Wall Street struggled for direction on Tuesday as investors digested a slew of US economic data and ready for the start of Federal Reserve chairman Jay Powell’s semi-annual congressional testimony.
US stocks flitted between slight gains and losses in opening trade, with the S&P 500 and the Dow Jones Industrial Average both edging 0.1 per cent higher at 2,781.48 and 25,735.46 while the Nasdaq Composite was largely unchanged at 7,418.65.
The muted moves follow three sessions of gains for the benchmark indices, and come despite Mr Powell, the newly appointed Fed chair, giving an upbeat assessment of the US economy and promising to push ahead with plans for gradual increases in interest rates this year in his prepared remarks that were released earlier on Tuesday.
The comments from Mr Powell also sent the dollar further into positive territory. The DXY index, a measure of the buck against a basket of its peers, climbed 0.3 per cent to 90.14. Treasuries however were largely unchanged, with the yield on the 10-year note at 2.8642 per cent.
“The tone of Powell’s written testimony suggests that the Fed position hasn’t really changed under its new leadership with gradual hikes remaining the theme,” said James Knightley, chief international economist at ING. “However, his hints at the upside potential for inflation and the increasing positives for growth suggest the risks are skewed towards a more aggressive monetary policy response.”
Financials and energy stocks led the gains on the S&P 500, advancing 0.6 per cent and 0.5 per cent respectively.
Retailers were also in demand as upbeat results from Macy’s and Dillard’s helped trigger a rally in shares on rivals such as Kohl’s and JCPenney.
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