Wall Street’s main indices cut losses and the Nasdaq turned positive on Wednesday when Federal Reserve Chairman Jerome Powell said the US central bank was “strongly committed” to bringing inflation down to a 40-year high .
In his prepared remarks before the Senate Banking Committee, Powell reiterated that continued policy rate hikes would be appropriate, but the pace of changes will continue to depend on incoming data and the evolving outlook for the economy.
His remarks came a week after the US central bank raised the interest rate by three-quarters of a percent, the biggest increase since 1994. Economists expect a similar move next month, followed by a half percentage-point, according to a Reuters poll. increase in September.
“It’s very much on the fresh side. It’s a little less obvious and a little less than fully committed,” said Thomas Simmons, a money market economist in Jefferies, New York.
“That’s not what we would do—whatever it takes to make this ironclad commitment that you might expect will probably be preceded by really aggressive rate hikes that could lead to a rapid decline in production.”
Wall Street has been whipsawed in recent sessions as traders debate whether aggressive policy moves by central banks could trigger a global economic slowdown.
At 10:15 am, the Dow Jones Industrial Average was down 70.95 points, or 0.23%, at 30,459.30, the S&P 500 was down 0.51 points, or 0.01%, at 3,764.28 and the Nasdaq Composite was down 42.53 points, or 0.38. %, at 11,111.83.
Oil prices fell by more than $5, hovering around $110 a barrel against the global benchmark Brent. The energy sector slipped 3.3% and was the top gainer among 11 major S&P sectors.
The decline issues in the number of advances to a 1.54-to-1 ratio on the NYSE. Advancing issues declined to a 1.01 to 1 ratio on the Nasdaq.
The S&P index posted a new 52-week high and 38 new lows, while the Nasdaq posted six new highs and 126 new lows.
This story has been published without modification in text from a wire agency feed. Only the title has been changed.