(Bloomberg) -- U.S. stocks fell after Federal Reserve officials cast doubt on further interest-rate cuts and as traders assessed mixed economic data. Treasuries fluctuated.
An early advance in the S&P 500 Index began to lose strength after a report showing a contraction in U.S. factory activity offset solid labor-market data. Equities erased gains after Philadelphia Federal Reserve President Patrick Harker told CNBC that he’s “on hold” right now for further monetary easing. His comments were in line with those of Kansas City counterpart Esther George, who said the U.S. doesn’t need lower rates.
Euro-area government bonds slumped after the European Central Bank expressed concern that investors were losing faith in the institution’s ability to revive inflation and as a measure of German manufacturers reinforced recession concern. The British pound jumped as comments by French and German leaders stoked optimism about a Brexit deal.
Read: Trump Sees Germany’s Negative-Bond Sale as Positive, Bashes Fed
Financial markets have been volatile amid concern over global economic weakness and renewed U.S.-China trade tension. Minutes from the Fed’s July meeting showed Wednesday that officials viewed their cut last month as insurance against too-weak inflation and the risk of a deeper slump in business investment. Analysts expect Powell to suggest the central bank is ready to reduce rates further when he delivers his speech in Jackson Hole Friday.
“It’s just been news driven primarily based on trade wars and the Fed,” said Ed Clissold, chief U.S. strategist at Venice, Florida-based Ned Davis Research Inc. “Fundamentally there’s not a lot going on. Earnings growth has been pretty anemic, economic growth has not been strong. In the vacuum of good fundamentals, the market’s just been held to the whims of the news flow.”
Here are some notable events coming up:
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