Wall Street Indices Slip Amid Anticipation for Federal Reserve's September Rate Cut

Wall Street's major indices fell amid volatile trading ahead of key discussions at the Jackson Hole symposium and the Federal Reserve's meeting minutes which could suggest a September interest rate cut. Energy and chip stocks saw significant declines. Traders are keenly awaiting signals from Fed Chair Jerome Powell.

In a tumultuous trading session on Tuesday, Wall Street's main indexes took a hit ahead of the Jackson Hole symposium and the Federal Reserve's meeting minutes. Investors are eagerly anticipating potential hints regarding a September interest rate cut.

Energy stocks bore the brunt of the declines, dropping 2.4%, while chip stocks also faced pressure with a 1.1% dip in the Philadelphia Semiconductor index. Market players are keen to hear from Fed Chair Jerome Powell at the annual Jackson Hole symposium on Friday for any indications of a rate cut.

Win Thin, managing director and global head of markets strategy at Brown Brothers Harriman, mentioned in a note that Powell is expected to hint at a rate cut next month while emphasizing the Fed's data-driven approach. Fed officials Raphael Bostic and Michael Barr are scheduled to speak later today, with meeting minutes expected on Wednesday.

The probability of the Fed reducing interest rates by 25 basis points in September currently stands at 73.5%, according to the CME FedWatch Tool. This comes after the S&P 500 and Nasdaq extended their winning streak to eight sessions on Monday. The market is closely watching for the anticipated rate cut amidst economic optimism.

Additional market movements included Eli Lilly's 2.8% rise following positive results from its weight-loss drug study, and an 8.5% gain for Palo Alto Networks after a favorable forecast. Conversely, Boeing and Lowe's experienced declines due to operational setbacks and revised forecasts, respectively.

The S&P 500 and Nasdaq saw more declining issues than advancing ones, with notable highs and lows recorded across the board.

(With inputs from agencies.)