US stocks rise as Kevin Warsh vows to bring inflation under control

US stock markets rose on Friday as Federal Reserve Chair Kevin Warsh’s pledged to bring inflation under control.

In his first speech at the Jackson Hole, Warsh warned price pressures aren’t meaningfully slowing while pledging to achieve the Fed’s target. His comments bolstered bets on a Fed rate hike this year.

“Here is my standard: We must be confident that underlying inflation is moving to our objective, clearly and at sufficient speed. Otherwise, we have work to do. That’s our job,” Warsh said in his prepared remarks.

Warsh added that financial conditions are not currently restrictive and interest rates are the Fed’s “predominant tool” for achieving its mandate.

As of 11:30 a.m. Eastern Time, the S&P 500 added 0.4%, the Dow Jones Industrial Average was up 0.4%, and the Nasdaq Composite was 0.5% higher.

At the open, the Dow Jones Industrial Average rose 42.5 points, or 0.08%, to 53,611.94. The S&P 500 rose 4.2 points, or 0.05%, to 7,735.17, while the Nasdaq Composite dropped 25.4 points, or 0.10%, to 26,515.989.

The Jackson Hole gathering has been an important event for global financial markets since 1982, bringing together policymakers, economists and other prominent figures to discuss major economic issues.

The event "has traditionally been the venue at which the Chair prepares financial markets with some forward guidance for the path of monetary policy in the period ahead," said Angus Campbell of Nominis.

Following the Warsh’s speech, the bond markets were mixed. The yield on the 2-year Treasury jumped to 4.30% from 4.22%. The 10-year Treasury yield held at 4.67%, where it was late Thursday, while the 30-year Treasury yield fell to 5.16% from 5.19% on Thursday.

Key Stock Movers

Markets were also digesting a mixed batch of corporate earnings, with individual stocks witnessing sharp moves.

Gap shares surged nearly 20% after the retailer reported quarterly profit that exceeded Wall Street expectations.

Marvell Technology shares, meanwhile, fell 7.9% despite the chipmaker reporting quarterly revenue and profit that slightly surpassed analysts’ expectations.

Nvidia stock slipped 1.3%.

PayPal shares fell 11.5% after Bloomberg News reported that a consortium of buyout firm Advent and payment processor Stripe had decided to abandon their pursuit of the payments firm.

Ulta Beauty shares fell 6.1% after the cosmetics retailer's comparable sales growth dropped in the second quarter.

Bullion

Gold prices fell on Friday, as traders increased bets on an interest rate hike after Warsh's remarks on curbing inflationary pressure.

By 1452 GMT, spot gold was down 0.8% at $4,563.05 per ounce. US gold futures for December delivery fell 1% to $4,615.10.

Spot silver rose 0.3% to $69.48 per ounce, platinum was up 1.7% at $1,878.46 and palladium gained 7% to $1,444.75 an ounce.