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U.S. stocks gained on Friday, August 28, 2026, after Federal Reserve Chair Kevin Warsh warned that inflation required further attention. His Jackson Hole speech strengthened expectations for a September interest rate hike without committing the central bank to action.
Investors initially delivered a mixed response before the major indexes advanced later in the morning. Short-term Treasury yields also increased, while several chipmakers surrendered part of the previous session’s gains.
Warsh acknowledged that summer inflation figures had beaten expectations but said they had not established a convincing improvement. Annual inflation stood at 3.7% in the latest personal consumption expenditures report, above the Fed’s 2% target.
“We must be confident that underlying inflation is moving to our objective, clearly and at sufficient speed,” he said. “Otherwise, we have work to do.”
He described the labor market as stable and economic output as strong. Nevertheless, he avoided setting a timetable for further action or outlining specific conditions for changing interest rates.
“I stand here today committed to a discipline, not to a decision,” Warsh said.
Traders priced in a September hike probability above 55% later in the session, compared with 35.4% on Thursday. The odds had initially reached 46% following the speech.
At 10:07 a.m. Eastern time, the S&P 500 slipped 0.07% to 7,725.81. The Nasdaq Composite declined 0.22% to 26,483.33, while the Dow Jones Industrial Average added 0.07% to 53,606.27.
By late morning, the S&P 500 had gained 0.4%, while the Nasdaq advanced 0.5%. The Dow added roughly 168 points, or 0.3%.
The Dow and S&P 500 were on course for weekly gains of about 1%. Meanwhile, the Nasdaq approached a weekly advance of almost 2%. A positive finish would give the Dow its first weekly gain in three weeks.
The S&P 500 entered Friday within 1% of its August 13 record, with a yearly gain of approximately 13%.
Trading volumes during the week also trailed their 2026 average. On Thursday, the Cboe Volatility Index hovered near its lowest level of the year.
In bond trading, the two-year U.S. Treasury yield reached 4.29%, its highest level in a month. The 10-year yield held near 4.672%, while the 30-year yield eased to 5.16%.
The dollar index strengthened 0.4% to 99.55. Meanwhile, Brent crude futures traded below $88 a barrel.
Nvidia declined 1.3% in early trading after helping lead Thursday’s technology rally. The company’s earnings outlook had supported buying across stocks linked to artificial intelligence.
Salesforce recorded its strongest daily gain since 2020 on Thursday, contributing to the broader advance in technology stocks.
Furthermore, Marvell Technology fell 7.2%, despite increasing its 2027 revenue forecast. Investors questioned the timing of revenue from its AI chip agreement with Google. Its profit margin forecast also disappointed Wall Street.
Meanwhile, PayPal dropped 11.5% following reports that Advent and Stripe had abandoned their joint pursuit of the payments company.
Gap advanced about 15% after increasing its annual profit forecast and appointing Michael Francis as Old Navy’s chief executive. The clothing retailer also delivered a mixed quarterly earnings report.
Investors turned their attention to the August employment report, scheduled for Friday, September 4. Economists expected 45,000 additional jobs and an unemployment rate of 4.2%, following July’s loss of 23,000 jobs.
Manufacturing and services surveys were also due the following week. The previous manufacturing report showed activity at its strongest level in more than four years.
Broadcom’s Wednesday earnings report was another scheduled event for technology investors. Nvidia had forecast 70% revenue growth for its next fiscal year. Dell Technologies and Palo Alto Networks also had results due.
Most S&P 500 companies had already reported second-quarter earnings. Estimates dated August 21 put annual growth in adjusted corporate profits at 33.5%, as the reporting season approached its end.
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