Warsh Speech Sends US Stocks Lower on Hawkish Rate Outlook

A hawkish speech from Federal Reserve Chair Kevin Warsh sent US stock markets lower on Friday. The Dow Jones Industrial Average, S&P 500, and Nasdaq Composite all declined after Warsh's address in Jackson Hole, Wyoming.

Warsh emphasized the need for price stability and stated that inflation is running too high. He warned that if prices don't fall 'clearly and at sufficient speed', the Fed will take uncomfortable action, which could include raising interest rates again.

The odds of a September rate hike firmed up from 40% to roughly a coin toss after Warsh's speech. The two-year Treasury yield jumped about 0.1 point, its biggest one-day move since June.

Nvidia (NVDA) fell 4%, giving back half of Thursday's 8.4% earnings jump. Semiconductors fell broadly, with the iShares Semiconductor ETF (SOXX) down 3.3%. Gold and Bitcoin prices both fell by 2.9% on Friday.

However, exactly half of the 30 Dow stocks rose, leaving the blue-chip index roughly flat on the day. Apple stock rose 1.9% after the company announced significant price increases for its Apple TV and Apple One services.