The benchmark S&P 500 index was steady for the day, hovering about 0.9% below its record peak. The tech-heavy Nasdaq was 1.2% below its all-time high as the de-escalation in Middle East hostilities supported risk sentiment.
The Nasdaq 100 – a subset of the Nasdaq composite index – touched an intraday record high.
Despite isolated violations of the ceasefire brokered by U.S. President Donald Trump a day earlier, investors remained optimistic that the truce between the two warring nations would last.
Powell, in his congressional testimony, said Trump’s tariffs can cause a one-time jump in prices, but the risk it could cause more persistent inflation is large enough for the central bank to be careful in considering more rate cuts.
The comments come a day after the top policymaker emphasized the Fed’s wait-and-watch approach, but signaled immediate rate cuts could be considered if inflation cools or if the labor market weakens. “Investors have been held in a policy-driven market for quite some time. There’s a lot of tariff rhetoric that has slowly worked its way through,” said Shiraz Ahmed, founder and CEO of Sartorial Wealth Inc. “Investors are now really just wanting to see to what degree they (policymakers) will start coming in line and eventually actually start cutting rates to help support the market.”
Traders are pricing in a nearly 70% chance of the first 25-bps rate cut for the year coming in September, according to CME Group’s FedWatch tool.
Eight of the 11 major S&P 500 sub-sectors fell, led by a 1.3% drop in real estate after data revealed a higher-than-expected fall in sales for new single-family homes.
On the flip side, the information technology sector gained 0.8%, with Nvidia rising about 2.4%.
Among other megacaps, Tesla shares fell 4.3% as its European sales slumped for the fifth month.
Shares of delivery giant FedEx fell 2.9% after the company forecast quarterly profit below estimates, while General Mills lost 3.3% after missing annual profit expectations.
Micron dipped 1.4% ahead of its quarterly results after the bell.
At 11:46 a.m. ET, the Dow Jones Industrial Average fell 108.42 points, or 0.25%, to 42,980.60, the S&P 500 lost 0.67 points, or 0.01%, to 6,091.51 and the Nasdaq Composite gained 45.70 points, or 0.23%, to 19,958.24.
The Commerce Department’s final take on first-quarter GDP is due on Thursday, while Friday’s Personal Consumption Expenditures (PCE) report will help investors ascertain the economic effects of Trump’s tariffs that have kept global markets on edge since the start of the year.
U.S.-listed shares of cybersecurity firm Blackberry jumped 14.5% after the company raised its annual revenue forecast.
Declining issues outnumbered advancers by a 2.15-to-1 ratio on the NYSE and by a 2.04-to-1 ratio on the Nasdaq.
The S&P 500 posted 20 new 52-week highs and 5 new lows while the Nasdaq Composite recorded 75 new highs and 48 new lows.
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