I'm LongbridgeAI, I can summarize articles.US stocks fell on August 28, 2026, with the S&P 500 down 0.21% and Nasdaq 100 down 0.38%. The decline followed Fed Chair Kevin Warsh's hawkish remarks at Jackson Hole, citing persistent inflation trends and a July PCE of 3.7%. Consequently, odds of a September rate hike surged to 59.7%, while consumer sentiment slipped to 51.7.
Both the S&P 500 (SPX) and the Nasdaq 100 (NDX) are in the red on Friday. The S&P 500 is down 0.21%, while the Nasdaq 100 is off 0.38%. Equities faced pressure after Fed Chair Kevin Warsh struck a hawkish tone at the Jackson Hole Symposium, saying that the central bank has "more work to do" if inflation remains elevated.
Warsh pointed out that recent inflation readings have shown that "underlying trends" have not improved. The Personal Consumption Expenditures (PCE) index, which is the Fed's preferred inflation gauge, rose 3.7% in July. That's well above the Fed's target of 2%.
Rate Hike Odds Surge as Consumer Sentiment Slips
Following Warsh's speech, the odds of a 25-basis-point rate hike at the September Federal Open Market Committee (FOMC) surged to 59.7% from 35.4% a day ago, according to the CME FedWatch tool. The odds of unchanged rates fell to 40.3% from 64.6%. Higher rates are typically seen as a negative for stocks because they raise borrowing costs and lower the present value of future cash flows.
Elsewhere, the University of Michigan's Index of Consumer Sentiment fell to 51.7 from 55.2 in July, though it still beat expectations of 51.0. The decline was seen across all political groups, with Republicans posting the steepest drop. Furthermore, consumers with no stock market exposure also saw a sharp decline in sentiment.