Market Snapshot: S&P 500 and Nasdaq end higher, attempting to beat back worst month since December

What drove markets

Stocks advanced, picking up from where they left off on Friday after Powell indicated the jury is out on further tightening of monetary policy. Stock investors chose to focus on the more dovish aspects of Powell’s Jackson Hole speech —looking past his additional comments that inflation remains too high and policy makers are ready to further hike rates if necessary.

Jackson Hole recap: Fed rate hikes likely on hold for ‘several meetings’

Powell’s speech at the Fed’s annual summit in Jackson Hole, Wyo., provided the stock market a ”very short-term” green light to press higher, Kent Engelke, chief economic strategist and managing director at Capitol Securities Management, told MarketWatch in a phone interview.

The central bank will be paying close attention to the data set to be released this week. Its preferred inflation measure, the July personal-consumption expenditures price index, is due on Thursday, followed by August nonfarm payrolls data on Friday. If figures aren’t far out of line with estimates, markets may remain calm in what’s likely to be a lightly traded week.

See: Fed’s Powell left investors with a cloud of uncertainty, and the U.S. stock market faces a difficult week ahead

Powell kept the possibility of further rate hikes “firmly on the table during his Jackson Hole speech, as inflation still remains above its 2% target, and the central bank is committed to that target,” Rod von Lipsey, managing director at UBS Private Wealth Management, said in emailed comments.

“This week’s core PCE figures and the next [consumer-price index] report in mid-September will be of extra importance in gauging how the Fed may act at its late September meeting,” he said. “Based on the Fed’s continued commitment to curtailing inflation, we believe that the market has been overly optimistic about the end point of restrictive policy rates.”

August is winding down with the S&P 500 and Nasdaq Composite down so far this month by almost 3.4% and 4.5%, respectively, as of Monday — on track for their worst monthly performances since December, when they ended down by 5.9% and 8.7%.

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Elsewhere, Treasury yields BX:TMUBMUSD10Y eased, with the rate on the 10-year note ending the New York session down by 2.9 basis points at 4.210%.

In China, stocks climbed after the Finance Ministry and the country’s stock-market regulator rolled out measures to spark buying interest in stocks, such as halving a tax on stock trades and limiting sales by big shareholders in companies that haven’t handed out enough dividends.

China’s CSI 300 index XX:000300 finished with a gain of more than 1%, though well off session highs. Shares of indebted property developer China Evergrande Group 3333, -78.79% tumbled almost 79% in Hong Kong in their return to trading after more than a year.

Companies in focus

• Shares of Dow component 3M Co. MMM, +5.22% ended 5.2% higher after The Wall Street Journal reported that the multinational conglomerate was nearing agreement on a roughly $5.5 billion plan to settle more than 300,000 lawsuits over defective military earplugs.
• Shares of Rite Aid Corp. RAD, +8.23% closed up by 8.2% following the worst one-day performance ever for shares on Friday. The selloff followed a report in The Wall Street Journal that the drugstore chain was preparing a chapter 11 bankruptcy filing to address mass federal and state lawsuits that resulted from its alleged role in the sale of opioids.
• Shares of Hawaiian Electric Industries Inc. HE, +44.62% finished up by 44.6% after the electric company responded to a lawsuit filed by Maui County over the deadly Lahaina fires, by calling the suit “factually and legally irresponsible.”
• American depositary receipts for Abcam PLC ABCM, -4.32% closed down by 4.3% after it said it agreed to be acquired by Danaher Corp. DHR, +2.34% for $24 a share in cash in a deal that values the maker of antibodies and reagents for drug-discovery efforts at about $5.7 billion including debt. The price amounts to a premium of 64 cents a share, or 2.7% over its closing price of $23.36 on Friday. Danaher shares ended up by 2.3%.

Barbara Kollmeyer contributed.