InstaForex

August 26, 2021

Stock market ahead of Jackson Hole policy symposium

 Yesterday, US stock indices set new records. The Dow Jones Industrial Average gained 0.11%, closing at 35,405.5. The Standard & Poor's 500 added 0.22% and reached 4,496.19. The Nasdaq Composite index increase by 0.15% to 15,041. Nothing prevents US stocks from growing at the moment. Owing to the Fed's support of the economy, the supply of money increases every month. Some of these funds flow into the stock market. Demand is rising along with the shares of many companies, as well as stock indices. Meanwhile, an important event is scheduled for this Friday, which is likely to affect both stock and forex markets. Traders and investors are now focused solely on the Federal Reserve's annual Jackson Hole policy symposium. Ahead of the event, it becomes clear that Chair Jerome Powell will unlikely make any important comments. The thing is that the number of new coronavirus cases in the United States surged in recent weeks due to the rapid spread of the Delta variant. Therefore, many investors and experts now fear that the US economic recovery may slow down amid the alarming coronavirus situation in the country. Meanwhile, some experts suggest that the peak of the new wave has already passed. If so, the situation will improve and the economy will breathe a sigh of relief.


In any case, only macroeconomic results may reveal whether the state of the economy improved or not. It remains unknown how the new surge in the infection rate has affected the US economy until then. This means that the Fed's chair will unlikely announce the beginning of tapering. It will be possible to draw any conclusion only after the release of new data on inflation, non-farm payrolls, retail sales, and business activity. Therefore, Friday could be a calm day in the market as Jerome Powell will unlikely say anything important. Anyway, market participants should be ready for any outcome. Powell's speech is scheduled for the second half of the day. Thus, traders will have time to either prepare for it or exit the market to avoid any possible risks.