Buyers Seek Science on September Rate Cut in Jackson Hole: How Do Stock Markets Perform During Fed Symposium? – SPDR S&P 500 (ARCA:SPY)

This week, all eyes are on you Jackson Hole Economic Symposium, held by the Federal Reserve from Thursday, Aug. 22, to Saturday, Aug. 24.

The event will be a key moment for financial markets, as investors eagerly await signals from the Fed Chair. Jerome Powell‘s speech is scheduled for Friday at 10 a.m. ET

Powell’s comments are expected to provide important insight into the Federal Reserve’s next moves, particularly the rate cut in September.

Market consensus points to the Federal Open Market Committee (FOMC) giving its first rate hike since March 2020 at the upcoming September 18 meeting.

This expectation was highlighted by Powell during the July FOMC meeting and is now fully bought by market participants.

However, the extent of the cut is still an open question. The latest stronger-than-expected data has turned the odds down 25 points instead of a 50-point swing.

In Fed futures, as tracked by CME Group’s FedWatch tool, there is a 77.5% chance of a 25 basis point cut, compared to a 22.5% chance of a larger cut of 50 basis points. In September, the market is also willing to cut 25 points in November and reduce 50 points in December.

Historically, the Jackson Hole Symposium has been a critical event for market participants, influencing the performance of the S&P 500 index.

Benzinga’s analysis of the past 10 events in Jackson Hole reveals that the performance of the S&P 500 during the days of the symposium (Thursday and Friday) was relatively flat, with an average decrease of 0.4%, and a return of in the middle of 0%.

Considering the entire week, the main stock market index, followed by SPDR S&P 500 ETF Trust WINshowing a modest gain of 0.4%, with the median performance slightly better at 0.8%.

In the past 10 events, the S&P 500 has posted positive returns six times over the two-day window and seven times over the week.

	S&P 500 Back in Time Dates of the Symposium (Sun.-Fri.)	S&P 500 Come back During All week
Aug. 24-26, 2023	-1.4%	0.8%
Aug. 25-27, 2022	-3.4%	-4.0%
Aug. 26-28, 2021	0.4%	1.6%
Aug. 27-28, 2020	0.6%	3.3%
Aug. 22-24, 2019	-2.9%	-1.4%
Aug. 23-25, 2018	0.7%	0.9%
Aug. 24-26, 2017	0.0%	0.8%
Aug. 25-27, 2016	-0.3%	-0.6%
Aug. 27-29, 2015	2.4%	0.8%
Aug. 21-23, 2014	0.0%	1.8%
Average	-0.4%	0.4%
Median	0.00%	0.8%
Max	2.4%	3.3%
Min	-3.4%	-4.0%

During the 2022 Jackson Hole Symposium, the S&P 500 fell 3.4% between Thursday and Friday after Powell stressed the Fed’s commitment to fight inflation with rate increases, even at the risk of economic pain.

Markets interpreted his sentiment as more hawkish than expected, leading to a 4% decline in the S&P 500 over the week as investors worried about the impact of long-term gains long-term economic growth and corporate earnings.

In 2019, Powell’s speech focused on managing the US economy amid global trade conflicts, particularly the US-China trade war. However, his words did not have a clear first direction on the Fed’s future actions, which led to market instability.

The S&P 500 fell 2.9% on the day of the symposium and is down 1.4% over the week, reflecting concerns about the uncertain direction of monetary policy at a time of rising global risks.

In August 2015, as the Fed debated the timing of its first interest rate hike since the 2008 financial crisis, symposium discussions focused on global economic conditions and their implications for monetary policy. of the US. Fed Vice Chairman Stanley Fischer suggested that the Fed may be close to raising rates, depending on economic data.

The S&P 500 responded positively, gaining 2.43% during the conference days and 0.8% over the week, as markets were encouraged by the Fed’s cautious approach to raising rates.

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