A second report, meanwhile, suggested US business activity remains deeply split. Growth for services businesses is accelerating, according to preliminary data from S&P Global Market Intelligence. But the country’s manufacturing sector appears to be contracting at a more severe rate.

Overall, the data suggested the US economy is still growing but pointed to some fragility.

“Growth has become increasingly dependent on the service sector as manufacturing, which often leads the economic cycle, has fallen into decline,” said Chris Williamson, chief business economist at S&P Global Market Intelligence.

The Fed has pulled its main interest rate to the highest level in more than two decades in hopes of restraining the economy enough to stifle inflation but not so much that it causes a recession. With inflation slowing, the wide expectation is for the Federal Reserve to cut interest rates at its next meeting in September, which would be the first easing since the COVID crash of 2020.

That’s why so much attention is on Jackson Hole, Wyoming, where Powell will speak Friday at an economic symposium that’s been home to big Fed policy announcements in the past. The hope is Powell will give clues about how quickly and deeply the Fed may cut rates to ease conditions for the economy.

One danger is if expectations for coming cuts have gone overboard among investors, something that has frequently happened historically. That could make the drop in Treasury yields since the spring overdone. The drop has helped pull mortgage rates lower, which in turn helped sales of previously occupied homes stop a four-month slide in July.

In the meantime, US companies continue to report mostly better-than-expected profits for the springtime.

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Internet-connected exercise company Peloton soared 35.4 per cent after it topped sales forecasts and lost less money in the latest quarter than analysts were expecting. It achieved modest revenue growth for the first time in more than two years.

Another winner of the pandemic that saw its fortunes weaken afterward, Zoom Video Communications, also rose following its profit report. It climbed 13 per cent after delivering better results and revenue for the latest quarter than expected.

But more stocks fell on Wall Street than rose, including Nvidia, which was the heaviest single weight on the S&P 500. It erased an early gain to fall 3.7 per cent ahead of its own highly anticipated profit report coming next week.

It was briefly the strongest force pushing upward on the S&P 500 earlier in the day, but its stock has been swinging sharply over the last month amid worries that its price shot too high amid a frenzy around artificial intelligence. Even with Thursday’s loss, Nvidia’s stock is still up 150 per cent for the year so far.

with AP

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