US stocks flat at open as Fed Chair Warsh warns on inflation outlook

US stocks opened largely flat on Friday, August 28, as investors assessed Federal Reserve Chair Kevin Warsh’s comments at the central bank’s annual Jackson Hole symposium, where he flagged concerns over persistent inflation and offered little reassurance that underlying price pressures had eased.

The S&P 500 was around the flatline shortly after the opening bell, while the Nasdaq Composite slipped 0.1%. The Dow Jones Industrial Average rose about 0.2%, or roughly 90 points, in early trading.

Warsh’s remarks remained the key focus for markets. Speaking in Jackson Hole, Wyoming, he said recent readings on personal consumption expenditures (PCE) and consumer prices (CPI) had been better than expected but did not indicate a meaningful improvement in underlying inflation trends.

“We must be confident that underlying inflation is moving to our objective, clearly and at sufficient speed. Otherwise, we have work to do,” Warsh said, underscoring the Fed’s focus on bringing inflation back to its target.

The comments come as investors assess the outlook for US interest rates following a technology-led rally in the previous session, driven in part by upbeat corporate earnings and renewed optimism around artificial intelligence stocks.

Also Read: Fed Chair Warsh says US jobs market remains strong, flags inflation concerns at Jackson Hole

US stock futures steady as investors await Fed’s Jackson Hole speech

US stock futures were little changed in premarket trading on Friday, August 28, as investors await Federal Reserve Chair Kevin Warsh’s speech at the central bank’s annual Jackson Hole symposium for clues on the outlook for interest rates.

S&P 500 futures were trading just below the flatline, while Dow Jones Industrial Average futures edged higher. Nasdaq 100 futures slipped around 0.3%, following a strong technology-led rally in the previous session that was fuelled by upbeat earnings and renewed optimism around artificial intelligence.

Among individual stocks, Gap shares jumped about 14% in premarket trading after the retailer reported mixed quarterly results and announced a new chief executive for its struggling Old Navy brand. Marvell Technology shares fell roughly 8% after its current-quarter outlook for non-GAAP gross margin disappointed investors.

Fed rate outlook in focus

Investors are looking to Warsh’s address for greater clarity on the Federal Reserve’s interest-rate path after his comments at the previous policy meeting left markets seeking more direction. The speech, scheduled for 10 a.m. ET, comes as Fed officials remain divided over the timing of future rate moves, while inflation continues to run above the central bank’s 2% target.

Fed funds futures are currently pricing in about a 64% probability that the central bank will keep interest rates unchanged at its next meeting, according to CME Group’s FedWatch tool.

Wall Street is also digesting the impact of a strong earnings season.

Nvidia’s upbeat long-term outlook has helped revive confidence in the artificial intelligence trade, lifting technology stocks in Thursday’s session. Salesforce also rallied sharply after its latest results eased concerns around a potential slowdown in software spending.

Following Thursday’s gains, the three major US indexes are on track to finish the week higher. A weekly gain for the Dow would mark its first positive week in three.