Stock indexes on Wall Street closed mixed Tuesday after Federal Reserve Chair Jerome Powell’s testimony before Congress. The S&P 500 and Nasdaq composite each rose 0.1% to reach all-time highs, while the Dow Jones Industrial Average slipped 0.1%. Powell reiterated that inflation has eased in the past two years but remains above the central bank’s target, noting the risks of cutting interest rates too late or too little.
While Powell’s testimony provided little new guidance on interest rate cuts, traders are betting on a 70% chance of a rate cut by September. The Fed remains cautious about lowering rates to ensure inflation cools back to its 2% target without significantly impeding economic growth. Consumer spending has weakened due to inflation, forcing a shift in priorities towards necessities over discretionary items.
Wall Street is hoping for rate cuts this year to alleviate pressure on consumers and investors. Gains in banks offset declines in other sectors, with JPMorgan Chase rising 1.2% and Bank of America adding 2%. As stocks continue to climb, the S&P 500 reached its 36th record of the year. Investors are looking ahead to upcoming reports on consumer and wholesale inflation levels, as well as earnings reports from major companies like Delta Air Lines and financial institutions.
