S&P 500 Futures stabilize below 4,400 after a slump, yields rebound as Fed Chair Powell’s speech loom

• Market sentiment remains dicey as traders await key central bankers’ speeches.
• S&P 500 Futures struggle for clear directions after falling the most since December 2022 the previous day.
• US 10-year Treasury bond yields print mild gains to reverse early-week pullback from multi-year high.
• Fed Chair Powell needs to justify hawkish policy to keep yields, Greenback firmer but defending equities is a tough task.

The risk appetite shows the market’s cautious mood ahead of the top-tier central bankers’ speeches at the Jackson Hole Symposium on Friday. Adding strings to the lackluster markets is an absence of major data in Asia, as well as mixed sentiment surrounding the major economies.

While portraying the mood S&P500 Futures remain depressed around 4,385 after falling the most since December 2022 the previous day, mostly unchanged of late. That said, the US 10-year Treasury bond yields extended the previous day’s rebound from the weekly low to reverse the previous pullback from the highest level since 2007, up two basis points (bps) to 4.25% by the press time.

Furthermore, the US Dollar Index (DXY) rose to a fresh high in 11 weeks while the Gold Price prints mild losses on its way to posting the first weekly gain in five.

It’s worth noting that the stocks in the Asia-Pacific zone edge lower while tracking Wall Street’s heavy losses, as well as the downbeat concerns about China.

On Thursday, upbeat details of the US Durable Goods Orders for July and firmer mid-tier activity data, as well as employment clues, allowed the Fed policymakers to remain hawkish and sour the sentiment. On the same line was the recently fading optimism about the US-China ties as the Chinese Commerce Ministry said in a statement on Thursday, “China will state its stance on economic and trade matters of concern,” while adding that they will push financial institutions to expand credit to businesses. China’s Commerce Ministry also called on the US to cancel potential arms sales to Taiwan, which in turn flagged fears of geopolitical tension when US Commerce Secretary Gina Raimondo visits Beijing next week.

Elsewhere, Japan prints softer inflation figures but the outcome appears way too far beyond the Bank of Japan (BoJ) target and hence challenges the optimists.

Above all, the PMI-linked optimism fails to prevail after mostly upbeat US data and central bank statements favoring the “higher for longer” rate bias.

Looking forward, top-tier central bank leaders are likely to shake the markets and will be interesting to watch. Among them, European Central Bank (ECB) President Christine Lagarde and Fed Chairman Jerome Powell will be eyed closely.

also read: Forex Today: A firm Dollar awaits Fed’s Powell