Fed’s Next Move Not Likely a Hike: Powell - InvestingChannel

Fed’s Next Move Not Likely a Hike: Powell

The Dow Jones Industrial average rose on Wednesday after Federal Reserve Chair Jerome Powell largely ruled out that the central bank’s next move could be a hike, easing investor worries that it was losing control of sticky inflation. The broader market was lower, with losses from chipmakers dragging down the S&P 500.

The 30-stock index gained 87.37 points to conclude Wednesday at 37,903.29.

The S&P 500 remained negative 17.3 points to 5,018.39.

The NASDAQ slid 52.34 points to 15,605.48.

But stocks tied to artificial intelligence struggled during Wednesday’s session, following disappointing reports from some top AI contenders.

Advanced Micro Devices tumbled 7% after issuing an in-line current-quarter revenue forecast, while Super Micro Computer slid 11% on light revenue.

Several notable earnings reports were also scheduled for release after the bell Wednesday, including Qualcomm and DoorDash.

The central bank opted to hold rates steady, citing a “lack of further progress” in bringing inflation back down toward its 2% goal. However, Powell ruled out the likelihood of a hike in a press conference following the decision.

Investors also reacted positively to the Fed saying it would tap the brakes on one way it tightens conditions for financial markets. Starting in June, the central bank said it will slow the pace at which it allows maturing bond proceeds to roll off its balance sheet without reinvesting them. This is a process known as quantitative tightening.

Investors gained another hint into the state of the labor market ahead of Friday’s April jobs report. ADP’s private employment data showed more workers added than expected last month.

Prices for the 10-year Treasury gained ground, lowering yields to 4.63% from Tuesday’s 4.66%. Treasury prices and yields move in opposite directions.

Oil prices fell $2.79 to $79.14 U.S. a barrel.

Gold prices recovered $23.30 to $2,326.50.

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