Market snapshot: stocks in a holding pattern before Jackson Hole

Investors are generally reluctant to commit ahead of US Federal Reserve chair Jerome Powell's speech on Friday, says our head of markets.

Markets maintained their holding pattern, ahead of an important couple of days which should provide further short-term directional clues.

The usual Thursday jobless claims number will give some further indications of a relatively tight labour market, while the Federal Reserve’s preferred measure of inflation, the Personal Consumption Expenditures index, will reveal the current state of play tomorrow. Following the last reading, the release could give further substance as to whether there is any additional evidence of inflation nearing or indeed hitting a peak.

• Discover more: Buy international shares | Interactive investor Offers | Most-traded US stocks

However, the highlight of the week for investors is the Jackson Hole symposium and in particular the latest comments from Fed chair Jerome Powell when he speaks on Friday. Investors have been bracing for a reiteration of the Fed’s hawkish tone in continuing to raise rates to combat rampant inflation. Indeed, despite some emerging signs of slowing economic growth, caused in part by the rate hikes already undertaken, the Fed is expected to maintain its dogged determination to rein in inflation at all costs, with the next hike in September expected to be one of 0.75%.

In the meantime, the main indices finished the session marginally higher, but making little impact on the year to date performance, which has seen the Dow Jones index lose 9%, the S&P 500 13% and the Nasdaq 21%.

• Is this heroic US share a buy?
• Five ‘resilient’ stocks with recession appeal
• The most-popular dividend shares among global fund managers

Asian markets were mixed to positive as the broader themes of China’s property sector woes, global monetary tightening by central banks and ongoing supply disruption causing elevated energy prices all weighing on sentiment. Some slight weakness in the US dollar ahead of Jackson Hole gave some brief and light relief to local currencies, but investors were generally reluctant to commit ahead of what could prove to be an important end to the week.

Oil prices rose in volatile trading as the demand/supply debate rumbled on. Brent oil is now above $100 once more, marking a rise of 31% in the year to date, with the situations in Iran and Saudi Arabia dominating supply direction, while the possibility of lesser demand is also in the mix as the global economy shows signs of sluggish growth.

The FTSE 100 opened firmly, erasing losses from the previous session, and despite the headwind of seven stocks being marked ex-dividend. In the year to date, the UK’s premier index continues its relative outperformance and stands ahead by 1.8%. The pain of possible economic contraction is being felt elsewhere, however, with the more domestically focused FTSE 250 taking the brunt of concerns on the evolving plight of the UK economy, resulting in a drop of 17.5% this year.

In early exchanges, the oil majors gained some inevitable support after the oil price rise, while more broadly mining stocks made ground after some more recent pressure. The broad-based nature of the early gains is more suggestive of bargain hunting rather than a return to risk-on sentiment, with the end of the week announcements more likely to be the main drivers of near-term sentiment.