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Stocks rose in thin summer trading as investors reviewed a batch of economic data and awaited the annual gathering of central bankers in Jackson Hole, Wyo.
Stocks have mostly fallen in recent sessions as money managers await Federal Reserve Chairman Jerome Powell’s speech in Wyoming on Friday. Some expect him to make the case for plowing ahead with interest-rate rises to curb decades-high inflation, a stance that could take the wind out of the rally that took off in mid-June. Another item on the list of investors’ concerns is a major slowdown in China’s economy.
Investors are placing bets on how Mr. Powell’s tone will come off and whether it indicates big rate increases are still to come. The S&P 500 gained 0.8% in early Thursday morning trading and the technology-focused Nasdaq Composite Index added 1%. The Dow Jones Industrial Average advanced 0.4%.
Government bonds were relatively flat, with the yield on 10-year Treasury moving to 3.110% from 3.105% Wednesday. The move in yields came after data showed the U.S. economy shrank by 0.6% in the second quarter, a smaller decline than that shown by a preliminary estimate.
Stimulus measures laid out by Beijing have led to some hope that the slowdown in the world’s second-largest economy will begin to abate. Earlier this week, the Chinese government unveiled a 19-point plan to support growth, including the equivalent of $146 billion in stimulus funding.
Some analysts say stocks are likely to encounter more volatility after Mr. Powell’s address. “I’m very skeptical of whether this better tone, and this softer dollar, can hold after the Fed speech,” said
Jane Foley,
senior foreign-exchange strategist at Rabobank. “Even if it’s not quite as hawkish as the uber-hawks are expecting, it’s still going to be quite hawkish.”
The annual symposium gets under way Thursday. Mr. Powell is due to speak Friday followed by European Central Bank board member Isabel Schnabel on Saturday.
Mr. Powell’s comments will set up the debate between Fed officials for their next policy meeting Sept. 20-21, which is likely to focus on whether to raise rates by half a percentage point or 0.75 point. Officials agreed at their meeting last month they needed to continue raising interest rates, but they signaled greater caution about the pace of future increases.
Thin summer trading may be leading to exaggerated moves, analysts said. Just 8.84 billion shares in stocks listed on the New York Stock Exchange, the Nasdaq and two smaller exchanges changed hands Wednesday—the lowest volume since New Year’s Eve 2021, according to Dow Jones Market Data.
Shares of electric-vehicle maker
fell 0.6% after a 3-for-1 split of the company’s shares took effect late Wednesday.
plunged 20% after the pandemic darling posted a quarterly loss of $1.2 billion.
Elsewhere on the economic front, labor-market data showed that new claims for unemployment benefits fell to 243,000 last week, from a revised 245,000 the week before.
In commodities, Europe’s benchmark natural-gas price surged a further 6%, putting the market on track for a record close and adding pressure to the continent’s industrial sector.
In overseas markets, Hong Kong’s Hang Seng rose 3.6%. Traders and investors said widespread speculation about an imminent audit deal between U.S. and Chinese regulators helped lift dual-listed stocks such as
and
which jumped close to 6% and 7% respectively.
The Hang Seng Tech index is down almost 25% this year, in part because of worries that companies would be booted off American exchanges if their audit records cannot be inspected by U.S. regulators for three consecutive years.
—Vicky Ge Huang and Matthew Thomas contributed to this article.
Write to Joe Wallace at joe.wallace@wsj.com
Traders worked on the floor of the New York Stock Exchange on Monday.
Photo:
Michael M. Santiago/Getty Images
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