Wall Street closed higher as Powell finished his testimony

June 22 (Reuters) – The S&P 500 and the Nasdaq closed higher on Thursday as US Federal Reserve Chairman Jerome Powell continued to beat the hawkish drum and signaled that the central bank had not reached the end of its tightening cycle, but offered reassurance that the Fed would proceed with caution. .

Nasdaq’s strong high-tech gain 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.

Industrials (.SPLRCI) and Financials (.SPSY) kept the Dow basically excellent.

“Investors are playing tug-of-war, as if they’re pulling the petals from a daisy flower saying, ‘It’s a bull market, not a bull market,'” said Sam Stovall, chief investment analyst at CFRA Research in New York. Starting in two weeks now.”

Appearing before the Senate Banking Committee for his biannual testimony on monetary policy, Powell reiterated his view that more interest rate increases are likely in the coming months, a sentiment echoed by Fed Governor Michael Bowman earlier in the session.

Stovall added, “The market believes the Fed will raise interest rates again, not twice more as evidenced by the FOMC meeting summary.” “Additionally, Powell reiterated yesterday and today that they are going to be data dependent and Wall Street expects inflation to subside faster, and unemployment will start to move higher which is what the Fed meant by raising interest rates.”

Investors were surprised when the Bank of England implemented a 50 basis point rate hike larger than expected to tackle Britain’s stubborn inflation, further evidence that rising prices remain a headwind for the global economy.

At last glance, financial markets have identified a 77% probability of another 25 basis point rate hike at the close of the Fed’s July meeting, according to CME’s FedWatch tool.

On the economic front, jobless claims settled at a 20-month high and the Conference Board’s leading economic indicator posted its 14th straight monthly decline, indicating that the Fed’s efforts to dampen the economy are starting to have their intended effect.

The Dow Jones Industrial Average fell 4.81 points, or 0.01%, to 33,946.71, the Standard & Poor’s 500 increased 16.2 points, or 0.37%, to 4,381.89 points, and the Nasdaq Composite added 128.41 points, or 0.95%, to 13,630.61.

Of the 11 major S&P 500 sectors, five ended the session higher, with consumer (.SPLRCD) enjoying the largest advance.

Real estate (.SPLRCR) and energy (.SPNY) recorded the biggest declines.

Spirit AeroSystems (SPR.N) fell 9.4% after the aircraft parts supplier announced it would suspend production at its Wichita, Kansas, plant after workers went on strike on June 24.

Boeing shares fell 3.1 percent.

Shares of US-listed Accenture fell 1.9% after the information technology consulting firm forecast weaker-than-expected fourth-quarter revenue.

Darden Restaurants, parent company Olive Garden (DRI.N), issued a disappointing annual profit forecast due to commodity price inflation. Its shares fell 2.6%.

Low issues outnumbered high issues on the NYSE by a ratio of 2.17 to 1; On the Nasdaq, the ratio was 1.62 to 1 in favor of declining stocks.

S&P 500 hits 52-week high and 5 new lows; The Nasdaq Index posted 55 new highs and 118 new lows.

Trading volume on US exchanges reached 9.60 billion shares, compared to an average of 11.37 billion for the full session over the last 20 trading days.

Reporting by Stephen Kolb. Additional reporting by Shubham Batra, Shristi Achar and Medha Singh in Bengaluru. Editing by Aurora Ellis

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