U.S. stock markets continued to decline on Thursday, pulling major indices deep into the red as investors prepared for Fed Chairman Jerome Powell's speech on Friday at the central bank's annual conference in Jackson Hole, Wyoming.

The S&P 500 fell 0.4%, closing at 6,370.17, marking the fifth consecutive day of decline. The Nasdaq Composite fell 0.34% to 21,100.31, and the Dow Jones fell 152.81 points, or 0.34%, closing at 44,785.50.

Powell's appearance on Friday could signal upcoming monetary policy, especially as inflationary pressures remain high. Traders on CME's FedWatch tool have priced in a 74% chance that the Fed will cut interest rates at the September meeting.

Investors are selling as tech companies lose momentum.

For the first time in two months, retail investors have shifted to the sell side. Data compiled by JPMorgan strategists shows individual investors sold about $140 million in tech stocks just in the past week. This marks a significant reversal after weeks of daily purchases averaging over $1 billion each day.

This retreat comes as mega-cap tech stocks like Nvidia, Microsoft, Meta, Alphabet, and Amazon have all declined throughout the week. Their losses were enough to drag the entire market down. The S&P 500 fell 0.8%, and the Nasdaq fell 2.1% during the same period. Palantir, one of retail investors' favorite targets, dropped over 13% for the week.

Tom Essaye, founder of The Sevens Report, writes that technology has sustained the market for many years, but valuations have become too high. "Investors have greatly benefited from the impressive performance of the tech sector, not just in 2025, but also in recent years," Tom said. He is unreserved about Palantir, calling it a perfect example of inflated expectations: "Palantir (PLTR), the best-performing stock in the S&P 500 YTD, is also trading at an expected earnings multiple of 212X."

Even after this retreat, retail investors have not completely given up on the market. They are steering clear of the overly hot tech names, but they are still in the game. They just aren't buying blindly anymore.

Trump increases pressure on Powell ahead of the Fed's speech.

As Powell prepares to speak, the pressure comes not only from Wall Street. President Donald Trump has continually criticized Powell and the Fed, strongly demanding interest rate cuts. That part is familiar. But now it has become personal.

Earlier this summer, the White House went after the Fed over its massive renovation project at its Washington, D.C. headquarters. Around that same time, Trump floated the idea of removing Powell altogether, but eventually backed off.

This week, the Trump administration turned its attention to Fed Governor Lisa Cook, accusing her of credit contract fraud related to two government-backed loans. That is a shift from complaints about monetary policy to personal accusations. All of it places Powell in a political storm ahead of the speech at Jackson Hole.

Despite the noise, Powell is expected to maintain a steady demeanor. That has been his style for over seven years. Michael Arone, chief investment strategist at State Street Global Advisors, says Powell focuses on the Fed's responsibilities:

"He has done very well in maintaining the Fed's independence, ignoring the noise and some of the questions he receives, and focusing on data dependence and the Fed's dual mandate."

Michael added that Powell "has pursued the noble path regarding the Fed's independence and some of the pressure he is clearly receiving from the Trump administration."

Even if Powell does not mention names in his speech on Friday, it is likely he will hint at the chaos. The past few months have put the Fed under close scrutiny, both from political attacks and from the market itself. The Fed Chairman may use this opportunity to subtly push back, without departing from his calm public persona.

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