Wall Street Drifts Higher with Focus on Jackson Hole Meet

WALL STREET - NEW YORK. Wall Street's main stock indexes extended their gains in choppy trading on Monday after clocking their best week of the year, while investors looked ahead to Federal Reserve Chair Jerome Powell's speech at Jackson Hole for rate-cut indications.

The benchmark S&P 500 clinched a seven-day winning streak on Friday, its longest since October 2023, after a batch of strong economic data eased investor concerns about a recession in the world's largest economy.

That was a sharp turnaround from an equities selloff earlier in the month after a higher-than-expected increase in the U.S. unemployment rate for July fanned worries about the health of the economy.

Goldman Sachs lowered the odds of the United States slipping into a recession in the next 12 months to 20% from 25% following the latest weekly jobless claims and retail sales reports.

At 09:46 a.m. the Dow Jones Industrial Average rose 95.80 points, or 0.24%, to 40,755.61, the S&P 500 gained 8.98 points, or 0.16%, to 5,563.23 and the Nasdaq Composite gained 14.39 points, or 0.08%, to 17,646.11.

Ten of the 11 S&P 500 sectors advanced, with communication services .SPLRCL being the biggest gainer, helped by Alphabet's 1.6% rise.

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Minutes from the Fed's last policy meeting are due on Wednesday, and Powell will speak at the economic symposium in Jackson Hole on Friday, with investors keeping an eye out for any signs of acknowledgment of a rate cut in September.

"They're expecting Powell to perhaps signal suddenly the Fed's upcoming actions. I'm not sure that will actually happen but the entire market will be focused on the proceedings of the Jackson Hole meeting," said Peter Andersen, founder of Andersen Capital Management.

Minneapolis Fed President Neel Kashkari said the debate about potentially cutting interest rates in September is an appropriate one to have because of a rising possibility of a weakening labor market, according to a report.

Traders currently see a 75.5% chance of the Fed cutting interest rates by 25 basis points (bps) in September, compared with an even split between a 50 and 25 bps cut seen a week ago, according to the CME FedWatch Tool.

All eyes are on corporate earnings as cybersecurity company Palo Alto Networks, retailer Target and home improvement chain Lowe's are expected to report their results this week.

Advanced Micro Devices rose 2.3% after the chipmaker said it plans to acquire server maker ZT Systems for $4.9 billion, to expand its portfolio of artificial intelligence chips and hardware and compete better with Nvidia.

Estee Lauder fell 1.9% after the cosmetics maker forecast annual profit below expectations.

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B. Riley Financial slid 12.4% following a drop of over 65% last week. Co-founder and co-CEO Bryant Riley had offered to buy the bank on Friday, after it warned of a hit from its investment in Vitamin Shoppe-owner Franchise Group.

Advancing issues outnumbered decliners by a 2.57-to-1 ratio on the NYSE and by a 1.78-to-1 ratio on the Nasdaq.

The S&P 500 posted 17 new 52-week highs and no new lows while the Nasdaq Composite recorded 46 new highs and 29 new lows.