Dow Jones Futures Fall: Market Expects This From Fed Chief Powell; 5

Dow Jones futures fell slightly overnight, along with S&P 500 futures and Nasdaq futures, with Fed chief Jerome Powell set to give his much-anticipated Jackson Hole policy speech Friday morning.

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The stock market rally had a strong session Thursday, with the major indexes rising back above a key short-term level, despite concerns that Fed chief Powell will signal the need for tight monetary policy for the long term.

Axcelis Technologies (ACLS), GlobalFoundries (GFS), Steel Dynamics (STLD), Insulet (PODD) and RPM International (RPM) were among several stocks breaking out or flashing buy signals.

Earnings

Ulta Beauty (ULTA) was actionable Thursday, but it had earnings after the close. ULTA stock rose modestly on strong results and guidance. Shares closed up 1.75% on Thursday to 419.25, clearing buy points at 417.08 and 418.89.

Workday (WDAY) and Affirm Holdings (AFRM) also reported. WDAY stock leapt 10% overnight, but was still below its 200-day line. AFRM stock tumbled more than 10% on big losses and weak guidance.

Axcelis and STLD stock joined IBD Leaderboard on Thursday. GFS stock and Steel Dynamics are new swingers on SwingTrader. ACLS stock is on the IBD 50. Steel Dynamics stock is Thursday’s IBD Stock Of The Day.

The video embedded in the article discussed Thursday’s market rally and what to expect from Fed chief Powell. It also analyzed Axcelis, Steel Dynamics and PODD stock.

Fed Chair Powell’s Speech: The Two Words That Could Upset The S&P 500

Fed Chief Powell’s Speech Seen Hawkish

Fed chief Powell, scheduled to speak at 10 a.m. ET Friday at the Jackson Hole symposium, likely won’t provide much insight into the size of the September Fed rate hike. Instead, he’s expected to stress long-term inflationary pressures. That would include chronic labor shortages but also perhaps, sustained higher energy and commodity prices, rising trade barriers and tight housing supply.

All of that would suggest that the Federal Reserve will need to push interest rates significantly higher — and keep them there for the foreseeable future. Fed chief Powell may even imply that a recession or a long stretch of subpar growth will be necessary to lift unemployment to curb wage-inflation pressures.

That could mean sluggish demand, a strong dollar and sustained higher Treasury yields. That could weigh on companies’ profitability and valuations, especially highly valued growth.

Just a few weeks ago, markets saw rate hikes quickly cooling after September and perhaps reversing lower sometime next year.

Dow Jones Futures Today

Dow Jones futures declined 0.15% vs. fair value. S&P 500 futures fell 0.15% and Nasdaq 100 futures dipped 0.2%.

Ahead of Powell’s speech and the opening bell, the Commerce Department will release its July income and spending report. That report includes the personal consumption expenditures index, the Fed’s favorite inflation gauge.

Remember that overnight action in Dow futures and elsewhere doesn’t necessarily translate into actual…