Tech Stocks Tumble Ahead of Fed Chair Powell’s Key Speech

NEW YORK, New York — Stock futures dipped Tuesday as earnings from major retailers surfaced, and traders prepared for a significant address by Federal Reserve Chair Jerome Powell later this week.

Futures linked to the Dow Jones Industrial Average dropped 27 points, a decline of 0.1%. Similarly, the S&P 500 and Nasdaq were down 0.1% each. Home Depot shares fell more than 1% after the home improvement giant posted second-quarter earnings that missed expectations, though it maintained its full-year outlook.

Investors are keenly watching these reports for insights into consumer behavior amidst a complex inflation landscape and changing U.S. trade policies. Wall Street is also eager to hear Powell’s thoughts on future policy meetings. This week, central bank officials from around the world will gather in Jackson Hole, Wyoming, for the annual Federal Reserve conference.

“We expect the Federal Reserve to use Jackson Hole as an opportunity to prepare the markets and signal towards a 25 basis point cut in September and a potentially accommodating stance through year-end,” said Richard Saperstein, chief investment officer at Treasury Partners. “This will likely be Powell’s last Jackson Hole conference as Fed Chair, reinforcing the need for Fed independence from the Executive Branch.”

The fed funds futures market indicates an 83% likelihood of a quarter-point rate cut at the Fed’s next meeting in September, following a quiet trading session on Monday where the major indices remained just below recent record highs.

Home Depot’s shares fell nearly 2% in pre-market trading, reporting adjusted earnings of $4.68 per share on revenue of $45.28 billion. Analysts had expected a profit of $4.71 per share and revenue of $45.36 billion.

Meanwhile, European shares faced challenges, particularly as defense stocks fell after U.S. President Donald Trump engaged in peace talks regarding Ukraine. The Stoxx Europe Aerospace and Defense index dropped 2.2%. Key players like a German tank parts manufacturer saw a 7% decline.

In other news, Japanese conglomerate SoftBank announced a $2 billion investment into Intel, paying $23 per share. This announcement followed Intel’s shares closing Monday at $23.66, which increased by more than 5% during after-hours trading.

Notably, Meta shares have experienced a substantial rise in short interest, increasing by 75% this year, amounting to $11 billion. Recent reports indicate an increase in the percentage of Meta shares sold short, reflecting concerns over various market pressures, including trade risks and slowing growth.

As companies like Palo Alto report strong quarterly results and announce significant acquisitions, the market remains volatile, influenced by both earnings reports and macroeconomic factors.