U.S. stock futures drifted lower Friday as investors awaited Federal Reserve Chair Jerome Powell’s keynote at the Jackson Hole symposium, the central event of the week. Meanwhile, Nvidia faces production challenges for its key H20 chips, and Meta announced a major cloud computing deal with Google.
Powell Speech in Focus
Powell is set to speak later at Jackson Hole, with markets looking for guidance on the trajectory of interest rates for the remainder of the year. Earlier in August, expectations for a September rate cut surged following soft payrolls data, but these predictions have eased over the past week, creating potential volatility.
The recent pullback has been driven by hotter-than-expected producer price inflation and hawkish statements from Fed officials. Kansas City Fed President Jeffrey Schmid, a voting member, said the central bank is “not rushing to cut interest rates,” citing inflation above its 2% target and a strong labor market. Cleveland Fed President Beth Hammack, a non-voting member, also noted Thursday that persistent inflation may rule out a September cut.
Powell may also highlight the importance of the Fed’s independence amid criticism from former President Trump. Earlier this week, Trump called for Fed Governor Lisa Cook to resign over mortgage allegations raised by a political ally, intensifying pressure on the central bank.
U.S. Futures React
At 03:00 ET, S&P 500 futures were down 7 points, or 0.1%, Nasdaq 100 futures fell 60 points, or 0.3%, and Dow futures dropped 20 points, or 0.1%. Thursday saw all three major indices close lower, with the S&P 500 recording its fifth consecutive decline. The S&P is down 1.2% week-to-date, Nasdaq 2.4%, and the Dow 0.4%.
Investors also anticipate corporate results, with Intuit (NASDAQ:INTU) and Zoom (NASDAQ:ZM) in focus after reporting Thursday after market close.
Nvidia H20 Chip Production Paused
Reports indicate that Nvidia (NASDAQ:NVDA) has asked some suppliers to halt production of H20 general processing units intended for China. Reuters reported that Foxconn was instructed to stop work on the H20 AI chip, while The Information noted Amkor Technology in Arizona and Samsung Electronics in South Korea were also asked to pause production.
Last month, Nvidia met with the Cyberspace Administration of China, which requested information on the chips amid concerns about potential tracking technology. Nvidia resumed H20 sales in July after shipments were halted in April due to U.S. restrictions. The company said, “We constantly manage our supply chain to address market conditions,” declining further comment.
Meta Signs $10 Billion Google Deal
Meta Platforms (NASDAQ:META) has reached a $10 billion agreement with Google (NASDAQ:GOOGL), according to The Information, covering the use of Google Cloud servers, storage, and services over six years.
Meta is among Wall Street’s AI hyperscalers racing to develop superintelligent AI while addressing investor expectations for returns on substantial AI investments. The company raised the lower end of its annual capital expenditure forecast last month by $2 billion to $66–72 billion. Meta is also seeking partners to fund its AI infrastructure by selling $2 billion in data center assets, according to a filing earlier this month.
Oil Prices Climb Amid Supply Concerns
Crude prices ticked higher Friday, on track to end a two-week decline, as stalled Russia-Ukraine peace talks added supply risk. Brent futures rose 0.1% to $67.68 a barrel, and U.S. WTI futures gained 0.1% to $63.59 a barrel at 03:00 ET. Both contracts had increased over 1% in the previous session. Brent is up 3% this week, and WTI around 1.4%.
The conflict in Ukraine continues to disrupt supply, while a larger-than-expected drop in U.S. crude inventories last week reflected strong demand, providing support for oil prices.
This content is for informational purposes only and does not constitute financial, investment, or other professional advice. It should not be considered a recommendation to buy or sell any securities or financial instruments. All investments involve risk, including the potential loss of principal. Past performance is not indicative of future results. You should conduct your own research and consult with a qualified financial advisor before making any investment decisions.