U.S. stock futures edged slightly lower Friday as investors exercised caution ahead of Federal Reserve Chair Jerome Powell’s speech at the Jackson Hole symposium later in the session. Meanwhile, Meta announced a major deal with Google, and uncertainty surrounds production of Nvidia’s key chips.
Powell to Address Markets
Federal Reserve Chair Jerome Powell is scheduled to speak later at Jackson Hole, the central bank’s annual economic symposium and the week’s focal point for investors seeking guidance on the future path of interest rates.
Expectations for a September rate cut surged earlier in the month following surprisingly soft payrolls data, but these bets have moderated significantly over the past week, setting the stage for market volatility during Powell’s remarks.
The pullback comes after hotter-than-expected producer inflation figures, alongside hawkish comments from Fed officials. Kansas City Fed President Jeffrey Schmid, a voting member, noted that the central bank isn’t rushing to cut rates, citing inflation that remains above the 2% target and a resilient labor market.
Separately, Cleveland Fed President Beth Hammack, a non-voting member, voiced concern Thursday that persistent inflation could rule out a September rate cut. Powell’s address also occurs amid stagflation fears, a mix of sluggish growth and sticky inflation that could constrain the Fed’s ability to ease monetary policy.
The Fed chair may also use the platform to emphasize the central bank’s independence, given criticism from former President Trump. Earlier this week, Trump urged Fed Governor Lisa Cook to resign over mortgage allegations raised by a political ally, intensifying his effort to influence the central bank.
U.S. Futures Drift Lower Ahead of Powell
U.S. futures fell Friday as investors awaited Powell’s speech for clues on monetary policy. At 03:00 ET, S&P 500 futures were down 7 points, or 0.1%, Nasdaq 100 futures fell 60 points, or 0.3%, and Dow futures dropped 20 points, or 0.1%.
Major indices closed lower Thursday, with the S&P 500 marking a fifth consecutive day of declines. All three averages are set for a losing week, with the S&P 500 down 1.2%, the Nasdaq Composite down 2.4%, and the Dow Jones Industrial Average on pace for a 0.4% slide. Investors remain cautious, seeking clarity on the interest rate outlook.
On the corporate side, Intuit (NASDAQ:INTU) and Zoom (NASDAQ:ZM) will be in focus after reporting results Thursday after market close.
Nvidia H20 Chip Production Faces Hurdles
Nvidia (NASDAQ:NVDA) has reportedly asked some suppliers to halt production of its H20 general processing units for China, as regulatory scrutiny in Beijing complicates operations.
Reuters reported that Nvidia asked Foxconn to suspend work on the H20 AI chip, the company’s most advanced product currently allowed in China. Additionally, The Information noted that Arizona-based Amkor Technology, handling advanced packaging, and South Korea’s Samsung Electronics, supplying memory, were asked to pause production.
Last month, Nvidia met with the Cyberspace Administration of China, which expressed concerns that the chips might contain certain tracking technology. Nvidia resumed H20 sales in July after shipments were halted in April due to U.S. restrictions. “We constantly manage our supply chain to address market conditions,” Nvidia said in a statement, declining to provide further details.
Meta Signs $10 Billion Deal with Google
Meta Platforms (NASDAQ:META) has inked a $10 billion agreement with Alphabet’s Google (NASDAQ:GOOGL), according to The Information. The deal will see Meta use Google Cloud servers, storage, and services over the next six years.
Meta, alongside other Wall Street AI hyperscalers, is racing to build advanced AI systems while investors push for returns on massive AI investments. Last month, the company raised the lower end of its annual capital expenditure forecast by $2 billion to $66–72 billion.
To help fund the infrastructure for AI, Meta plans to offload $2 billion in data center assets, the company disclosed earlier this month.
Oil Prices Track Weekly Gains
Crude oil prices inched higher Friday, on course to end a two-week decline, amid stalled peace talks between Russia and Ukraine. At 03:00 ET, Brent futures rose 0.1% to $67.68 per barrel, and U.S. WTI futures gained 0.1% to $63.59 per barrel. Both contracts had increased over 1% in the previous session, with Brent up 3% for the week and WTI up roughly 1.4%.
The ongoing war in Ukraine continues to disrupt supply, while a larger-than-expected drawdown in U.S. crude inventories last week signaled strong demand, supporting prices.
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