Stock indexes on Wall Street closed mixed Tuesday after remarks by Federal Reserve Chair Jerome Powell in front of Congress did little to change the market’s expectations for the timing of a Fed interest rate cut.
The S&P 500 and Nasdaq composite each rose 0.1%, enough to bump up the indexes to all-time highs for the second time this week.
The Dow Jones Industrial Average slipped 0.1% after spending much of the day drifting between small gains and losses.
In his testimony Tuesday before the Senate Banking Committee, Powell reiterated that inflation has eased notably in the past two years, though it remains above the central bank’s 2% target. He also noted that there’s a risk in the Fed moving to cut interest rates too late or too little, warning either scenario could end up weaking the economy and job market.
Powell’s testimony offered little new guidance on the Fed’s plans for when it might lower interest rates. Traders are still betting that there’s a 70% chance that the central bank will cut its main interest rate as soon as September, according to data from CME Group.
“The market is really seeing no surprises today and so that’s allowing it to modestly drift higher,” said Lisa Erickson, head of public markets at U.S. Bank Wealth Management.
Treasury yields rose slightly in the bond market. The yield on the 10-year Treasury note edged up to 4.30% from 4.28% late Monday.
The Fed has remained cautious about making a move on interest rates, holding its benchmark interest rate at its highest level in more than two decades as it waits cautiously for more signals that inflation is still cooling.
While prices have eased sharply over the last two years as the Fed raised interest rates, the central bank’s goal is to cool inflation back to its target of 2% without slowing economic growth too much.
Most measures of inflation show that it is easing, though at a much slower pace throughout 2024. The rate is hovering around 3% and continues exerting pressure on consumers, especially those with lower…
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