Global Market Awaits Powell's Jackson Hole Speech This Week, Traders Focus on Rate Cut Signals

Global markets are eagerly anticipating Fed Chair Jerome Powell's speech at the Jackson Hole Economic Symposium this week. Traders are closely watching for any signals regarding interest rate cuts, which could lead to significant market movements on Friday.

Analysts suggest that whether last week's rebound continues will hinge on whether Powell provides clear guidance on a potential rate cut in September. Some strategists advise caution, noting that a significant rebound before Powell's speech could make the market more vulnerable. Powell may not offer explicit guidance on rate cuts; instead, the key to market sentiment may lie in his tone rather than his words. The options market is pricing in an expected volatility of more than 1% for the S&P 500 on Friday.

Historically, the tech sector tends to benefit from lower interest rates. Rate cuts make borrowing cheaper, which can boost investment in innovation and growth for tech companies. Additionally, lower rates can drive more investors towards high-growth tech stocks as they seek better returns in a low-yield environment.