* Dollar gains before key Powell speech in Wyoming

* S&P 500 slides for fifth day, Walmart drives Wall Street lower

* Gold inches lower on a stronger US dollar but still stuck in a range

* Fed’s Cook says she won’t bullied into stepping down

FX: USD saw a bid as buying picked up ahead of the major risk event of the week. Fed Chair Powell speaks at Jackson Hole at 10am Eastern Time. Has the Fed thinking on rates shifted enough to worry more about the weaker labour market than elevated inflation? Chances of a September Fed rate cut eased back modestly through the day from above 90% a week ago to currently 75%. Otherwise, we’ve had relatively hawkish Fedspeak mostly this week from officials still more concerned about the price stability side of their mandate. Of course, any acknowledgment of a move in rates next month would hurt the greenback. Last week’s low is 97.63 and then support at 97.10. The 200-day SMA sit at 99.02 with strong resistance around 99.57/63.

EUR tested 1.16 to the downside but held above it. A solid PMI report from France helped the single currency and was followed by a mostly positive German release. The EZ-wide print saw the composite move further into expansionary territory. ECB’s President Lagarde speaks on Saturday at Jackson Hole. There is now less than 10bps of ECB rate cuts priced in by year end.

GBP sold off for a fifth straight day and touched the 200-day SMA at 1.3411. Preliminary PMIs were mixed as the manufacturing index unexpectedly fell deeper into contractionary sub-50 territory, while services unexpectedly climbed toward the mid-50s.

JPY lost ground as prices in the major rose above 148. The preliminary PMIs were mixed, with a marginal improvement in the contractionary manufacturing print and a slight easing in the barely expansionary services metric. Headline national inflation is expected to ease to 3.0% in July. Utility bills have been falling though food costs are forecast to rise.

AUD was the relative outperformer though still saw losses versus the greenback. Prices are below the 200-day SMA at 0.6456. CAD weakened as the major ticked up above 1.39 to three-month highs.

US stocks: The S&P 500 printed down 0.4% at 6,370. That’s the fifth straight day of losses. The Nasdaq settled off by 0.46% at 23,143. The Dow Jones finished lower at 44,786 losing 0.34%. Sectors were predominantly lower with underperformance in Consumer Staples the standout, and Consumer Discretionary after retailer earnings in which Walmart missed on EPS tumbled post-earnings. Only two sectors, energy and materials were in the green.

Asian stocks: Futures are mixed. Regional markets endeavoured to shake off tech weakness Stateside. The ASX 200 outperformed amid earnings releases and broke through the 9,000 level for the first time. The Nikkei 225 saw selling in pharma and autos drag the index lower. The Hang Seng and Shanghai Composite were mixed with the former hit by tech selling in Xiaomi despite a jump in profits.

Gold printed a narrow-ranged candle as investors awaited Chair Powell. Prices have traded between the 50-day and 100-day SMA in recent days at $3,348 and $3,306 respectively.

Day Ahead – Jackson Hole Fed symposium

It seems like we’ve been waiting a while for this annual gathering of the great and the good in the central banking world, plus academics and policymakers. It has historically been a place where major policy shifts have been announced. This year, Fed Chair Powell will have to balance up a dual mandate which points to a softening labour market with downside risks, along with elevated inflation and upside tariff-induced risks, which has been above target for some time.

But the balancing act is not reflected in money markets with traders seeing a high chance of a 25bps September rate cut. There are currently around 51bps of easing priced into this year in total. Of course, a sharp U-turn by Powell and the majority of rate setters to cut next month might make the Fed appear rather politicised given the heat from the White House. With one more non-farm payrolls report and CPI release before the FOMC meeting in four weeks’ time, consensus instead believes that Powell is likely to stress flexibility and a neutral stance. Indeed, many policymakers have struck a cautious tone recently and acknowledged the need to stay data dependent.

Chart of the Day –Nasdaq slides after strong rally

Equities have retreated this week and are on track for the worst week since the liberation day plunge. The sell-off has been nearly entirely tech-driven, absent a clear trigger with a sharp defensive rotation and pronounced value outperformance, with small caps even outperforming large caps. This mini correction in tech comes not only after a strong run recently, but essentially since that post-liberation day bottom in April. Over recent weeks, leadership has narrowed further into a handful of mega-cap tech names, many of which had reached fresh absolute and relative highs.

Recently, we had stories around MIT researchers believing companies were seeing little zero value from AI to Sam Altman warning that investors had got overexcited. But profit taking is probably the simple answer to this week’s sell-off as investors take profitable bets off after such a stellar rally in highly, overvalued names. The first Fib retracement level (23.6%) of the April rebound comes in at 22,216, which is the swing high from mid-February. The record high sits just below 24,000. Simply, a strident Powell could hurt stocks some more, a more dovish bias should reassert bullish momentum.