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Stocks inched higher on Tuesday, despite hawkish comments from Fed Chairman Jerome Powell.
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Powell noted little progress in combatting inflation, suggesting higher-for-longer interest policy.
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Treasury bond yields hit another record high for 2024.
US stocks were mixed on Tuesday, with equities wavering after the latest comments from Federal Reserve Chairman Jerome Powell cast doubt on the potential for interest rate cuts this year.
Speaking during a panel, the central bank chief said that more confidence was needed in the trajectory of US inflation, which has remained stubbornly high in recent readings.
“More recent data shows solid growth and continued strength in the labor market, but also a lack of further progress so far this year on returning to our 2% inflation goal,” he said.
His comments sent long-dated Treasury yields spiking to another 2024 record, indicating that investors are growing convinced about a higher-for-longer monetary regime.
Fed fund futures are now pricing in the first rate cut for September, instead of the long-touted June timeline.
“Fed Chair Powell moved more decidedly in a hawkish direction as he essentially underscored that the downward trajectory of inflation has essentially stalled,” Quincy Krosby, Chief Global Strategist for LPL Financial, said. “Moreover, he made it clear – rather than his more ambiguous stance regarding a rate easing timetable – that the ‘higher for longer’ narrative remains intact.”
Stocks were propped up throughout the day by strong corporate earnings, with a majority of S&P 500 companies having so far beaten estimates. Rallying on Tuesday were Morgan Stanley and UnitedHealth, which grew nearly 3% and 6%.
Here’s where US indexes stood at the 4:00 p.m. closing bell on Tuesday:
Here’s what else is happening today:
In commodities, bonds, and crypto:
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West Texas Intermediate crude oil rose a modest 0.01% to $85.42 a barrel. Brent crude, the international benchmark, slipped to $89.92 a barrel.
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Gold increased by 0.45% to $2,393 per ounce.
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The 10-year Treasury yield climbed three basis points to 4.663%.
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Bitcoin dropped by 0.9% to $62,998.
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