- US stocks edged up Wednesday ahead of Jerome Powell’s second day speaking in Washington, DC.
- Stocks are coming off a Tuesday sell-off as Powell signaled steeper rate hikes are on the table.
- Meanwhile, private payroll data came in hotter than expected for the month of February.
US stocks opened higher on Wednesday as focus remained on Federal Reserve chair Jerome Powell as he prepared to sit for a second day of testimony before lawmakers in Washington, DC.
Stocks sold off a day earlier as Powell indicated that steeper interest rate hikes may be required. Following his statement, the odds of a 50-basis-point rate hike this month more than doubled, according to CME’s FedWatch Tool.
“[T]he latest economic data have come in stronger than expected, which suggests that the ultimate level of interest rates is likely to be higher than previously anticipated,” Powell said. “If the totality of the data were to indicate that faster tightening is warranted, we would be prepared to increase the pace of rate hikes. Restoring price stability will likely require that we maintain a restrictive stance of monetary policy for some time.”
Meanwhile, ADP data Wednesday showed businesses added more jobs than expected in February, with private payrolls jumping by 242,000, beating a Dow Jones estimate of 205,000. The reading comes ahead of the key non-farm payrolls report due out on Friday.
Separately, the US trade deficit in goods and services inched higher in January, the Commerce Department reported Wednesday. The deficit hit $68.3 billion, $1.1 billion higher than December but below the estimated $68.7 billion.
Here’s where US indexes stood as the market opened 9:30 a.m. on Wednesday:
- S&P 500: 3,989.63, up 0.08%
- Dow Jones Industrial Average: 32,874.86, 0.06% (18.40 points)
- Nasdaq Composite: 11,561.42, up 0.3%
Here’s what else is going on:
- The risk of a stock market crash has skyrocketed thanks to Powell’s comments, top economist Mohamed El-Erian said
- “Bond King” Jeffrey Gundlach warned of jumbo rate hikes because the economy is too hot.
- Troubled crypto bank Silvergate is talking to FDIC regulators to find a way to avoid a collapse.
- Warren Buffett’s Berkshire Hathaway snapped up $355 million of Occidental stock.
- Ken Griffin’s Citadel is negotiating a company-wide ChatGPT license.
- Adidas will slash its dividends as the split with Kanye West’s Yeezy looks set to wipe out $1.3 billion in earnings.
In commodities, bonds, and crypto:
- Oil prices slipped, with West Texas Intermediate down 1.43% to $76.47 a barrel.
- Brent crude, the international benchmark, inched lower 0.83% to $82.46 a barrel.
- Gold edged lower 0.14% to $1,817.00 per ounce.
- The 10-year yield ticked higher five basis points to 3.919%.
- Bitcoin moved lower 0.32% to $22,001.10.