Overnight – Stocks drift lower as investors grow wary of Fed message at Jackson Hole

Stocks broke their eight-day winning streak, pressured by a fall energy stocks and cautious trading ahead of this week’s Jackson Hole Symposium that will likely offer clues on monetary policy. 

Energy stocks fell after oil prices gave up gains despite fresh uncertainty on a ceasefire deal in Gaza after Hamas said the current agreement was amended from the one on July. 2 that deemed was acceptable. The group also refuted U.S. Secretary of State Antony Blinken’s comments that it had backed away from the deal.  The remarks from Hamas arrived on the heels of Blinken announcing that Israeli Prime Minister Benjamin Netanyahu had accepted a “bridging proposal” presented by Washington to tackle disagreements blocking a ceasefire deal in Gaza.

The Jackson Hole Symposium – a meeting of major central bank leaders and finance ministers – begins later this week, with an address from Federal Reserve Chair Jerome Powell on Friday.  Powell’s address will be closely watched amid growing conviction that the central bank is preparing to cut interest rates by 25 basis points in September, as recent economic readings showed some cooling in inflation. Powell could potentially flag the possibility of a 50 bps cut, Evercore analysts said, although they do not expect the Fed chairman to explicitly mention just by how much the Fed plans to begin trimming rates. “While there are good arguments on both sides for starting with 25bp cuts versus going with 50bps  the recent rebound in risk sentiment would, all else equal, argue against more aggressive action,” Deutsche Bank said in a recent note.

DNC in focus as 2024 presidential race heats up with the Democratic National Convention, with President Joe Biden set to speak at the event later on Monday. Vice President Kamala Harris was officially nominated as the party’s presidential candidate earlier in August, and picked Minnesota governor Tim Walz as her running mate. Harris was endorsed by Biden in July, and was seen swiftly catching up with Republican frontrunner Donald Trump in recent polls, presenting a tight 2024 presidential race. 

Meanwhile, independent, Robert F. Kennedy Jr. is weighing up ditching his race for the White House and may instead be considering joining forced for the Republican presidential candidate, Donald Trump, Kennedy’s running mate Nicole Shanahan said in an interview. RFJ Jr. may also choose to stay in the race, however, and seek to win more than 5% of the popular vote to become a third-party alternative to the GOP and Democratic parties