Market Entry Signals from the Fed Watch Tool Indicator in AugustE-mini S&P 500 FuturesCME_MINI_DL:ES1!Quants_HKWith the 2026 Jackson Hole Global Central Bank Conference concluding in late August, market focus shifted to the upcoming FOMC meeting in mid-September. Initially, the market wasn't overly nervous. Prior to the Jackson Hole conference, the market anticipated that US stocks would fluctuate at high levels before potentially resuming their upward trend. This was further supported by Nvidia's better-than-expected earnings on August 26th and the relatively neutral stance of new Fed Chairman Kevin Warsh, leading to continued market confidence in the future of US stocks. However, Kevin Warsh's speech on August 28th revealed an unexpectedly hawkish stance, emphasizing the Fed's unwavering focus on its established goal of reducing inflation to 2% and explicitly warning that the door to further monetary tightening would remain open if the inflation decline stalled. These remarks, blaming the Fed entirely for combating high inflation, instantly shattered the market's previous optimistic expectations. The three major US stock indices immediately came under pressure, and US Treasury yields collectively surged. Technology stocks and highly valued sectors naturally bore the brunt, causing Nvidia's stock price to struggle to rise, and other technology stocks also finding it difficult to make a breakthrough. Under the hawkish shadow of the Jackson Hole symposium, the upcoming Federal Reserve interest rate meeting on September 15-16 has become the focus of global investors. The most pressing concern in the market is whether the Fed will resume its interest rate hike cycle. If you recall our previous launch of the Fed Watch Tool Indicator, it can be used as an entry signal based on changes in the market's expected probability of interest rate hikes/cuts. Here's a look at the changes in market expectations regarding the probability of an interest rate hike since early August: Early August (after the non-farm payroll data release): Stand unchanged: 67.0% (mainstream expectation) Rate hike of 0.25% (1 basis point): 33.0% Background: The market had just experienced weak employment data, and it was generally believed that the Fed would choose to observe in September and not rush to act. August 26 (eve of the annual meeting): Stand unchanged: 63.4% Rate hike of 0.25% (1 basis point): 36.6% Background: Geopolitical factors led to rising oil prices, but at the same time, Nvidia announced better-than-expected earnings. August 28 (Jackson Hole Symposium Day): Stand unchanged: 42.5% Raise rate by 0.25% (1 basis point): 57.5% Background: Newly appointed Fed Chairman Kevin Warsh delivered a strongly hawkish speech against inflation, clearly stating that he takes full responsibility for high inflation, directly triggering market repricing. September 2: Stand unchanged: Approximately 34.0% Raise rate by 0.25% (1 basis point): Approximately 66.0% Background: The market has further solidified its hawkish consensus on a 0.25% rate hike in September. Looking at our FedWatch Tool Indicator, there have been two short-selling signals during this period. With approximately 11 FOMC meetings annually, this indicator should provide at least 11 entry signals per year. Furthermore, the likelihood of rate hikes/cuts may change due to economic data or other events, prompting the indicator to issue corresponding entry signals, and these signals are generally quite accurate. 【Disclaimer】 This content is for educational and research purposes only. It does not constitute investment advice, solicitation, or recommendation of any securities. Readers should make independent investment decisions and assume their own risk.