Uncertainty on Wall Street Amid Powell's Testimony
On Wall Street, a sense of uncertainty lingered as investors reacted to testimony by Federal Reserve Chair Jerome Powell. Addressing Congress, Powell conveyed that the central bank's fight to control inflation is still a work in progress.
Stock Market Performance
At 15:29 GMT (11:29 ET), the market showed mixed signs. The Dow Jones Industrial Average remained largely steady, down by only 2 points. Conversely, the S&P 500 saw a 0.4% decrease and the NASDAQ Composite experienced a more significant 1.2% slip.
Powell on Inflation
In his prepared statement, Powell emphasized the substantial work still required to suppress inflation. He acknowledged, "The process of getting inflation back down to 2% has a long way to go." Following this session in the House, Powell is scheduled to testify before the Senate tomorrow.
Federal Reserve's Anticipated Moves
Futures traders anticipate that the Federal Reserve will increase rates by a quarter percentage point at its next meeting in July. This follows a pause on rate hikes at the most recent gathering. The Federal Reserve aims to steer inflation back towards its 2% target. Powell's written remarks underscored that nearly all participants expect further rate increases to be appropriate by year's end.
Effect on Stock Market
Stocks had previously been rallying in response to the prospect of the Federal Reserve ceasing its interest rate hikes. However, this rally has faltered over the past few trading sessions.
Notable Market Movers
Shares of FedEx Corporation (NYSE: FDX) slid 1.3% following the logistics giant's report of a quarterly earnings drop, blaming a global shipping downturn for hampering the sector's margins.
Chinese electric vehicle stocks showed varied responses to the country's newly announced tax breaks aiming to bolster EV sales. Li Auto Inc. (NASDAQ: LI) stocks rose 2.5%, while Nio Inc. (NYSE: NIO) and Xpeng Inc. (NYSE: XPEV) saw declines of 2.3% and 2.2% respectively.
Amazon in the Spotlight
Amazon.com, Inc. (NASDAQ: AMZN) has announced its annual sale, Prime Day, to be held on July 11 and 12, featuring invite-only deals for the first time this year. However, the company faces legal action from the Federal Trade Commission for allegedly pressuring customers into signing up for Prime without consent. Amazon shares subsequently fell 1.2%.