Stock market today: Wall Street wavers following congressional testimony from Powell
By Damian J. Troise And Alex Veiga, The Associated Press on July 9, 2024.
NEW YORK – Stocks closed mixed on Wall Street after testimony from Federal Reserve Chair Jerome Powell in front of Congress provided little new guidance on the Fed’s plans on when it might lower interest rates. The S&P 500 and the Nasdaq composite each rose 0.1% Tuesday, adding to their recent records. The Dow Jones Industrial Average fell 52 points, or 0.1%. Helen of Troy, which makes Osprey and OXO products, sank nearly 28% after posting results that fell far short of forecasts. Treasury yields rose slightly in the bond market. The yield on the 10-year Treasury edged up to 4.29%. THIS IS A BREAKING NEWS UPDATE. AP’s earlier story follows below. Stocks drifted in mostly listless trading on Wall Street Tuesday following Federal Reserve Chair Jerome Powell’s testimony before the Senate Banking Committee. The S&P 500 and Nasdaq composite were each up 0.1%. Both indexes are on track to add to their records from Monday. The Dow Jones Industrial Average was down 40 points, or 0.1%, as of 3:35 p.m. Eastern. Among S&P 500 stocks, gains in banks helped outweigh a pullback in tech sector companies. JPMorgan Chase rose 1.6% and Bank of America added 2.3%, while Microsoft fell 1.6% and Broadcom slid 1.5%. Consumer goods company Helen of Troy, which makes Osprey and OXO products, sank 28.5% after posting first-quarter results that fell far short of forecasts. Chipmaker Intel rose another 1.9% following Monday’s 6.2% gain as bullish analysts suggest the company’s next processors will be in high demand for AI-related products. Treasury yields rose slightly in the bond market. The yield on the 10-year Treasury note edged up to 4.29% from 4.28% late Monday. The market’s muted reaction reflected how Powell’s testimony didn’t give Wall Street any clear indication on the timing for when the central bank may begin cutting its benchmark interest rate. “The market is really seeing no surprises today and so that’s allowing it to modestly drift higher,” said Lisa Erickson, head of public markets at U.S. Bank Wealth Management. The Fed has remained cautious about making a move on interest rates, holding its benchmark interest rate at its highest level in more than two decades as it waits cautiously for more signals that inflation is still cooling. While prices have eased sharply over the last two years as the Fed raised interest rates, the central bank’s goal is to cool inflation back to its target of 2% without slowing economic growth too much. Most measures of inflation show that it is easing, though at a much slower pace throughout 2024. The rate is hovering around 3% and continues exerting pressure on consumers, especially those with lower incomes. In his testimony Tuesday, Powell noted that “elevated inflation is not the only risk we face.” Cutting rates “too late or too little could unduly weaken economic activity and employment,” he said. A strong jobs market and consumer spending have been supporting economic growth, though the pace has slowed. Consumer spending has also been weakening as inflation prompts shifts in priorities for many to necessities over discretionary items. Borrowing costs are also higher because of elevated interest rates, adding more pressure on consumers. Wall Street is hoping for rate cuts this year that could alleviate some pressure on both consumers and investors. Most experts are expecting one rate cut from the Fed this year, but not until September. The Fed holds its next policy meeting later this month. “If the Fed can’t start cutting rates in the next couple months, the economy would be at risk of weakening even further in the short term and that would also push back when we’d expect the economy to re-accelerate,” said Dave Sekera, chief U.S. market strategist at Morningstar. Powell is scheduled to testify on Wednesday before the House Financial Services Committee. His testimony comes ahead of the new inflation updates later this week. Wall Street expects the latest government report on Thursday to show consumer prices eased to 3.1% in June from 3.3% in May. A report for inflation at the wholesale level, before costs are passed on to consumers, is expected Friday. Traders are also looking ahead to several earnings reports this week. Delta Air Lines will report its results on Thursday. JPMorgan, Citigroup and Wells Fargo will report results on Friday. Those updates could provide more insight into consumer debt levels and whether banks are worried about payments and potential delinquencies. ___ AP Economics Writer Christopher Rugaber contributed to this report. 25-24
