US Stocks Rise Before Warsh Speech Amid Tech Profit Taking

Stocks opened higher Friday morning ahead of a speech by Federal Reserve Chairman Kevin Warsh and as investors in tech companies take profits after Nvidia Corp. fueled a rally in the sector a day earlier.

The S&P 500 Index rose 0.2%, with the consumer discretionary and communication services sectors leading the advance. The tech-heavy Nasdaq 100 was unchanged, while the Dow Jones Industrial Average rose 0.1%. The Cboe Volatility Index continued to slide, trading just over 14. Oil prices slipped as Venezuela considers an exit from OPEC.

Warsh is due to speak at the Jackson Hole symposium at 10 a.m. New York time. Wall Street will closely watch the speech after hotter core personal consumption expenditures data this week raised concerns about persistent inflation.

“The core PCE print that we got this week sends a very clear message that inflation is actually firmer than what we expected,” Subadra Rajappa, head of research at Societe General Americas, said in a Bloomberg TV interview on Friday. “If you look at the data in aggregate for this year, you have to be thinking about some sort of policy action as soon as possible.”

Historically, a Fed chair’s Jackson Hole speech hasn’t been a big catalyst in stocks — with the index moving an average 0.4% the week following the conference since 2000 — unless it happens before a larger shift in monetary policy.

Torsten Slok, chief economist at Apollo Management, does not expect forward guidance from Warsh on Friday but expects a move in long-term yields, writing in a note that “anything he says about framework and the economy, in particular where he sees inflation, unemployment and the neutral rate, could move the long end anyway.”

Among notable single-stock moves, PayPal Holdings Inc. was the worst-performing stock in the index after buyout firm Advent and payment processor Stripe abandoned their pursuit of the fintech company, sending shares tumbling.

A handful of tech names fell Friday ahead of the bell, including Marvell Technology Inc., after posting in-line results. Sevens Report founder Tom Essaye said the moves can be explained by the “tech sector seeing some profit taking” after a big Thursday rally driven by Nvidia.

As earnings season draws to a close, S&P 500 firms have managed to grow their earnings by nearly 32% year-over-year, according to Bloomberg Intelligence data.

BofA Securities Inc strategist Michael Hartnett said that investors are positioning for rising earnings per share, capped bond yields and strong growth as bonds, stocks and cash funds drew the biggest allocations from weekly inflows, while crypto and gold saw outflows.

Sectors in Focus

Meat processing firms may move as US President Donald Trump plans to authorize farmers and ranchers to process their own food, aiming to break what he calls a “powerful monopoly” held by major processors.Watch Bitcoin-linked stocks Friday as Iren Ltd. shares dropped after the miner and data center operator saw lower prices for the cryptocurrency, which weighed on resultsCosmetic stocks may be in play after Ulta Beauty shares slipped as discounts and promotions weighed on margins.