By Liz Moyer
Investing.com -- U.S. stocks could not hold onto modest gains, closing lower on Wednesday after Federal Reserve Chair Jerome Powell concluded his first day of testimony on Capitol Hill as part of his semiannual report on the economy.
At 4:12 PM ET, the Dow Jones Industrial Average was down 47 points or 0.2%, while the S&P 500 was down 0.1% and the NASDAQ Composite was down 0.1%.
Powell visited the Senate Banking Committee this morning and will visit the House tomorrow. He told lawmakers the Fed is "strongly committed" to taming inflation and assured them that the economy is strong enough to withstand interest rate increases used as a tool to achieve that goal.
Powell also said the pace of future rate increases would depend on what the data is telling the central bank about inflation, whether it persists or is cooling off. He acknowledged that while a recession isn't the goal, it could be an outcome. It was just a week ago that the Fed raised rates by three-quarters of a percentage point, the biggest move in decades, and Powell said another 50- to 75-basis-point increase could be in the making at the July meeting.
Banks are already raising their expectations for a recession. Yesterday Goldman set the odds at 30% in the next year, while Citigroup is now saying there’s a 50% chance of a global recession as consumers pull back on spending.
President Joe Biden has been trying to do his part to ease inflation, asking Congress to suspend the federal tax on gasoline and diesel fuel for three months.
Energy stocks were crushed by falling oil prices. Crude Oil WTI Futures fell nearly 4%, to $105 a barrel, and Brent Oil Futures crude fell 3.4% to $110.76. Gold Futures were flat at $1,840 an ounce.
ConocoPhillips (NYSE:COP) stock fell more than 6%, while Marathon Oil Corporation (NYSE:MRO) shares fell 7%. Occidental Petroleum Corporation (NYSE:OXY) fell 3.6%.