Final hours! Save up to 55% OFF InvestingProCLAIM SALE

S&P 500 Climbs as Powell Gets Testimony Underway

Published 06/22/2021, 01:18 PM
Updated 06/22/2021, 03:15 PM
© Reuters.
US500
-
DJI
-
MSFT
-
GOOGL
-
AAPL
-
AMZN
-
NVDA
-
IXIC
-
US10YT=X
-
META
-
GOOG
-
BTC/USD
-

By Yasin Ebrahim

Investing.com – The S&P 500 inched higher as Federal Reserve Chairman Jerome Powell in testimony before Congress Tuesday, largely stuck to script, shrugging off the factors boosting inflation as temporary, and talking up the prospect of jobs gains ahead. 

The S&P 500 rose 0.57%, the Dow Jones Industrial Average gained 0.30%, or 101 points, and the Nasdaq Composite was up 0.68%.

Powell largely stuck to his prepared remarks in testimony before a House select subcommittee hearing on the Fed’s pandemic response and the economy, reiterating the rapid pace of inflation will fade, and job gains will pick up in the coming months.

“[P]erhaps all of the overshoot in inflation comes from categories such as rising used car and trucks, airplane tickets, hotel prices that have been affected by the reopening of the economy," Powell said, in response to questioning from lawmakers on whether inflation is transitory. These factors "will ultimately start to decline."

“[W]hile these effects have turned out to be larger than we expected, the incoming data are consistent with the view that these factors will wane over time,” he added.

Ahead of the speech, differing remarks from several Fed members – who lean dovish or hawkish – on how soon to rein in easy monetary policy measures have raised concerns over a possible growing divide among Fed members.

St. Louis Fed President James Bullard and Dallas Fed president Robert Kaplan signaled that tapering could come sooner rather than later. Meanwhile New York Fed President John Williams called for support to remain in place as the economy is still a ways off from achieving the Fed's goals.

Sentiment on the broader market remains tentatively positive following Monday's rally, with consumer discretionary stocks, materials and technology leading to the upside.

Technology stocks continued to ride the weakness in bond yields, with the United States 10-Year remaining below 1.5%.

Microsoft (NASDAQ:MSFT, Apple (NASDAQ:AAPL), Facebook (NASDAQ:FB) and Amazon.com (NASDAQ:AMZN) were higher, while Google-parent Alphabet (NASDAQ:GOOGL) was flat.

Alphabet came under the spotlight after the EU launched a formal antitrust investigation into the company's core digital ad business. 

As well as falling yields, the broader tech sector was helped by a boost from semiconductor stocks, led by Nvidia.

Nvidia (NASDAQ:NVDA) was up 2% after the chipmaker made further efforts to deter cryptocurrency miners from purchasing its chips to avoid the boom and bust demand cycle seen a few years ago when a sharp turn lower in cryptocurrency mining activity resulted in a chip supply overhang.

Some on Wall Street sees further gains for tech ahead, with quarterly results on the horizon.

"Overall we remain very bullish on tech stocks for 2H as robust June results and guidance around the corner will be another positive catalyst for the tech sector in our opinion," Wedbush said.

In cryptocurrency news, Bitcoin briefly fell below the $30,000 since January as the popular crypto continues to search for meaningful support following its slump from $60,000 earlier this year.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.