Warsh's Speech Set to Shape US Stocks Ahead of Rate Hike Fears

US stocks are edging lower on Friday as investors wait for Fed Chair Kevin Warsh's speech at Jackson Hole. The focus is on what he will say about the Federal Reserve's outlook for interest rates, particularly with inflation above target for 65 consecutive months. PCE inflation has remained higher than expected, which could lead to a hawkish message from Warsh.

The market currently prices a 35% chance of a September rate hike and 75% by December. A hawkish tone would likely push Treasury yields and the dollar higher, creating headwinds for equities. On the other hand, a more neutral stance would allow markets to focus on strong growth and earnings.

Oil prices are holding steady but remain around 5% lower this week due to diplomatic solution hopes in the Middle East. Shipping data shows some improvement, with commodity vessels transiting the Strait of Hormuz at higher rates than during the worst disruption.