The S&P 500 index recovered on Friday as investors seized the opportunity presented by Wall Street's recent selloff. Equity traders will look for clues about the Fed's next move at this week's Jackson Hole symposium. According to the minutes of the most recent FOMC meeting, a majority of Fed members support reducing the $120 billion per month asset purchase program by the end of the year. Fed Chair Jerome Powell's Friday speech may bolster this possibility, even as recent economic data showed a slowing recovery. In this context, the DXY US Dollar index broke above a 12-month-old "Wedge" pattern. This shows that the market has priced in the possibility of tapering stimulus and possibly rate hikes in the medium term. A stronger US Dollar may weigh on commodity prices and emerging market assets.
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