• The S&P 500 retreated below 4,400 after two consecutive days of gains.
• Ahead of Powell’s speech on Friday, hawkish words from Thomas Barkin boosted tightening expectations on the Fed.
• Eyes on S&P Global PMI data on Wednesday.

In Tuesday's session, the market sentiment remains mixed as investors await fresh catalysts to define their short-term trajectory.

On the downside, the US Treasury yield recovered during the mid-American session following Thomas Barkin's hawkish remarks, where he pointed out that if inflationary pressures don’t show evidence of giving in, more tightening would be necessary. In the meantime, the 2-year yield recovered back above 5% to its highest level since early July making the American stock market lose interest.

For the rest of the week, investors will closely watch US S&P Global Manufacturing and Service PMI figures from August, which will be released on Wednesday. It's worth noticing that a strong economy tends to favour the stock market. Still, due to the Federal Reserve (Fed) stance, evidence of a hot economy may make investors discount a more aggressively Fed, and in that case, it would apply pressure on the S&P.

According to the CME FedWatch tool, markets still expect a pause in September, followed by a 25 basis point (bps) hike in the November meeting. However, those odds may change following Jerome Powell’s speech on Friday at the Jackson Hole Symposium, where investors will look for clues regarding forward guidance.