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S&P 500 Climbs as Powell Gets Testimony Underway

Stock MarketsJun 22, 2021 03:15PM ET
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© Reuters.

By Yasin Ebrahim

Investing.com – The S&P 500 inched higher as Federal Reserve Chairman Jerome Powell in testimony before Congress Tuesday, largely stuck to script, shrugging off the factors boosting inflation as temporary, and talking up the prospect of jobs gains ahead. 

The S&P 500 rose 0.57%, the Dow Jones Industrial Average gained 0.30%, or 101 points, and the Nasdaq Composite was up 0.68%.

Powell largely stuck to his prepared remarks in testimony before a House select subcommittee hearing on the Fed’s pandemic response and the economy, reiterating the rapid pace of inflation will fade, and job gains will pick up in the coming months.

“[P]erhaps all of the overshoot in inflation comes from categories such as rising used car and trucks, airplane tickets, hotel prices that have been affected by the reopening of the economy," Powell said, in response to questioning from lawmakers on whether inflation is transitory. These factors "will ultimately start to decline."

“[W]hile these effects have turned out to be larger than we expected, the incoming data are consistent with the view that these factors will wane over time,” he added.

Ahead of the speech, differing remarks from several Fed members – who lean dovish or hawkish – on how soon to rein in easy monetary policy measures have raised concerns over a possible growing divide among Fed members.

St. Louis Fed President James Bullard and Dallas Fed president Robert Kaplan signaled that tapering could come sooner rather than later. Meanwhile New York Fed President John Williams called for support to remain in place as the economy is still a ways off from achieving the Fed's goals.

Sentiment on the broader market remains tentatively positive following Monday's rally, with consumer discretionary stocks, materials and technology leading to the upside.

Technology stocks continued to ride the weakness in bond yields, with the United States 10-Year remaining below 1.5%.

Microsoft (NASDAQ:MSFT, Apple (NASDAQ:AAPL), Facebook (NASDAQ:FB) and Amazon.com (NASDAQ:AMZN) were higher, while Google-parent Alphabet (NASDAQ:GOOGL) was flat.

Alphabet came under the spotlight after the EU launched a formal antitrust investigation into the company's core digital ad business. 

As well as falling yields, the broader tech sector was helped by a boost from semiconductor stocks, led by Nvidia.

Nvidia (NASDAQ:NVDA) was up 2% after the chipmaker made further efforts to deter cryptocurrency miners from purchasing its chips to avoid the boom and bust demand cycle seen a few years ago when a sharp turn lower in cryptocurrency mining activity resulted in a chip supply overhang.

Some on Wall Street sees further gains for tech ahead, with quarterly results on the horizon.

"Overall we remain very bullish on tech stocks for 2H as robust June results and guidance around the corner will be another positive catalyst for the tech sector in our opinion," Wedbush said.

In cryptocurrency news, Bitcoin briefly fell below the $30,000 since January as the popular crypto continues to search for meaningful support following its slump from $60,000 earlier this year.

S&P 500 Climbs as Powell Gets Testimony Underway
 

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Comments (12)
Joel Schwartz
Joel Schwartz Jun 23, 2021 1:45AM ET
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Powell lied about inflation under oath today.
Josh Modern
JoshModern Jun 22, 2021 3:49PM ET
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there's some truth in what's on that man's hat lmao
JAMES CUNHA
JAMES CUNHA Jun 22, 2021 3:42PM ET
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"Equitable recovery?" Tech billionaires just added a few additional billions to their net worth compliments of the Fed's policies.
Meru Pet
Meru Pet Jun 22, 2021 3:42PM ET
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how many funds are investing money in the stock market to provide revenues to not necessary rich people ?
Jouni Matero
Jouni Matero Jun 22, 2021 3:37PM ET
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Billionaires gain more profits, well done with manipulation.
Meru Pet
Meru Pet Jun 22, 2021 3:37PM ET
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if you see the manipulation why don't you take profit of it ? Oh wait, i bet you are seeing the manipulation afterwards...
Mitchel Pioneer
Mitchel Pioneer Jun 22, 2021 3:29PM ET
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The "late trade" fraud rolls out, as the US Ponzi Scheme shoves another financial knife into the back of America.  Criminally manipulated joke.
Me comment
Me comment Jun 22, 2021 3:23PM ET
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The markets just a play controlled by speculative analysts who are backed by the nano-second computer buying and selling on their speculation.
Lewis Hughes
Lewis Hughes Jun 22, 2021 3:04PM ET
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Inflation skyrocketing, cost of goods/services skyrocketing, cost of living skyrocketing, cost of homeownership skyrocketing, home sales down, debt up, media/corporate collusion with government, censorship of political dissidents, federal election interference of state elections...welcome to socialism.
Mart Zee
Mart Zee Jun 22, 2021 3:04PM ET
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That's nothing unusual. After every recession, there is a spike of inflation as well as GDP. Look at 2008-2009. We had a spike of inflation too. And people were predicting gloom and doom for the last 12 years.
Amine Fourali
Amine Fourali Jun 22, 2021 3:04PM ET
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Mart Zee I thought this time is different…lol
Jon Bal
Jon Bal Jun 22, 2021 3:04PM ET
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i remember my $600 stimulus check from G Dubya. i think i drank it
Stan Smith
Stan Smith Jun 22, 2021 2:36PM ET
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Bulls cheer to infinity...:P
Meru Pet
Meru Pet Jun 22, 2021 2:17PM ET
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jerome: "happy holidays, take some rest outside, see you in September, cheers"
Viorica Nan
Viorica Nan Jun 22, 2021 2:07PM ET
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Nu de mincare te rog frumos
Solomon Lalani
Solomon Jun 22, 2021 1:49PM ET
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16243841088752.jpg
Inch by inch, it has gone a million miles higher; and will keep going.  Any other expectation is futile!
Alexander Stinson
Alexander Stinson Jun 22, 2021 1:48PM ET
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s&p will collapse soon
Meru Pet
Meru Pet Jun 22, 2021 1:48PM ET
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specify the unit of "soon"
 
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