Warsh Speech Reignites Rate-Hike Fears, Stocks Rebound Anyway

U.S. stocks rebounded on Friday after Federal Reserve Chair Kevin Warsh's speech at Jackson Hole, despite rising short-term Treasury yields.

The S&P 500 and Nasdaq Composite gained about 0.4% by late morning, while the Dow Jones Industrial Average advanced.

Warsh said the Fed still has 'work to do' if inflation fails to move clearly and quickly toward its 2% target, which raised the probability of a September rate increase to roughly 50%, from about 35% before the speech.

The two-year Treasury yield climbed 9.5 basis points to 4.325%, its highest level in about a month, while the 10-year yield rose 2.8 basis points to 4.70%.

Nvidia fell about 1.3% after its previous-session rally, while Marvell Technology dropped roughly 7.2% as investors questioned the timing of revenue from its AI-chip agreement with Google.