Fed Chair Powell’s Remarks Boost Dow, S&P; Nasdaq Stable

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US benchmark equity indexes saw a mostly positive trajectory intraday following comments from Federal Reserve Chair Jerome Powell suggesting recent improvements in inflation. By midday Tuesday, the Dow Jones Industrial Average and the S&P 500 each saw a 0.1% increase, reaching 39,398.2 and 5,580.6, respectively, while the Nasdaq Composite remained largely unchanged at 18,407.7. Financials were the standout performers among sectors, with materials experiencing the most significant decline.

In his prepared remarks to the Senate Committee on Banking, Housing, and Urban Affairs, Powell noted, “More good [inflation] data would strengthen the case for potential monetary policy easing in the US.” He emphasized, “The [Federal Open Market Committee] has stated that we do not expect it will be appropriate to reduce the target range for the federal funds rate until we have gained greater confidence that inflation is moving sustainably toward 2%.” While first-quarter data did not provide “such greater confidence,” Powell acknowledged that recent figures have shown modest further progress.

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In efforts to curb inflation, the FOMC raised its benchmark lending rate by 525 basis points from March 2022 to July 2023. Since then, interest rates have been held steady, with the latest pause occurring last month. Powell is slated to appear before the House Financial Services Committee on Wednesday.

The US 10-year yield rose by 3.4 basis points to 4.30% intraday, while the two-year rate saw a gain of 1.2 basis points, reaching 4.63%.

In other economic developments, small business optimism in the US climbed to its highest level of the year in June, although inflation continued to be the primary concern for business owners, according to the latest survey by the National Federation of Independent Business.

West Texas Intermediate crude oil fell 0.7%, trading at $81.76 per barrel intraday.

On the corporate front, Corning (GLW) surged 4.6%, becoming the top gainer on the S&P 500. This follows the company’s announcement on Monday raising its guidance for second-quarter core sales and foreseeing core earnings per share at the upper end of, or slightly exceeding, the range of $0.42 to $0.46.

Conversely, Albemarle (ALB) faced the sharpest decline on the S&P 500, tumbling 7.4% as UBS, Oppenheimer, and Baird reduced their respective price targets for the stock.

Helen of Troy (HELE) experienced a nearly 27% plunge in its share value after the consumer products company downgraded its full-year outlook due to lower-than-expected fiscal first-quarter results amid weak consumer demand.

Precious metals saw a slight uptick, with gold increasing 0.2% to $2,369 per troy ounce and silver rising 0.5% to $31.08 per ounce.