessions, with the Dow holding on to modest weekly gains even as the S&P 500 and Nasdaq have slipped.

Ahead of Powell’s remarks, sentiment is finely balanced. Optimists argue that the Fed is preparing to begin a measured easing cycle that could underpin equities into year-end, while others warn that any hawkish inflection in Powell’s tone could unsettle markets already showing signs of fatigue. “What Powell is likely to do is explain and justify why the Fed can begin cutting rates in September,” said Jim Caron of Morgan Stanley Investment Management, who believes such a signal would be broadly supportive for risk assets. Still, investors are acutely aware that the S&P 500 and Nasdaq are down about 0.9 and 2 percent respectively this week, underlining how sensitive sentiment remains to both earnings disappointments and policy signals.

Across the Atlantic, European stocks edged higher through Friday afternoon, echoing Wall Street’s cautious optimism while awaiting Powell’s message. The pan-European Stoxx 600 index was up around 0.2 percent, on course for a third consecutive weekly gain. Germany’s DAX staged a modest rebound even as growth data confirmed a contraction in the second quarter, while London’s FTSE 100 held steady, supported by strength in banking and energy names. Notably, Standard Chartered shares advanced after a favorable update from U.S. regulators, while industrials and defense names also found buyers. Overall, Europe’s tone was steady rather than exuberant, a reflection of markets pausing before the Fed chair’s intervention that is expected to set the near-term course for global risk appetite.