Wall Street Close: Benchmarks snap five-day uptrend on taper timeline fears

• US stocks closed lower amid tapering concerns, geopolitical jitters.
• US data came in unimpressive and mixed but non-voting Fed members back monetary policy adjustments.
• Peloton, Dollar Tree’s and SelectQuote dropped, Salesforce marked mild gains.
• All eyes on Fed Chair Powell’s Jackson Hole appearance.

US equity bulls step back after a five-day ruling as the Fed policymakers, actually non-voting members, tease early tapering concerns ahead of Chairman Jerome Powell’s showdown at the Jackson Hole Symposium.

Dow Jones Industrial Average (DJI) drops 0.54% or 192 points to 5,213 whereas S&P 500 lost 0.58% weight or 26 points to close around 4,470. Above all, Nasdaq marked 0.64% daily loss to 14,945.

Topping all is Dallas Fed President Robert Kaplan who said, “Fed's asset purchases had their purpose and their time but not longer well-suited to the situation.” James Bullard and Ester George were the rest of the non-voting Fed members who followed Kaplan and firmed up concerns over tapering.

Geopolitical challenges from Afghanistan and China played their part to roil the mood and contribute to the negative daily closing. Blast at Kabul airport and reports of two or three US officials being hurt raised worries of the US response to Taliban. Elsewhere, the likely meeting between the US and Chinese equity officials joins Beijing’s dislike for American pressure and meddling into the internal matters to highlight the geopolitical fears.

Talking about the data, the second version of the US Q2 Gross Domestic Product (GDP) got upward revision to 6.6% QoQ versus 6.5% prior, missing the expected 6.7% whereas Core PCE figures in the same quarter were confirmed the prior market consensus of 6.1%. Further, weekly jobless claims also inched up but held lower ground.

Elsewhere, the US 10-year Treasury yields remained indecisive around 1.34% but the US Dollar Index (DXY) rose the most in a week after four days of a downside, exerting downside pressure on the commodities and Antipodeans.

Stock-specific news marks Dollar’s Tree as the worst performer on S&P 500 with a 12% fall on downbeat earnings forecast but Selectquote gained more attention elsewhere by a slump of 45%. Dell couldn’t cheer upbeat results and Peloton fall on weaker company statistics.

Given the market’s attention on the Jackson Hole, Powell needs to reject tapering concerns to safeguard the equity bulls.

Read: Fed Chair Powell’s Jackson Hole Speech: Caution will win out