- US stocks rose as traders took in Powell's prepared remarks before Congress.
- The chief central banker reiterated in his statement that rate cuts will likely come later this year.
US stocks rose on Wednesday as traders took in Federal Reserve Chair Jerome Powell's prepared remarks before Congress. All three benchmark indexes edged up, while bond yields were about flat.
Ahead of his two days of testimony before Congress, Powell's prepared remarks showed that the chief central banker believed interest rates are likely at their peak, and cuts are likely to come "at some point this year," he added, assuming the economy continues to cool off.
"Ongoing progress toward our 2% inflation objective is not assured," the statement added. "Reducing policy restraint too soon or too much could result in a reversal of progress we have seen in inflation and ultimately require even tighter policy."
Most of that though has already been priced into markets, according to Ian Shepherdson, the chief economist of Pantheon Macroeconomics.
"In other words, the waiting game continues," Shepherdson said in a note on Wednesday. "In short, no surprises, no news."
Investors are largely expecting the Fed to keep interest rates level at its March policy meeting, and have dialed back expectations for aggressive interest rate cuts by the end of the year. Investors are pricing in a 33% chance the Fed will cut rates just 75 basis points by December, according to the CME FedWatch tool, in line with what central bankers have forecast.
Markets were also assessing private payrolls from ADP on Wednesday. The report showed employers added 140,000 jobs last month, fewer than 150,000 estimated by Dow Jones.
The report comes ahead of the closely watched nonfarm payroll report on Friday. A lower reading than January's blowout number could help fuel bets for near-term rate cuts from the central bank.
Here's where US indexes stood shortly after the 9:30 a.m. opening bell on Wednesday:
- S&P 500: 5,107.23, up 0.55%
- Dow Jones Industrial Average: 38,748.25, up 0.42% (-161.99 points)
- Nasdaq Composite: 16,066.19, up 0.79%
Here's what else is going on today:
- Citi strategists wrote in a note that bullish tech bets are at three-year highs, and the market is looking "one-sided," raising the risk of a pullback.
- A real estate CEO is predicting hundreds of banks will fail or be taken over in the next few years.
- Stocks could crash as much as 30% as the odds look overwhelmingly in favor of a recession, according to market prophet Gary Shilling.
In commodities, bonds, and crypto:
- West Texas Intermediate crude oil rose 1.77% to $79.53 a barrel. Brent crude, the international benchmark, rose 1.18% to $83.01 a barrel.
- Gold ticked higher 0.54% to $2,139.40 per ounce.
- The 10-year Treasury yield traded relatively flat around 4.118%.
- Bitcoin dropped 0.74% to $66,906.