By Liz Moyer
Investing.com -- U.S. stocks were falling Tuesday after Federal Reserve Chair Jerome Powell said the central bank is prepared to increase the pace of interest rate hikes if the data supports it.
At 11:46 ET (16:46 GMT), the Dow Jones Industrial Average was down 320 points or 0.9%, while the S&P 500 was down 0.9% and the NASDAQ Composite was down 0.6%.
Powell appeared in Congress this morning to outline the case for keeping interest rates higher for longer as the central bank battles inflation. He will also appear on Wednesday.
Hotter than expected economic data has encouraged Fed officials to talk up the possibility of more rate hikes to put the benchmark rate at a level that is higher than previous forecasts. Powell said Tuesday the ultimate level of rates is likely to be higher than previously anticipated.
The 2-year Treasury yield jumped to 4.97%.
The market expects the Fed will raise rates another quarter of a percentage point in March and May, and the rate to reach above 5.2% later in the summer.
Powell said last month that the "disinflationary process" had begun, but he has also emphasized that the Fed isn't done in its battle with inflation, as it wants to nudge it back toward a sustainable 2% target rate.
Some traders even think the Fed could raise rates by half a percentage point this month, with some Fed officials commenting in recent days about taking a more aggressive approach.
One big data point the Fed will consider heading into the March meeting is Friday's jobs report for February. Analysts expect the economy added 203,000 jobs last month after a blistering hot 517,000 added in January.
Meta Platforms, Inc. (NASDAQ:META) rose 0.7% after Bloomberg News reported the company will cut thousands of jobs as soon as this week.
Dick's Sporting Goods, Inc. (NYSE:DKS) rose 10.3% after the sports apparel and equipment retailer forecast annual earnings higher than estimates and more than doubled its dividend.