U.S. stocks closed lower on Thursday, as investors preferred to reduce their positions ahead of a highly anticipated speech by Federal Reserve Chair Jerome Powell at the Jackson Hole seminar tomorrow, amid concerns of a shift towards tightening monetary policy.
Sentiment was also affected by Walmart's results, which raised its annual sales and profit forecasts supported by consumer spending, but failed to meet quarterly profit estimates, warning of rising costs due to tariffs.
Markets are awaiting Powell's speech scheduled for 10 a.m. New York time, as investors seek clearer signals regarding the possibility of interest rate cuts in September, especially after recent data reflecting weakness in the labor market.
Sam Stovall, Chief Investment Strategist at CFRA Research, said: "The probability remains at around 80% for a rate cut next month, but these expectations have become less certain now, which is why investors prefer to take profits temporarily."
According to data from the London Stock Exchange, market bets on a 25 basis point rate cut in September have shrunk to 79%, compared to 99.9% last week.
At the close:
The Dow Jones Industrial Average declined by 152.81 points (-0.34%) to 44,785.50 points.
The S&P 500 index fell by 25.61 points (-0.40%) to 6,370.17 points.
The Nasdaq Composite lost 72.54 points (-0.34%) to close at 21,100.31 points.
Most sectors within the S&P 500 were in the red, led by the consumer staples sector, which fell 1.18% following Walmart's results.
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