U.S. stock futures declined on Wednesday following Tuesday’s mixed trading. Futures of major benchmark indices were lower.

The S&P 500 and Nasdaq 100’s retreat came as peace talks between President Donald Trump, Ukrainian President Volodymyr Zelenskyy, and European leaders failed to deliver a breakthrough.

After Home Depot Inc. HD, investors await Target Corp.‘s TGT earnings today and Walmart Inc.‘s WMT on Thursday.

Investors are also focused on the Federal Reserve Chair Jerome Powell's speech later this week at the Jackson Hole Economic Policy Symposium for clearer signals on interest rates.

The 10-year Treasury bond yielded 4.31% and the two-year bond was at 3.76%. The CME Group's FedWatch tool‘s projections show markets pricing an 82.9% likelihood of the Federal Reserve cutting the current interest rates for the Sept. 17 decision.

The SPDR S&P 500 ETF Trust SPY and Invesco QQQ Trust ETF QQQ, which track the S&P 500 index and Nasdaq 100 index, respectively, fell in premarket on Wednesday. The SPY was down 0.13% at $638.95, while the QQQ declined 0.16% to $568.36, according to Benzinga Pro data.

Real estate, utilities, and consumer staples stocks recorded the biggest gains on Tuesday, with most S&P 500 sectors closing on a positive note. Information technology and communication services stocks, however, bucked the overall market trend and closed lower, contributing to a session where

U.S. stocks settled mostly down. The Nasdaq Composite fell more than 300 points as a lack of fresh bullish catalysts prompted investors to take profits following the recent months-long rally.

Intel Corp. INTC rallied 7%, extending its monthly gains to 27%, after Japan's SoftBank Group announced a $2 billion investment in the chipmaker. Palo Alto Networks Inc. PANW jumped over 3% after posting a double beat on its latest quarterly results.

On the economic data front, U.S. housing starts climbed by 5.2% from the previous month to an annualized rate of 1.428 million in July. Building permits saw a decline of 2.8% to an annualized rate of 1.354 million in July.

The Dow Jones index ended 10 points or 0.023% higher at 44,922.27, whereas the S&P 500 index fell 0.59% to 6,411.37. Nasdaq Composite declined 1.46% to 21,314.95, and the small-cap gauge, Russell 2000, tumbled 0.78% to end at 2,276.61.

Economist Jeremy Siegel highlights Fed Chair Powell’s upcoming speech as the key market mover, outweighing a recent slew of mixed economic data.

WisdomTree Senior Economist Jeremy Siegel states that the market’s direction for the coming months could be shaped by Federal Reserve Chair Powell’s address this Friday at the Jackson Hole Economic Symposium.

Siegel notes that while recent economic data has been varied, the underlying trends suggest that price pressures are not accelerating in the areas most watched by the Fed.

Despite a “sharp jump” in the Producer Price Index (PPI) driven by portfolio management fees, he points out that some economists have actually lowered their estimates for PCE inflation. This suggests that core inflation, when adjusted for statistical anomalies, is aligning with the Federal Reserve’s path toward potential policy easing.

On other economic fronts, Siegel observes:

According to Siegel, Chair Powell’s speech on Friday will be the “fulcrum on which the next leg of this market pivots”. He outlines two primary scenarios:

Market positioning has become increasingly reactive to expectations for the Fed’s next move. Siegel points out that small-cap and value stocks, which are more dependent on short-term financing, have shown a tight correlation with interest rate expectations.

“As anticipation for a rate cut builds, small caps rally,” Siegel states. In contrast, large tech firms with significant cash reserves or long-term debt are less sensitive to near-term rate changes.

See Also: How to Trade Futures

Here's what investors will be keeping an eye on Wednesday;

Crude oil futures were trading higher in the early New York session by 1.44% to hover around $62.66per barrel.

Gold Spot US Dollar rose 0.27% to hover around $3,324.53 per ounce. Its last record high stood at $3,500.33 per ounce. The U.S. Dollar Index spot was 0.08% higher at the 98.3470 level.

Asian markets ended higher on Wednesday, except South Korea's Kospi and Japan's Nikkei 225 indices. India’s S&P BSE Sensex, Hong Kong's Hang Seng, China’s CSI 300, and Australia's ASX 200 indices rose. European markets were lower in early trade.

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