Stocks rise as traders await Jackson Hole, wage adjustment stalls rate bets

• Stocks ended higher Wednesday as traders took in jobs data and awaited the start of the Jackson Hole conference.

• Revised employment data show the economy created 818,000 fewer jobs than initially expected.

• Investors are looking for Powell to give more guidance on Fed policy at Jackson Hole on Friday.

U.S. stocks rose Wednesday as traders awaited the start of the Federal Reserve’s economic conference in Jackson Hole and factored in revised employment data for the past year.

Major stock indexes rose, while Treasury yields fell during Wednesday’s session.

The Bureau of Labor Statistics has released revised employment figures from April 2023 to March 2024, which showed that the U.S. economy created 818,000 fewer jobs during that period than initially reported.

The new figures, which reflect a weaker labor market over the period, have bolstered confidence that the Fed is prepared to ease monetary policy and deliver potentially deeper rate cuts than previously expected.

Markets are pricing in a 39% chance that the Fed will cut rates by 50 basis points in September, up from less than 30% earlier this week, the report said. CME FedWatch Tool.

“If you’re in the September rate cut camp, this data pretty much seals the deal on what [the] “The Fed needs to cut rates,” Jamie Cox, managing partner of Harris Financial Group, said in a statement.

Investors were also reassured by the final minutes of the Fed meeting, which showed that the majority of FOMC members believe it would be “likely appropriate” to begin cutting interest rates in September, provided economic data continues “to arrive roughly as expected,” the FOMC said. minutes said.

It’s a considerably more dovish tone than central bankers have taken throughout the year, with Fed Chairman Powell previously saying the central bank needed more confidence that inflation was back on track before easing policy.

“Nevertheless, overall, the FOMC appears comfortable enough – and concerned enough – that the start of the easing cycle will help ensure that the economic backdrop, particularly the labor market, does not deteriorate at a marked pace,” added Quincy Krosby, chief global strategist at LPL Financial.

Investors are awaiting Powell’s speech at the Fed’s annual retreat in Jackson Hole on Friday, where the central bank chief is expected to provide further guidance on policy through the end of the year.

Here’s where the U.S. indices stood at 4 p.m. on Wednesday:

The story continues

Here’s what else is happening today:

In commodities, bonds and cryptocurrencies:

• Oil futures fell. West Texas Intermediate Crude oil fell 1.7% to $71.93 a barrel. Brent crude oilthe international benchmark index, fell 1.45% to $76.09.

• Gold rose slightly to $2,552 an ounce.

• The 10-year Treasury yield fell two basis points to 3.795%.

• Bitcoin jumped 3.4% to $61.563.

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