Jackson Hole Symposium Approaches! History Suggests: US Stocks Likely to Rise After the Event

From August 21 to 23 local time, the annual global central banking symposium will be held in Jackson Hole, Wyoming, USA, and Federal Reserve Chair Jerome Powell's speech on Friday is expected to be the highlight.

Wall Street is already holding its breath for this event. However, according to historical analysis by DataTrek Research, US stocks have often performed well after the August Jackson Hole meetings over the years, although market volatility during the symposium may have increased in recent years.

DataTrek examined the performance of the benchmark S&P 500 index over the five trading days before and after (ten days in total) the Fed Chair's speech at each Jackson Hole symposium since 2010. Historical data shows that the S&P 500 has averaged a gain of 0.9% during these periods, with most of the increase occurring after the Fed Chair's speech.

Nicholas Colas, co-founder of DataTrek, stated in the research report: "This suggests that the market gains more clarity from the Fed Chair's remarks, which in turn boosts stock valuations."

A notable exception was 2022. At that year's Jackson Hole symposium, Powell warned that US economic growth would slow as the Fed battled high inflation. This caused the S&P 500 to fall 7.4% during those ten days.

Due to the Fed's rapid interest rate hikes that year, the S&P 500 fell more than 19% throughout 2022. However, during the following year's (2023) central banking symposium, the index rose 3.3% in the ten trading days surrounding Powell's speech.

This year, investors are eager to find out whether Powell will use his speech at the symposium to reinforce expectations of a rate cut at the Fed's September 16-17 meeting. Recently released US labor market data was extremely weak, fueling high expectations for a September rate cut.