US stock markets exhibited a subdued performance on Tuesday, August 19, 2025, as investors adopted a cautious stance ahead of Federal Reserve Chair Jerome Powell's anticipated speech at the Jackson Hole symposium on Friday. Market sentiment was influenced by elevated valuations and mixed signals from US housing data.
Projections indicated the Dow Jones Industrial Average would open approximately 0.2% higher, near 44,989 points, while the Nasdaq 100 was expected to open 0.1% lower, trading around 23,691 points. Both indices were hovering near recent record highs. Market participants are largely pricing in a September 2025 interest rate cut by the Federal Reserve, with expectations of another cut by year-end, driven by concerns over labor market weakness overshadowing inflation risks.
Analyst Ipek Ozkardeskaya of Swissquote Bank suggested that equities might need a new catalyst, as historically weaker seasonal months combined with rising long-term bond yields could encourage profit-taking. In corporate news, Home Depot's shares declined 0.6% pre-market after its quarterly results fell short of expectations, attributed to reduced spending on renovation projects impacting household budgets due to tariffs and inflation. Conversely, Intel's shares climbed 5.4% pre-market following a $2 billion investment from SoftBank. Palo Alto Networks also saw pre-market strength, rising 6.7% on better-than-expected earnings, while Medtronic's shares dropped 3.2% after its interim report and slightly raised profit forecast failed to impress investors.
The Jackson Hole Economic Policy Symposium, scheduled for August 21-23, 2025, will focus on "Labor Markets in Transition: Demographics, Productivity, and Macroeconomic Policy." This theme highlights challenges facing global central banks, with analysts noting the impact of demographic shifts and technological disruption on workforce dynamics and inflation. Investors will closely monitor Powell's remarks for insights into the Fed's future monetary policy, particularly concerning interest rates, inflation readings above the Fed's 2% target, and concerns about a weakening labor market.
Economic indicators revealed that while US housing starts climbed unexpectedly in July 2025, building permits saw a pullback, presenting a mixed picture of the real estate sector. On the international front, diplomatic efforts to resolve the conflict in Ukraine are ongoing, with recent high-level meetings involving US President Donald Trump, Ukrainian President Volodymyr Zelenskyy, and European leaders aimed at brokering peace. Reports indicate that Russia has continued its military actions amidst these diplomatic maneuvers.