Stocks rise ahead of Powell’s new testimony

US stocks fluctuated on Wednesday after the release of two data on vacancies, which showed that the labor market remains tight against the backdrop of severe inflation.

Wall Street also heard from Federal Reserve Chairman Jerome Powell before the House Financial Services Committee on Wednesday morning. Powell went on to stress that “no decision was made” on the size of the interest rate hike ahead of the March meeting.

“When we say we will look at the data set that these next reports will include. We will carefully analyze. No decision has yet been made on the March meeting. More importantly, we are not on track,” Powell said during his second meeting. testimonial day before Congress.

At noon, the S&P 500 (^GSPC) was up 0.2%, while the Dow Jones Industrial Average (^DJI) was down 0.1%. Contracts for the high-tech Nasdaq Composite (^IXIC) rose 0.5%.

Bond yields declined along with the strengthening of the dollar. The yield on the benchmark 10-year US Treasury fell to 3.95% on Wednesday at noon.

U.S. stocks fell sharply on Tuesday after Powell told the Senate Banking Committee that interest rates could rise “higher than previously expected” as the Fed continues its aggressive fight against inflation.

Powell’s comments on Capitol Hill sent stocks selling 1.5%, according to JP Morgan’s trading desk. Losses on Tuesday led to declines in all sectors, with the largest declines for the day recorded in the financial and real estate sectors.

US Federal Reserve Board Chairman Jerome Powell testifies before the Senate Committee on Banking, Housing and Urban Affairs.

US Federal Reserve Board Chairman Jerome Powell testifies before the Senate Committee on Banking, Housing and Urban Affairs. (Photo by Mandel NGAN/AFP) (Photo by MANDEL NGAN/AFP via Getty Images)

Treasury yields were higher, with 2-year yields exceeding 5% and the spread between 10-year and 2-year US Treasury yields inverted for the first time since September 1981. According to strategists at Deutsche Bank, the achievement of this level signals that a recession can begin or occurred within a maximum of eight months.

“Powell’s speech indicates the Fed will be heavily dependent on short-term data for upcoming rate decisions,” Michael Feroli, chief US economist at JP Morgan, wrote in a Wednesday morning note.

“With macroeconomic data for January mostly hawkish, Friday’s NFP and next Tuesday’s CPI are the most important catalysts for the Fed’s decision between 25 and 50 basis points,” Feroli added.

However, in terms of economic data, ADP’s monthly private sector job growth rose by 242,000 in February, beating the consensus estimate of 200,000. ADP also tracked wage growth for those workers who remained in office , which slowed to 7.2% last month, the slowest growth rate in the last year.

“There is a compromise in the labor market right now,” Nela Richardson, chief economist at ADP, wrote in a press release. “We are seeing solid hiring, which is good for the economy and workers, but wage growth is still quite strong. A slight slowdown in wage growth alone is unlikely to bring inflation down quickly in the short term.”

Meanwhile, according to the US Bureau of Economic Analysis and the US Census Bureau, the monthly US foreign trade deficit widened to $68.3 billion in January, lower than the projected deficit of $68.7 billion, as imports increased more than exports.

Another highlight Wednesday morning was the January job postings report, which fell to 10.82 million from an upwardly revised 11.2 million the previous month, the Bureau of Labor Statistics said. Construction, Leisure, Hospitality and Finance saw significant job cuts.

“While the January JOLTS report shows that the number of vacancies is moving in the right direction for the Fed, the decline is too modest to convince us that conditions in the labor market are cooling enough to reduce inflation,” writes Matthew Martin, an American economist at Oxford Economics. in a post-release statement.

The February jobs report, released on Friday, will provide more information about the strength of the economy. Economists expect the economy to add 215,000 new jobs, a slower pace compared to January’s 517,000 jobs added.

The unemployment rate is expected to remain stable at 3.4%. Another key point to read will be wage growth, with average hourly earnings expected to increase by 0.3% per month and up 4.7% year-over-year.

In terms of stocks, Occidental Petroleum Corporation (OXY) gained almost 2% on Wednesday morning after a regulatory report showed that Warren Buffett’s Berkshire Hathaway bought nearly 6 million shares of the oil company in recent days, increasing its stake in the company to 200. ,2 million. shares worth $12.2 billion.

Shares of CrowdStrike Holdings, Inc. (CRWD) rose 7% on Wednesday after the security software provider reported fourth-quarter earnings that beat analysts’ expectations and issued stronger guidance for the first fiscal quarter.

Tesla (TSLA) shares fell nearly 2% after Berenberg analyst Adrian Janoshik downgraded his rating on the stock from Buy to Hold, citing “based on misplaced price war fears that appear to be were accepted by the market,” Janoshik said. Separately, the National Highway Traffic Safety Administration (NHTSA) launched an investigation into the Model Y SUV due to issues with their steering wheels.

Dani Romero is a reporter for Yahoo Finance. Follow her on Twitter @daniromerotv

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