US open: Stocks fall on the back of 'hawkish' Powell speech
Stocks slumped, the dollar was down and Treasuries were steady after a speech from the head of the US Federal Reserve that top-ranked economist Ian Shepherdson said left "nothing for the doves" - although there was perhaps "one glimmer of hope".
Against that backdrop, as at 1616 BST the Dow Jones Industrials was off by 1.52% to 32,785.14, the S&P 500 by 1.91% to 4,118.53 and the Nasdaq Composite by 2.44% to 12,330.35.
Euro/dollar was 0.67% higher to 1.0042, having earlier risen to 1.0090.
The yield on the benchmark 10-year US Treasury note meanwhile was up by just one two basis points to 3.046%.
In his speech at Jackson Hole, Jerome Powell said efforts to bring inflation down could entail "some pain" for the economy, but that not doing so would bringer pain.
However, Powell did note the role of supply constraints in the inflation shoch that had unfolded, Ian Shepherdson pointed out, explaining its role in massively pushing up company margins and prices, but which would likely reverse, possibly allowing inflation to come down more quickly than expected over the coming months.
"The Fed can’t ease until inflation is clearly headed back to target, and wage growth has slowed markedly," said Shepherdson, Pantheon Macroeconomics´s chief economist.
"The Chair’s message today is that the Fed thinks these conditions are unlikely to be met as soon as markets expect. We think he is probably right."
The data on economic activity, price and consumer confidence released in the background was upbeat, despite nominal income and spending growth undershooting forecasts.
Falling prices meant that the latter was more solid than it might appear at first glance.
All told, Shepherdson said his forecast for third quarter gross domestic product growth in the US was already running at 5%.