US Stocks Pare Gains After Warsh Speech

The US stock indices closed lower on Friday as chipmakers shares trimmed the previous session’s gains and a more hawkish tone from Fed Chair Warsh strengthened expectations for a rate hike next month. The S&P 500 shed 0.2%, the Nasdaq fell 0.7% and the Dow inched lower. Marvell fell 10.3% despite beating earnings estimates and raising its outlook. Chipmakers pulled back after rallying on Nvidia’s (-4.6%) strong results earlier in the week, with Broadcom down 0.7%, and AMD falling 2.3%. Hyperscalers held gains, with Alphabet up 1.5%, Microsoft adding 1.7%, Amazon jumping 4%, and Meta rising 1.2%. Meanwhile, Warsh said underlying inflation was not slowing and pledged to keep fighting price growth until it converges with the Fed’s 2% target during his speech at Jackson Hole Symposium, prompting traders to increase bets on a rate hike next month. Industrial and pharmaceutical stocks declined, with AbbVie losing 1% and Lam Research falling 5.2%.

US stocks turned lower on Friday as tech shares trimmed yesterday's rally and Fed Chair Warsh's warning of high inflation strengthened bets for a rate hike. Marvell sank nearly 8%, giving back some of its rally on the month despite beating earnings estimates and raising its outlook. Chip producers and companies in AI infrastructure loosely maintained weekly gains after Nvidia noted that compute demand continues to surge through the next quarters. Meanwhile, Fed Chairman Warsh stated that underlying inflation is not slowing and vowed to fight price growth until it converges to the 2% target in his speech at the Jackson Hole Economic Symposium. The Chairman also signaled that the labor market is consistent with full employment, driving traders to consider a rate hike by the central bank next month. Industrial stocks and pharmaceuticals pulled back, with Merck and GE Vernova down over 1.5% each.

The Dow Jones Index is picking up 45 points or 0.08 percent on Friday. Gains are led by Nike (1.09%), McDonalds (1.03%) and Amazon (0.89%). Biggest losers are Merck (-1.34%), Cisco Systems (-1.13%) and Alphabet (-0.53%).