Dow tumbles 230 points as Fed's Powell says brace for a bumpy recovery

• US stocks fell on Wednesday after Federal Reserve chair Jerome Powell warned of a bumpy recovery in store for the US economy.
• Powell also said that "additional fiscal support could be costly, but worth it."
• Despite "timely and appropriately large" relief policy, the economy's future "is both highly uncertain and subject to significant downside risks," Powell cautioned.
• Oil climbed, with West Texas Intermediate crude rising as much as 1.1%, to $26.05, on hopes for improving demand.
• Watch major indexes update live here.

US stocks fluctuated between gains and losses on Wednesday as Federal Reserve chair Jerome Powell warned of continued economic risk, but signaled the central bank is ready for further action.

Investors looked to Powell's morning speech for clues as to how the central bank may act further to pad the economic downturn. The chairman struck a decidedly negative tone and noted that additional aid is likely needed to drag the economy out of its current slump.

"While the economic response has been both timely and appropriately large, it may not be the final chapter, given that the path ahead is both highly uncertain and subject to significant downside risks," the Fed chair said in a webcast with the Peterson Institute for International Economics.

Here's where US indexes stood shortly after the 9:30 a.m. ET market open on Wednesday:

• S&P 500: 2,846.99, down 0.8%
• Dow Jones industrial average: 23,535.16, down 1% (230 points)
• Nasdaq composite: 8,967.36, down 0.4%

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Investors initially shunned concerns of a premature economic reopening and pushed futures on all three major indexes higher before Powell's speech.

Oil prices rallied, with West Texas Intermediate crude rising as much as 1.1%, to $26.05 per barrel. Brent crude, oil's international standard, gained 1.2%, to $30.34 per barrel, at intraday highs. Russia and Saudi Arabia issued a joint statement on Wednesday saying they see signs of oil demand returning to the virus-slammed market.

Trump cheered the run-up in a Tuesday tweet, saying it made ailing US energy firms "look very good again."

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Despite the stock market's steady rally through May, some experts are wary of beliefs that the bear market is over. Legendary investor Stanley Druckenmiller told members of The Economic Club of New York on Tuesday that he views the market as vastly overvalued and warned the Fed's lifting of credit stresses won't hold.

"The risk-reward for equity is maybe as bad as I've seen it in my career," Druckenmiller said in a webcast. "The consensus out there seems to be: 'Don't worry, the Fed has your back.' There's only one problem with that: Our analysis says it's not true."

Read more: MORGAN STANLEY: Buy these 20 stocks built to profit from a mounting inflation comeback that will alter the investing landscape

Wednesday's mixed open followed a steep decline seen at the end of Tuesday's session. Dr. Anthony Fauci cautioned against an early economic reopening while testifying to the Senate on Tuesday, saying the consequences of such actions "could be really serious." His remarks contributed to equities' afternoon dive, and indexes closed roughly 2% lower.

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