by Sinéad Carew and Bansari Mayur Kamdar
(Reuters) – The New York Stock Exchange ended higher on Wednesday after comments from Federal Reserve Chairman Jerome Powell and economic data reinforced the prospect of a rate cut this year, to mark a turnaround after the cycle of monetary tightening that began in March 2022.
The Dow Jones index gained 0.20%, or 75.86 points, to 38,661.05 points.
The broader S&P-500 gained 26.11 points, or 0.51%, to 5,104.76 points.
The Nasdaq Composite advanced 91.96 points (0.58%) to 16,031.54 points.
On the first day of hearings before the US Congress, Jerome Powell said on Wednesday that he still anticipated that the Fed would cut rates and that the US economy seemed far from a recession. The head of the American central bank, however, refused to give a timetable, indicating that progress against inflation was not guaranteed.
In comments prepared ahead of his hearings, which continue Thursday, Jerome Powell noted that inflation had fallen “substantially” after reaching a 40-year peak in 2022, but he stressed that policy makers Fed needed “more confidence” in falling inflation before cutting rates.
“There were no surprises during this hearing, nor a more cautious tone than that anticipated by the market,” commented Mark Luschini, chief strategist at Janney Montgomery Scott in Philadelphia.
He also said that indicators fueled hopes of a rate cut as well as confidence in the labor market.
Data released today show that the American private sector created fewer jobs than expected in February. The “Jolts” report (Job Openings and Labor Turnover Survey) indicates that the number of job openings in January fell, against a backdrop of gradual easing of the American labor market.
Jerome Powell’s comments were tensely awaited by investors, who had favored profit-taking on Tuesday, with the main Wall Street indices falling by more than 1% in the wake of technologies.
Of the eleven major sectors of the S&P-500, nine finished in the green on Wednesday, led by utilities and information technology, up almost 1%.
Tesla declined for a third consecutive session, after less than reassuring analyst reports and while its Berlin gigafactory suffered an arson attack.
Companies in the cryptocurrency sector gained, such as Coinbase Global, up 10%, and MicroStrategy which jumped 18.6%.
(Written by Jean Terzian)
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