US stocks trade mixed as bond yields sink and Fed chief Powell prioritizes inflation fight
- The Dow Jones Industrial Average rose during a mixed session for US stocks Wednesday.
- Federal Reserve Chairman Jerome Powell put the risk of high inflation above the risk of slowing economic growth.
The Dow Jones Industrial Average rose during a mixed session for US stocks Wednesday as bond yields tumbled and Federal Reserve Chairman Jerome Powell put the risk of high inflation above the risk of slowing economic growth.
Speaking at a European Central Bank forum held in Portugal, Powell reiterated his hawkish stance on fighting inflation and acknowledged that one way to achieve that goal is to slow growth while keeping it positive.
"Is there a risk that would go too far? Certainly, there's a risk," he added. "I wouldn't agree that it's the biggest risk to the economy. The bigger mistake to make ... would be to fail to restore price stability."
Here's where US indexes stood as the market closed at 4 p.m. on Wednesday:
- S&P 500: 3,818.78, down 0.07%
- Dow Jones Industrial Average: 31,029.31, up 0.27% (82.32 points)
- Nasdaq Composite: 11,177.89, down 0.03%
Powell's speech came amid mounting concerns about the economy. The Commerce Department revised its reading on first-quarter GDP lower to show a 1.6% contraction, down from an initial print for a 1.5% drop.
Top economist Mohamed El-Erian warned investors are right to be worried about a US recession as consumer and business confidence falls, while the risk of the Federal Reserve making a policy mistake also rises.
Morgan Stanley Wealth Management's investment chief predicted the S&P 500 will plunge another 10% before bottoming out, saying the Fed's accelerated rate hikes have doubled the odds of a recession.
Meanwhile, the Fed won't worry about stocks falling until panic floods the markets, as it's focused on controlling inflation, Guggenheim's Scott Minerd said.
Elsewhere in the market, famed short seller Jim Chanos is raising more than $200 million for a fund that will bet against US-listed real estate investment trusts that operate data centers.
CoinFlex said that the high-profile investor running a negative balance with the crypto exchange is Roger Ver, a long-time bitcoin evangelist also known as "bitcoin Jesus."
Oil prices reversed lower, with West Texas Intermediate crude down 2% to $109.51 per barrel and Brent crude, the international benchmark, up 2.2% to $115.37.
Gold also gave up earlier gains, dipping 0.1% to $1,819.40 per ounce. The 10-year yield sank 11 basis points to 3.097%.
Bitcoin briefly edged back below $20,000 but recovered and was down 0.85% to $20,091.