Stock Market Volatility Intensifies Ahead of Powell’s Jackson Hole Speech

Equity markets extended losses Thursday as disappointing earnings and labor data fueled uncertainty. The Dow Jones Industrial Average dropped over 200 points, dragged down by Walmart's 4% plunge after an earnings miss. Simultaneously, hotter-than-expected jobless claims cast doubt on labor market resilience.

All focus now shifts to Federal Reserve Chair Jerome Powell's Friday address at Jackson Hole. Last year's dovish remarks sparked a 1% single-day S&P 500 rally, but options markets now price in 0.8% swings—nearly double the typical daily move. This volatility premium reflects DEEP uncertainty about monetary policy direction.

July FOMC minutes revealed growing divisions among policymakers, with some advocating rate stability while others pushed for more aggressive inflation containment. The schism between Governors Waller and Bowman exemplifies the Fed's delicate balancing act between price stability and employment objectives.