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Market Commentary - Foreign Markets
22-Aug-2025 09:44

Wall Street Slips as Investors Await Powell's Jackson Hole Speech, Global Markets Mixed

The S&P 500 slid 25.61 points (0.4%) to 6,370.17, the Nasdaq fell 75.55 points (0.3%) to 21,100.31 and the Dow declined 152.81 points (0.3%) to 44,785.50.

Wall Street showed weakness as investors awaited Federal Reserve Chair Jerome Powell's speech at the Jackson Hole Symposium, which could shape expectations for the September policy meeting. While markets still anticipate a rate cut, the likelihood has dropped to 73.6% from 92.1% a week ago, reflecting uncertainty over upcoming jobs and inflation data.

Comments from Kansas City Fed President Jeffrey Schmid further added caution, stressing the need for very definitive data before any rate move. Meanwhile, Walmart shares fell 4.5% after disappointing Q2 earnings, weighing on market sentiment and adding to investor unease ahead of key economic signals.

The Labor Department released a report showing first-time claims for U.S. unemployment benefits rose by much more than expected in the week ended August 16th. The report said initial jobless claims climbed to 235,000, an increase of 11,000 from the previous week's unrevised level of 224,000.

Retail stocks saw significant weakness amid the steep drop by Walmart, dragging the Dow Jones U.S. Retail Index down by 1.2%. Airline stocks were notably weak, as reflected by the 1% loss posted by the NYSE Arca Airline Index. Gold stocks turned in a strong performance despite a decrease by the price of the precious metal, driving the NYSE Arca Gold Bugs Index up by 2% to its highest closing level in over twelve years. Oil service stocks too saw considerable strength amid a sharp increase by the price of crude oil, with the Philadelphia Oil Service Index climbing by 1.6%.

Asia-Pacific stocks turned in another mixed performance. Japan's Nikkei 225 Index slid by 0.7%, while Australia's S&P ASX 200 Index jumped by 1.1%. The major European markets also ended the day mixed once again. While the French CAC 40 Index fell by 0.4%, the German DAX Index inched up by 0.1% and the U.K.'s FTSE 100 Index rose by 0.2%.

In the bond market, treasuries moved to the downside as traders look ahead to Powell's speech. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, rose 3.4 bps to 4.33%.