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The US indices rose on Thursday, thanks to support from growth and semiconductor stocks, as investors watched the Federal Reserve's conference in Jackson Hole to gain insight into the future outlook for monetary policy. Fed Chairman Jerome Powell will give a speech today that will be analyzed for any indication that the economic slowdown may change the Central Bank's strategy. The US GDP data showed yesterday that the US economy contracted at a more moderate pace in the second quarter than originally thought, as consumer spending partially cushioned resistance to the sharp slowdown in inventory accumulation, dispelling fears that the recession was continuing. Nobel Prize-winning economist Richard Thaler said the US economy was showing more signs of strength than weakness.

The National Bureau of Economic Research, the official arbiter of recessions in the United States, defines a recession as a significant decline in economic activity that extends throughout the economy, lasting more than several months, usually manifested in production, employment, and real income.

As the stock market closed yesterday, the Dow Jones Index (US30) increased by 0.98%, and the S&P 500 Index (US500) added 1.41%. The Nasdaq Technology Index (US100) gained 1.67%.

Federal Reserve Bank of Kansas City President Esther George said yesterday that it is too early to predict how much the US Central Bank will raise interest rates next month because key inflation and labor market reports are still to come. Atlanta Fed President Raphael Bostic also said he has not yet decided whether the Fed should raise interest rates by 50 or 75 basis points at its policy meeting next month. Traders of Fed funds futures contracts estimate a 59% chance that the Fed will raise rates another 75 basis points at its September meeting and a 41% chance of a 50 bps hike.

Graphics chip maker Nvidia Corp forecasts a sharp drop in revenue for the current quarter amid a weakening gaming industry. Analysts believe Nvidia could see further declines in the crypto-mining and data center markets as well.

Equity markets in Europe traded yesterday without a single dynamic. German DAX (DE30) gained 0.39%, French CAC 40 (FR40) fell by 0.08%, Spanish IBEX 35 (ES35) lost 0.15%, British FTSE 100 (UK100) closed on Wednesday at plus 0.11%.

According to July's ECB monetary policy minutes, most central bank officials agreed to a more aggressive 50 bps rate hike at the next meeting in the context of the recent deterioration in inflation prospects as well as the deteriorating economic conditions in the Eurozone.

Germany's IFO business climate Index fell to 88.5 points in August from a revised 88.7 points in July. The IFO index is based on a survey of about 9,000 companies in manufacturing, services, trade, and construction. Business confidence in Germany worsened in August as companies became more pessimistic about rising energy prices and the threat of gas shortages.

The situation in the oil market remains uncertain. Oil prices fell yesterday as investors prepare for the possible return of sanctioned Iranian oil exports to global markets and over concerns that rising US interest rates will weaken fuel demand. On the other hand, the prospect that the OPEC+ group of producers may limit oil supplies limits the fall in oil prices.

Asian markets were mostly up yesterday. Japan's Nikkei 225 (JP225) gained 0.58%, Hong Kong's Hang Seng (HK50) jumped by 3.63%, and Australia's S&P/ASX 200 (AU200) added 0.70% yesterday.

• S&P 500 (F) (US500) 4,199.12 +58.35 (+1.41%)
• Dow Jones (US30) 33,291.78 +322.55 (+0.98%)
• DAX (DE40) 13,271.96 +51.90 (+0.39%)
• FTSE 100 (UK100) 7,479.74 +8.23 (+0.11%)
• USD Index 108.44 −0.24 (−0.22%)
   

Important events for today:

• New Zealand RBNZ Gov Orr Speaks at 01:30 (GMT+3);
• Japan Tokyo Core CPI (m/m) at 02:30 (GMT+3);
• US PCE Price index (m/m) at 15:30 (GMT+3);
• Jackson Hole Symposium at 16:00 (GMT+3);
• US Fed Chair Powell Speaks at 17:00 (GMT+3);
• US Michigan Consumer Sentiment (m/m) at 17:00 (GMT+3).

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