Positive Start to the Week
The Dow Jones Industrial Average increased by 230 points or 0.7%, the S&P 500 rose by 0.6%, and the NASDAQ Composite went up by 0.9% at 9:33 ET (13:33 GMT). This surge was partly due to investors digesting Powell's comments from his speech at the Jackson Hole economic symposium. Powell advocated for maintaining the current interest rates but mentioned that "further tightening" might be necessary if the economy does not decelerate enough to control inflation.
Gauging the Path of Inflation
Powell's statements underscored the caution exercised by the Federal Reserve in adjusting monetary policy to manage price increases without destabilizing the broader economy. Investing.com's Fed Rate Monitor Tool indicated an 80% chance that the Fed would keep borrowing costs between 5.25% and 5.50% in its September meeting. However, the likelihood of a quarter-point increase in November rose from about 35% last week to just under 50%. The Fed will assess inflation trends using the personal consumption expenditure index, scheduled for release on Thursday.
Upcoming Economic Data
Other significant economic data to be released this week includes the nonfarm payrolls report for August, scheduled for Friday. Economists predict that the U.S. added 170,000 jobs in August, a decrease from 187,000 in July, with the unemployment rate remaining at 3.5%. Such figures could suggest that the Fed's rate hikes are impacting employer demand, even though the labor market is still robust.
3M Nearing a Billion-Dollar Settlement
In company news, 3M (NYSE: MMM) shares rose by 6.3% as the company approached a $5.5 billion settlement to address claims that its earplugs, sold to the U.S. military, were faulty. Although negotiations are ongoing and the final amount is yet to be confirmed, this potential settlement was initially reported by Bloomberg.
Mixed Oil Prices
Crude oil prices varied in the early trading session. Crude Oil WTI futures increased by 0.2% to $79.98 a barrel, while Brent Oil Futures dropped by 0.1% to $83.88 a barrel. Meanwhile, Gold Futures saw a slight increase of 0.1% to $1,941.