The stock market saw some choppy action after Jerome Powell downplayed the odds of a recession while signaling the Federal Reserve could potentially hike for two straight meetings, if needed.
(Bloomberg) — The stock market saw some choppy action after Jerome Powell downplayed the odds of a recession while signaling the Federal Reserve could potentially hike for two straight meetings, if needed.
A mixed performance in the S&P 500’s most-influential group drove trading on Wednesday. Nvidia Corp. led losses in chipmakers after a report the US is considering new curbs on the exports of artificial-intelligence chips to China. Meantime, some other tech giants like Tesla Inc. and Google’s parent Alphabet Inc. climbed.
Swap market bets on further tightening this year moved slightly higher. The dollar climbed, following a back-to-back slide. Treasury two-year yields, which are more sensitive to imminent Fed moves, dropped three basis points to 4.7%.
Traders also remained cautious ahead of the results of the Fed’s stress test later Wednesday. While analysts don’t expect any huge negative surprises, a gauge of banks fell after a two-day rally. Several executives have recently been trying to temper shareholder expectations regarding dividend increases and stock buybacks — which had been the focus of investors in previous years.
Mutual funds bought stocks for the first time since February in the past month as fear of missing out outweighed economic concerns, according to Barclays Plc strategists. Still, this hasn’t changed the bigger year-to-date picture of investors mainly flocking to safe assets, they said.
BlackRock Inc. just introduced a bullish call on AI, following a blistering rally that’s already driven the best-ever first half of a year for the tech-heavy Nasdaq 100.Â
The firm’s strategists are still bracing for a mild recession this year and hence a short-term downturn in developed-nation equities. BlackRock argues stock prices aren’t low enough to reflect the risks, though it’s buying tech selectively.
In other corporate news, General Mills Inc. fell after the food producer gave annual guidance that suggests price hikes will no longer make up for slowing sales as inflation-weary shoppers cut back on spending. Netflix Inc. gained as Oppenheimer raised its price target.
Key events this week:
- Eurozone economic confidence, consumer confidence, Thursday
- US GDP, initial jobless claims, Thursday
- Atlanta Fed President Rafael Bostic speaks, Thursday
- China manufacturing PMI, non-manufacturing PMI, balance of payments, Friday
- US personal income and spending, University of Michigan consumer sentiment, Friday
Some of the main moves in markets:
Stocks
- The S&P 500 was little changed as of 11:28 a.m. New York time
- The Nasdaq 100 rose 0.2%
- The Dow Jones Industrial Average fell 0.4%
- The Stoxx Europe 600 rose 0.7%
- The MSCI World index rose 0.1%
Currencies
- The Bloomberg Dollar Spot Index rose 0.4%
- The euro fell 0.4% to $1.0916
- The British pound fell 0.8% to $1.2642
- The Japanese yen fell 0.1% to 144.23 per dollar
Cryptocurrencies
- Bitcoin fell 0.9% to $30,384.69
- Ether fell 1.7% to $1,860.17
Bonds
- The yield on 10-year Treasuries declined three basis points to 3.74%
- Germany’s 10-year yield declined four basis points to 2.31%
- Britain’s 10-year yield declined six basis points to 4.31%
Commodities
- West Texas Intermediate crude rose 2.4% to $69.33 a barrel
- Gold futures were little changed
This story was produced with the assistance of Bloomberg Automation.
–With assistance from Brett Miller, Tassia Sipahutar, Sujata Rao and Denitsa Tsekova.
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