June 22 (Reuters) – The S&P 500 and Nasdaq closed higher on Thursday as US Federal Reserve Chairman Jerome Powell He went on beating a hawkish drum and suggested that the central bank has not reached the end of its tightening cycle, but assured that the Fed would proceed with caution.
Strong gain on the tech-heavy Nasdaq got a boost from momentum stocks led by Amazon.com (AMZN.O) apple inc (AAPL.O)and Microsoft Corp. (MSFT.O)while the S&P 500’s advance was more modest.
industrial stocks (.SPLRCI) and finance (.SPSY) kept the Dow blue-chip essentially flat.
“Investors are playing tug of war, like they’re pulling the petals off a daisy saying ‘bull market, not a bull market,'” said Sam Stovall, chief investment strategist at CFRA Research in New York. “We don’t have much to trade, second quarter earnings don’t kick in for a couple of weeks yet.”
Powell, appearing before the Senate Banking Committee for his semiannual testimony on monetary policy reiterated your view that more interest rate hikes are likely in the coming months, a sentiment repeated by Fed Governor Michelle Bowman earlier in the session.
“The market believes the Fed will raise rates one more time, not two more times, as the FOMC post-meeting summary implies,” Stovall added. “Also, yesterday and today, Powell reiterated that they will depend on the data and Wall Street expects inflation to cool faster, and unemployment to start rising, which is what the Fed is aiming for with its rate hikes.”
Investors were surprised when the Bank of England implemented a 50 basis point higher-than-expected rate hike to tackle Britain’s stubborn inflation, further evidence that strong price growth remains a drag on the global economy.
At last glance, financial markets have priced in a 77% probability of another 25 basis point rate hike at the end of the Fed’s July meeting, according to the CME’s FedWatch tool.
On the economic front, jobless claims held firm at a 20-month high and the Conference Board’s leading economic index posted its 14th consecutive monthly decline, suggesting that the Fed’s efforts to rein in the economy are beginning to have the desired effect.
The Dow Jones Industrial Average (.DJI) fell 4.81 points, or 0.01%, to 33,946.71, the S&P 500 (.SPX) gained 16.2 points, or 0.37%, to 4,381.89 and the Nasdaq Composite (.IXIC) added 128.41 points, or 0.95%, to 13,630.61.
Of the top 11 S&P 500 sectors, five ended the session higher, with consumer discretionary (.SPLRCD) enjoying the highest percentage of progress.
Real estate (.SPLRCR) and energy (.SPNY) registered the largest decreases.
spirit aerosystems (ESPR.N) fell 9.4% after the aircraft parts supplier Announced would suspend production at its Wichita, Kansas, plant after workers announced a strike beginning June 24.
Boeing (PROHIBITION) shares fell 3.1%.
US-listed Accenture shares fell 1.9% after the IT consulting firm forecast weaker-than-expected fourth-quarter revenue.
Restaurants in Darden, Olive Garden’s father (DRI.N) issued a disappointing Annual earnings outlook due to commodity price inflation. Its shares fell 2.6%.
Issues going down outnumbered going up on the New York Stock Exchange by a ratio of 2.17 to 1; on Nasdaq, a 1.62-to-1 ratio favored decliners.
The S&P 500 posted 16 new 52-week highs and 5 new lows; the Nasdaq Composite posted 55 new highs and 118 new lows.
Volume on US exchanges was 9.6 billion shares, compared with the full-session average of 11.37 billion over the past 20 trading days.
Reporting by Stephen Culp; Additional reporting by Shubham Batra, Shristi Achar A and Medha Singh in Bengaluru; Edited by Aurora Ellis
Our standards: The Thomson Reuters Trust Principles.
Discover more from PressNewsAgency
Subscribe to get the latest posts sent to your email.