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S&P 500 edges lower as hawkish Jackson Hole talk lifts September hike odds

After Kevin Warsh’s hawkish remarks in Jackson Hole, the chance of a September federal funds rate hike rose to 60%, while LSEG data showed corporate profits up 53% in Q2.

Reported · Written up by our desk · Major Pairs

US stock indices reacted cautiously to Kevin Warsh’s hawkish rhetoric from Jackson Hole, a shift that reinforces historical patterns around central bank meetings, according to Action Forex. Since 1999, the S&P 500 has moved at least 3% in either direction four times during Jackson Hole periods, with an average gain of 0.4%.

The outlet said the index’s fundamentals still look supported, citing an Atlanta Fed forecast for US GDP growth of 4.6% in the third quarter. Apollo Global Management estimates that about 0.2 percentage points of that growth is linked to the rollback of tariffs.

Even so, Action Forex pointed to rising rate expectations after Warsh’s comments, with the probability of a federal funds rate hike in September jumping to 60%. Futures markets also price in two rounds of monetary tightening in 2026 at a 50/50 probability.

Action Forex also flagged other headwinds as investors look ahead to US labor data for August, with the escalation in the Middle East pushing oil prices higher and contributing to increased Treasury yields and higher borrowing costs for S&P 500 issuers. The piece added that fears about the effectiveness of artificial intelligence investments have not gone away, and it noted that NVIDIA shares gave back more than half of their prior session gains.

Latest closeS&P 500 7,711.76 ▼0.2%

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