US stocks rise as Powell sees a path back to 2% inflation while keeping the labor market strong

What is driving the markets?

Federal Reserve Chairman Jerome Powell said on Wednesday at an European Central Bank forum on central banking that he sees a path back to 2% inflation while maintaining a strong labor market, but cautioned that this could happen. “There is no guarantee that we can do that.”

Investors were also listening to European Central Bank President Christine Lagarde, Bank of England Governor Andrew Bailey and Augustin Carstens, President of the Bank for International Settlements, to speak at the same conference.

On the US economic data front, first-quarter GDP was revised to show a decline of 1.6%, compared to the previous decline of 1.5%.

Stocks were heading towards the end of the miserable first half of the year. The S&P 500 is down 19.6% so far in 2022, weighed down by fears that inflation rates at their highest levels in decades are seriously damaging household sentiment and that the Federal Reserve’s response to higher prices could push the economy into recession.

Read: What’s next for the stock market after the worst first half since 1970? Here’s the history.

On Tuesday, the Conference Board’s index of consumer confidence fell in June to a 16-month low of 98.7, with consumers anticipating the state of the economy at the most cautious level in nearly 10 years. The news helped turn Wall Steet’s early gains into heavy losses, with the Nasdaq Composite down 3%, leaving the tech-heavy index losing 28% for the year so far.

Jeffrey Haley said: “Last week, US stock markets rebounded on the back of the vague logic that a recession in the US would mean lower Fed funds rates, and therefore, bullish equities…,” Chief Market Analyst at OANDA, in a note to customers.

We see: Wall Street’s favorite stock sector has a 43% upside potential as we enter the second half of 2022

“Weaker consumer confidence data from the US Conference Board triggered the opposite reaction on Tuesday, with US stocks lower,” he added.

The Wall State dive has left the Asian and European stock exchanges floundering. Hang Seng HSI in Hong Kong,
-1.88%
The Nikkei is down 2% and the Nikkei 225 is down,
-0.91%
In Japan it fell 0.9%. China Shanghai SHCOMP,
-1.40%
by 1.4% after President Xi Jinping asserted that the regime’s tough policy on the coronavirus was “correct and effective”.

The comments added to concerns that supply constraints in China could exacerbate global inflationary pressures. Those concerns were evident in Spain on Wednesday, where data showed prices rose 10.2% in June, their fastest pace in 37 years. Stoxx 600 SXXP European,
-0.56%
It fell 0.8%.

Oil prices crept higher, with WTI CL.1 crude,
+ 1.57%And the
It rose 1.5 percent to $113.41 a barrel.

US Treasury 10-year yield TMUBMUSD10Y,
3.137%
It slipped 1.3 basis points to 3.167%.

Companies in focus

• shares Pinterest company
  pins,
  -1.55%
  rose 0.2% After the social media company said co-founder Ben Silberman would step down as CEO and be replaced by Google’s e-commerce CEO.

• Bed Bath & Beyond Inc.
  BBBY,
  -21.60%
  Shares fell 18.7 percent after that Disappointing first quarter financial results announced and the dismissal of its chief executive, Mark Triton.

• General Mills Company
  geographic information systems,
  + 5.24%
  Shares rose 4.7% after beating quarterly expectations. The company reported fourth-quarter net income of $822.8 million, or $1.35 per share, nearly double the $416.8 million, or 68 cents per share, last year. Adjusted earnings per share of $1.12, ahead of FactSet’s consensus of $1.01 per share.

Other assets

• ICE DXY US Dollar Index,
  + 0.32%
  It decreased by 0.01%.

• Bitcoin BTCUSD,
  -0.73%
  It fell 4.6% to trade near $20,120.

• GCQ22 August Gold Futures,
  -0.20%
  A gain of $6.30, or 0.4%, to settle at $1,827.90 an ounce.