- US stocks traded mostly higher on Wednesday as investors focused on Fed Chair Jerome Powell's latest comments.
- He affirmed rate cuts are likely coming this year, assuming inflation continues to cool.
US stocks traded mostly higher on Wednesday as investors took in the latest guidance from Federal Reserve officials on the timing of interest rate cuts. The S&P 500 and Nasdaq Composite ended the trading day in the green, while bond yields ticked lower.
In an afternoon address, Fed Chair Jerome Powell affirmed that rate cuts were likely coming later in 2024. Still, he suggested policymakers need to have more confidence inflation is moving back to the Fed's 2% price target before issuing the first cut.
"On inflation, it is too soon to say whether the recent readings represent more than just a bump," Powell said in prepared remarks at a Stanford University event. "Given the strength of the economy and progress in inflation so far, we have time to let the incoming data guide our decisions on policy."
That compares to remarks from Atlanta Fed President Raphael Bostic, who cast a hawkish tone this morning and said he foresaw just one rate cut by the end of the year. Fed Governor Adriana Kugler is scheduled to speak after the closing bell.
Investors are continuing to push back on their expectations for an interest rate cut. Markets are pricing in a 62% chance the Fed could cut rates at least once by June, according to the CME FedWatch tool, down from 74% odds priced in a month ago.
"The narrative of falling inflation and imminent Fed rate cuts that drove the stock market's first quarter gains is wobbling in the second quarter," Yung-Yu Ma, the chief investment officer of BMO Wealth Management, said in a note on Wednesday. "We expect more of a market consolidation instead of a correction. The stock market doesn't need Fed rate cuts or even falling inflation, but it's also not in a robust position to quickly digest risks that could rise from accelerating inflation ... or rising long-term interest rates."
Here's where US indexes stood at the 4 p.m. closing bell on Wednesday:
- S&P 500: 5,211.49, up 0.1%
- Dow Jones Industrial Average: 39,127.14, down 0.1% (43 points)
- Nasdaq Composite: 16,277.46, up 0.2%
Here's what else happened today:
- JPMorgan just slashed its price target on Tesla stock and sees 32% downside for Elon Musk's carmaker.
- Tesla could "go bust" and plunge 91% in value, according to one longtime bear.
- China could be poised to grow at double the rate of the US in the coming years, according to one economist.
- Trump Media is suing its cofounders for "failing spectacularly" and "doing significant damage" to its business.
- Here's why stocks will stay under pressure until tax day on April 15.
In commodities, bonds, and crypto:
- West Texas Intermediate crude oil rose 0.40% to $85.49 a barrel. Brent crude, the international benchmark, ticked higher 0.04% to $89.39 a barrel.
- Gold edged up 0.66% to $2,295.51 per ounce.
- The 10-year Treasury yield traded relatively flat around 4.357%.
- Bitcoin dipped 0.32% to $65,891.