Powell is set to deliver what almost certainly will be his last keynote address at the central bank's annual conclave.

Traders were selling ahead of the possibility that Fed Chair Jerome Powell's highly anticipated speech Friday could disappoint investor hopes for a signal that interest rate cuts are coming.

Since 1982, the Federal Reserve Bank of Kansas City has hosted an economic conference in Jackson Hole. The Fed chair usually speaks at the event, and, as with any public speech from Powell, investors will pore through his remarks to glean whether the Federal Reserve will cut rates.