The Dow, S&P 500 and Nasdaq each edged higher Friday morning as Federal Reserve Chair Kevin Warsh wrapped his Jackson Hole speech, saying the central bank may not be done fighting inflation. The Russell 2000 lagged behind, Microsoft broke out to a new entry point, and PayPal slid after a buyout bid fell through.
The Dow Jones Industrial Average, S&P 500 and Nasdaq composite each added 0.2% in morning trade Friday, while the Russell 2000 small-cap index lagged with a 0.6% decline. Investors were digesting Federal Reserve Chair Kevin Warsh's speech at the Fed's annual Jackson Hole symposium.
Warsh keeps the inflation fight open
Warsh told the gathering the Fed may not be finished battling inflation and that financial conditions don't look too restrictive, meaning money and credit remain relatively easy to obtain. He pointed to a core PCE reading above 3% alongside generally strong economic data as reasons the central bank isn't ready to declare victory.
The 10-year Treasury yield climbed to 4.69% before easing back to 4.67%, unchanged from Thursday. Crude oil, meanwhile, dipped less than 1% to near $83 a barrel.
Rate-hike odds narrow, and PayPal slides
Markets now price a one-in-three chance of a Sept. 16 hike, down from about 60% just after the Fed's July 28-29 meeting. Still, there's a 53% chance of a late-October increase. At that July meeting, three policymakers voted for an increase.
Elsewhere, PayPal tumbled roughly 12% after private equity firm Advent and payments firm Stripe reportedly dropped their pursuit of the company, Bloomberg reported. The $50 billion deal had been in the works before the pullback. Microsoft moved the other way, breaking out with a 2% gain and clearing a 513.73 entry point. The stock has been a top performer since soaring more than 15% on July 30 on strong earnings.
Source: Investor's Business Daily
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