Powell’s Testimony Boosts US Stocks, Tech Leads Rally

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US benchmark equity indexes saw a midday rise on Wednesday as Federal Reserve Chair Jerome Powell indicated a potential easing in inflationary pressures. The Nasdaq Composite climbed 1% to 18,608.2, the S&P 500 increased 0.7% to 5,614.8, and the Dow Jones Industrial Average went up 0.5% to 39,479.8. Leading the charge were the technology and materials sectors, while financials saw a slight decline.

Powell expressed tentative confidence in cooling inflation, as reported by Bloomberg News, during his testimony before the House Financial Services Committee. He emphasized, “The question is: Are we sufficiently confident that it is moving sustainably down to 2%? And I’m not prepared to say that yet.” He reiterated sentiments shared with the Senate Banking Committee on Tuesday, highlighting that recent inflation data showed “modest further progress,” and affirmed that “more good data” would reinforce the belief that inflation is on track to meet the 2% target.

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In the bond market, the US two-year yield rose one basis point to 4.63%, while the 10-year rate dipped by one basis point to 4.29%. Economic reports expected on Thursday could show a 0.1% increase in US consumer inflation month-over-month and an annual rise of 3.1% for June, based on a Bloomberg-compiled consensus. Additionally, official producer prices data for the previous month are set for release on Friday.

Meanwhile, mortgage applications in the US experienced a slight decline last week, dampened by recent increases in interest rates, according to the Mortgage Bankers Association. In the commodities market, West Texas Intermediate crude oil rose 0.8% to $82.08 per barrel intraday.

In corporate developments, CarMax (KMX) shares surged by 6%, making it the second-highest gainer on the S&P 500. Oppenheimer noted that moderating used car prices in the US present a positive outlook for top retailers in the sector, particularly CarMax. Conversely, Intuit (INTU) experienced one of the steepest drops on the S&P 500 and the Nasdaq, down 3%, after announcing a layoff of 1,800 employees and the closure of two locations. This restructuring aims to boost investments in artificial intelligence.

WD-40 (WDFC), PriceSmart (PSMT), and AZZ (AZZ) are among the companies scheduled to announce their latest financial results after the market closes on Wednesday. In the precious metals market, gold appreciated 0.4% to $2,377.30 per troy ounce, while silver saw a slight decline of 0.1% to $31.02 per ounce.