The U.S. Federal Reserve’s highly anticipated Jackson Hole symposium commences later Thursday, bringing together central bankers from across the globe to deliberate on monetary policy. The focal point will probably be Jerome Powell’s address on Friday – his final one at the annual assembly as Fed chairman – as investors seek indications for a September rate cut following heightened expectations triggered by unexpectedly weak payroll figures at the beginning of the month. Analysts at Bank of America noted, “Powell’s reaction function to recent stagflationary data will be key.” “Will he be influenced by jobs revisions or embrace the labor supply slowdown?” The current market-implied probability of a quarter-point cut on September 17 is 80%, reflecting a decrease from 84% observed the previous day. Powell may leverage his upcoming speech to influence the narrative surrounding his tenure, especially in light of the significant criticism he has faced from President Donald Trump for his decision to abstain from implementing rate cuts this year. The increasing sway of Trump on monetary policy presents a potential challenge to the autonomy of the central bank, a concern that has recently captured the attention of market participants. The president has recently focused his attention on Fed Governor Lisa Cook, as Trump calls for her resignation following allegations from one of his political allies regarding mortgages she possesses in Michigan and Georgia.

U.S. stock futures exhibited limited fluctuations on Thursday in anticipation of significant labor market data and the commencement of the Federal Reserve’s Jackson Hole symposium. At 03:00 ET (07:00 GMT), the S&P 500 futures exhibited a marginal decline of 1 point, representing a decrease of 0.1%. In contrast, Nasdaq 100 futures demonstrated a slight increase of 12 points, also reflecting a rise of 0.1%, while Dow futures experienced an uptick of 50 points, equivalent to a 0.1% gain. The major indices exhibited a mixed performance on Wednesday, as the Dow Jones Industrial Average recorded a modest gain, whereas both the S&P 500 and the Nasdaq Composite experienced declines. This resulted in a four-day decline for the broad-based S&P 500, primarily driven by significant pressure from technology stocks. The minutes from the last Fed policy meeting revealed that a significant number of policymakers continue to express concerns regarding the labor market and inflation. The two dissenting voices against the U.S. central bank’s decision to maintain interest rates at their current level last month seem to have not garnered additional support from their colleagues. “Almost all participants viewed it as appropriate to maintain the target range for the federal funds rate at 4.25% to 4.50% at this meeting,” the minutes of the July 29-30 meeting stated. Later in the session, weekly jobless claims are anticipated to reveal a modest uptick in the count of Americans filing for unemployment benefits for the first time. In July, we anticipate the release of existing home sales figures alongside the Philadelphia Fed’s business index. Additionally, the Jackson Hole symposium hosted by the Fed is set to commence later in the day.

Walmart, the world’s largest retailer by sales, headlines the earnings slate Thursday, reporting its second-quarter results before markets open and providing a barometer on the health of the U.S. consumer. Market participants anticipate that the retailer will disclose earnings of 74 cents per share, reflecting an increase of nearly 11% year-over-year, alongside projected revenue of $176.16 billion, representing a 4% rise. Walmart’s recent quarterly sales figures did not fully meet projections; however, the retail sales report for July has provided a positive indication regarding prevailing consumer spending patterns. Walmart’s low-price model and its dominance in the grocery sector position it to navigate economic downturns more effectively than its competitors. The world’s largest retailer by sales has exceeded earnings projections for 11 consecutive quarters, as indicated by LSEG data, resulting in a significant increase in its valuation, despite challenges faced by other consumer staples firms this year. Walmart’s management may adopt a prudent perspective regarding customer demand, particularly as the U.S. labor market shows signs of cooling and inflation experiences an uptick. This caution is further underscored by the ambiguity related to the potential effects of the Trump administration’s tariff policies. The week has witnessed several large retail chains releasing their financial results. Home Depot initiated the week on a positive note on Tuesday, whereas Target experienced a decline on Wednesday following the appointment of insider Michael Fiddelke as CEO and the maintenance of annual forecasts that had been adjusted downward in May.

Has the enthusiasm surrounding artificial intelligence reached its peak, or is it merely taking a moment to catch its breath? Meta Platforms confirmed late Thursday a Wall Street Journal report that it has paused hiring for its new artificial intelligence division, ending a spending spree that saw it spend fortunes on a wave of AI researchers and engineers. The owner of Facebook is part of the cohort known as Wall Street’s AI Hyperscalers, a category of technology giants investing substantial sums, amounting to hundreds of billions of dollars, in the advancement of new AI models and the expansion of data center infrastructure. Meta has allocated a substantial $72 billion for AI expenditures this year. A spokesperson for Meta indicated that the pause was merely “some basic organizational planning: creating a solid structure for our new superintelligence efforts after bringing people on board and undertaking yearly budgeting and planning exercises.” Nonetheless, the recent escalation in capital expenditures has emerged as a significant point of concern for investors, who are increasingly questioning whether the heightened costs and stock-based compensation packages provided by Meta could adversely impact overall investment returns in the firm. A report from the Massachusetts Institute of Technology, released earlier this week, asserted that 95% of AI ventures remained unprofitable, thereby amplifying skepticism regarding the magnitude of AI expenditures.

On Thursday, oil prices experienced an uptick, contributing to a series of recent increases, supported by indications of robust demand in the United States, which stands as the foremost consumer of energy globally. At 03:00 ET, Brent futures experienced an increase of 0.3%, reaching $67.30 per barrel, while U.S. West Texas Intermediate crude futures saw a rise of 0.8%, settling at $63.22 per barrel. Both contracts experienced an increase of over 1% in the previous session. According to the U.S. Energy Information Administration, there was a notable decline in U.S. crude inventories, which fell by 6 million barrels last week. Additionally, gasoline stocks experienced a decrease of 2.7 million barrels, both figures surpassing expectations. This reflects a consistent demand for travel during the peak summer season, which mitigates certain apprehensions regarding global economic instability. Market participants are closely monitoring the ongoing negotiations for a peace agreement in Ukraine, anticipating a decline in oil prices upon the successful conclusion of such a deal. Consequently, the protracted endeavors to establish peace in Ukraine indicate that Western sanctions on the Russian oil supply continue to be enforced, and the potential for more stringent sanctions and additional tariffs on purchasers of Russian oil persists as a looming concern in the market.