US stocks were mixed on Tuesday and the bond yield rally paused as lawmakers pulled more details from Federal Reserve Chair Jerome Powell about how aggressive the central bank is in fighting inflation and interest rates.
Stocks initially fell as senators ousted Mr. Powell with questions as part of the hearing to reconfirm a second term as Federal Reserve chair, but some indicators later recovered. The S&P 500 index recently gained 0.2% after five consecutive daily declines. The Dow Jones Industrial Average lost 0.1, for the fifth consecutive day of decline. The Nasdaq Composite Index is up 0.8%.
Stocks were volatile as the prospect of imminent and faster-than-expected increases in interest rates rattled financial markets this month. Wall Street’s attention appears to be focused on Powell’s testimony for clues about the Fed’s plan to tackle fast-moving inflation. So far, Powell has reiterated the central bank’s intention to move as aggressively as needed to cool inflation, adding that it is a “long way to normal” for monetary policy.
“There is a greater risk now that higher interest rates will coincide with lower growth, and this is clearly a bad combination,” said Altaf Kassam, head of investment strategy at State Street Global Advisors in Europe.
On Tuesday, nearly every corner of the stock market fell early in the session. By late morning, six of the 11 sectors of the S&P 500 were up. Energy, which rose 1.5%, led the higher stocks as oil prices rose.
Stocks that make big single moves include IlluminaAnd
which added 8% after an earnings announcement late on Monday that beat analysts’ expectations. Shares of Rivian Automotive added nearly 3%, offsetting some of the more than 5% decline Monday when the Wall Street Journal reported that the electric truck maker’s chief operating officer had left. Albertsons is down more than 6%, despite the grocery chain reporting higher quarterly sales.
Amazon.com shares rose 0.7%, helping relieve some pressure on the Nasdaq Composite Index. Some meme stocks were also a little higher, including BlackBerryAnd
That added 2.5%.
The rise in government bond yields stalled, a day after the 10-year Treasury yield settled at a 52-week high. The yield on reference bonds fell to 1.761% on Tuesday from 1.779% on Monday.
Investors are also gearing up for the start of earnings season this week. Mr. Kassam said the reports will be particularly important for technology companies that will need to generate strong growth to justify their valuations.
He added that the results on a larger scale should be strong to support US stocks, which look increasingly less attractive than their European peers. “For the United States to maintain its privileged position in the world, it needs profits across the board to become strong.”
Reports later in the week will be dominated by financial firms, with BlackRockAnd
JPMorgan Chase and Wells Fargo are due to report on Friday.
Offshore, the Stoxx Europe 600 Index rose 0.8%, led by gains in the technology sector. Deutsche Bank fell 1.5% and Commerzbank fell nearly 5% after the newspaper reported that Cerberus Capital Management was selling more than 20 million shares of each company.
In Asia, stock markets were mostly lower. Japan’s Nikkei 225 was down 0.9%, while Hong Kong’s Hang Seng was flat. In China, the Shanghai Composite Index fell 0.7%.
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