U.S. stocks closed little changed on Aug. 18 as investors stayed on pause before a conference of world financial leaders and earnings from major retailers, like Walmart and Home Depot, later this week.
Federal Reserve Chair Jerome Powell is set to give a speech at the end of the week at the annual Jackson Hole Economic Symposium of global central bankers and finance chiefs. Investors will be looking for hints Powell may be done waiting to see tariff effects before cutting rates again.
Last week, after a tame July consumer inflation report, investors piled on bets that the Fed would lower rates in September, giving stocks a boost. Lower interest rates drop borrowing costs, which should boost the economy.
The CME FedWatch tool that tracks the odds markets give for a rate move at each Fed policy meeting showed expectations for a Fed easing at the next policy meeting jumped to more than 90%. Since then, chances have dropped back to just over an 83% chance.
“To the extent Powell does talk about the policy outlook…we see him noting the softer July jobs report as tilting some of the employment-inflation risk balance,” wrote Michael Feroli, chief U.S. economist at J.P. Morgan. “However, with several Fed speakers recently stating that the case for a cut has not been made, and with more employment data to come, we don’t think Powell can firmly guide toward easing at the next meeting.”
Before Powell’s speech, investors will get a glimpse midweek of the dissents at the last Fed meeting. Fed governors Christopher Waller and Michelle Bowman voted against the central bank’s decision to keep rates unchanged between 4.25%-4.50% last month. It was the first time since 1993 that two governors dissented.
The blue-chip Dow closed down 0.08%, or 34.30 points, to 44,911.82; the broad S&P 500 dipped 0.01% or 0.65 points, to 6,449.15; and the tech-heavy Nasdaq edged up 0.03%, or 6.797 points, to 21,629.774. The benchmark 10-year Treasury yield rose to 4.339%.
Discount giants Walmart and Target, and home improvement chains Home Depot and Lowe’s are among the key retailers slated to report earnings this week. How the retail chains are faring can provide a window into tariffs effects and the health of consumers.
Of the more than 92% of S&P 500 companies that have already reported this quarter, almost 82% have surpassed Wall Street’s expectations, according to FactSet.
Retail sales data last week showed consumer spending remained resilient in July, but another report showed consumers were feeling bleaker about inflation and the economy.
Michael Saylor, executive chairman of Microstrategy, said in a social media post the company added to its Bitcoin holdings. The company bought 430 Bitcoin for about $51.4 million and now holds a total of 629,376 Bitcoin.
Separately, Metaplanet, the Tokyo-listed company, said it acquired 775 Bitcoin for approximately $93 million at an average price of $120,006 each, bringing its total holdings to 18,888 Bitcoin acquired for about $1.94 billion.
Bitcoin was last down 0.96% at $116,375.10.
This story was updated with new information.
Medora Lee is a money, markets and personal finance reporter at USA TODAY. You can reach her at mjlee@usatoday.com and subscribe to our free Daily Money newsletter for personal finance tips and business news every Monday through Friday morning.