NEW YORK — Stocks are ticking higher in early Friday trading on Wall Street, ahead of a highly anticipated speech by the head of the U.S. Federal Reserve.
The S&P 500 was up 0.3% after the first few minutes of trading. The Dow Jones Industrial Average was 109 points higher, or 0.3%, at 35,320, as of 9:50 a.m. Eastern time, while the Nasdaq composite was up 0.3%.
Stocks remain close to their record highs, after the S&P 500 and Nasdaq clinched their latest on Wednesday, thanks in large part to the Federal Reserve’s massive efforts to prop up the economy and financial markets.
But the beginning of the end of the Fed’s assistance may be in sight now that the unemployment rate has dropped and inflation has picked up. That’s why so much attention is on Fed Chair Jerome Powell, who is scheduled to give a speech at 10 a.m. Eastern as part of an annual economic policy symposium.
The Fed’s event in Jackson Hole, Wyoming, has been the setting for market-moving speeches in the past, and investors are waiting to hear if Powell will say when the central bank may begin slowing the $120 billion in bond purchases it’s making each month. That bond buying is meant to keep longer-term interest rates low, and it has helped send prices soaring for houses, stocks and other investments.
The worsening pandemic is complicating things for the Fed, though. The faster-spreading delta variant has raised worries among shoppers, pushed vaccinated people to wear masks indoors once again and slowed some economic activity.
A report on Friday showed that consumer spending in the country rose 0.3% in July from June, a sharp slowdown from the prior month’s 1.1% jump, for example. That’s a big deal when consumer spending is the driving force of the U.S. economy, and its growth slowed even though income growth for Americans accelerated to 1.1% last month.
The report also showed that a gauge of year-over-year inflation preferred by the Fed held steady at a high 3.6% in July, slightly higher than economists’ expectations.
The delta variant has even affected the Fed directly. Friday’s symposium was supposed to be held in person, before the Fed abruptly said last week that it would be an online-only event.
Given all the uncertainty, some investors have pulled back expectations for Powell to give a clear signal about when the Fed may begin slowing its bond purchases, which would be the first step toward eventually raising short-term interest rates off their record low.
Treasury yields were holding relatively steady ahead of Powell’s speech. The yield on the 10-year note was at 1.34%, roughly where it was late Thursday.
“If the speech turns out to be a non-event, the follow-up market risk event will be the jobs report next week, which will provide more concrete data in steering the timeline of tapering ahead,” Yeap Jun Rong at IG said.
Economists expect next week’s jobs report to show employers added 763,000 workers in August, down from 943,000 in July. The jobs report is usually the most anticipated economic data of each month.
Ahead of Powell’s speech, energy producers were making some of the market’s strongest gains. Occidental Petroleum jumped 4.7%, and Marathon Oil rose 3.5%, for example. They climbed with oil prices, as benchmark U.S. crude gained 2.1%.
Retailer Gap rose 2.8% after it reported stronger sales and profit for the latest quarter than Wall Street expected. It benefited from strength in its Old Navy and other brands.
On the losing end was HP, which fell 3.6%. It reported stronger profit for the latest quarter than analysts expected, but its revenue fell short of forecasts.
Shares of Peloton Interactive tumbled 8.8% after the company reported a loss for its latest quarter, cut the price of its most popular product and disclosed that it’s been subpoenaed by the Justice Department and the Department of Homeland Security for documents related to its reporting of injuries associated with its exercise equipment.
Stock markets overseas were mixed. In Europe, Germany’s DAX and London’s FTSE 100 were 0.1% higher, while France’s CAC 40 slipped 0.1%.
Moves were also modest in Asia. Japan’s Nikkei 225 fell 0.4%, South Korea’s Kospi gained 0.2% and Hong Kong’s Hang Seng was virtually unchanged.
——
AP Writer Annabelle Liang contributed
