US Open: Wall Street struggles for direction after Jerome Powell's speech

• Jerome Powell spoke at the Jackson Hole Symposium
• Data from the University of Michigan
• Higher recommendations for Netflix (NFLX.US), better results for GAP (GPS.US)

The first part of today's session on Wall Street was marked by variable sentiments driven by the speech of Fed Chair Jerome Powell at the Jackson Hole Symposium in Wyoming. Initially, major US indices opened with a slight uptick. The gains continued after the start of Fed Chair's speech at 16:05. However, during the speech, a hawkish tone emerged. Indices reacted with sudden drops, and the dollar strengthened. Currently, we observe a continuation of subdued sentiments, albeit in a calmer tone than after the speech. US100 is trading 0.20% below, and US500 is trading around opening levels.

Meanwhile, data from the University of Michigan regarding consumer sentiment and expected inflation was also released. The data didn't bring significant surprises. Inflation expectations increased slightly, with a year-ahead expectation of 3.5% and a 5-year expectation of 3.05%. Consumer sentiment fared somewhat worse, falling short of expectations at 69.5 compared to an expected 71.2. Further deterioration in consumer sentiment could imply a continued decline in retail sales, which had been performing exceptionally well thus far.

US100 is quite volatile today. The index exhibited strong gains two days ago, re-entering an upward trendline. The following day, significant declines indicated that negative sentiment still dominated. Today, US100 cannot decisively determine its direction. However, the fact of the rebound from the upward trendline could signify a sideways trend or a deepening of lows in the coming days. In such a case, the next support level would be around 14600 points. On the other hand, resistance for bulls might emerge around 15200 points.

Company News

• GAP (GPS.US) - the company's shares are up by 2.80% today despite not-so-optimistic results from the previous day. The company reported a decline in sales across all its brands, cautioning about weakening consumer demand. GAP is the latest in a line of companies highlighting weakening consumer sentiment in their quarterly reports. In the second fiscal quarter, the company witnessed an 8% sales drop to $3.55 billion, with a net income of $117 million, in contrast to the previous year's loss. The rise in the company's stock is attributed to better-than-expected EPS of 34 cents (adjusted), although revenues were slightly below the anticipated $3.57 billion. The company's management expresses concerns about a "weak apparel environment" and a "volatile consumer market." The sales decline is attributed to financial pressure on consumers, high inflation, interest rates, and the impending resumption of student loan repayments.
• Netflix (NFLX.US) gained 0.7% today after Loop Capital Markets upgraded its recommendation for the company from "neutral" to "accumulate," citing improving Netflix fundamentals.
• DigitalOcean (DOCN.US) is down by 6% after the cloud data processing company announced that Yancey Spruill will step down as CEO upon the appointment of a successor. Yancey Spruill had been the CEO for over 4 years.