Stocks opened little changed as investors await Powell’s speech
Stocks were flat on Wednesday as Wall Street awaited Federal Reserve Chairman Jerome Powell’s economic speech this afternoon.
The S&P 500 was essentially little changed, with the benchmark looking to snap a three-day losing streak. The Dow Jones Industrial Average gained 11 points, also trading near a flat line. Nasdaq 100 futures rose 0.1%.
Traders were hit by two reports on Wednesday morning that caused volatility in stock futures. On the one hand, the jobs report signaled that the labor market may be cooling, raising hopes that the Federal Reserve will slow its aggressive rate hike campaign. On the other hand, an updated third-quarter gross domestic product reading was released and showed that the economy was stronger in the latest period than first realized.
Payroll processing firm ADP said Wednesday that private companies added only 127,000 positions for the month, well below the consensus estimate of 190,000 economists polled by Dow Jones.
However, the Bureau of Economic Analysis also said Wednesday that third-quarter GDP grew at an annualized 2.9 percent, according to its second estimate. That was revised higher from the first estimate of 2.6%.
Powell will deliver a speech at the Brookings Institution this afternoon that could provide additional insight into the central bank’s thinking on future interest rate hikes. The Fed will meet later this month and is widely expected to deliver a smaller 0.5 percentage point rate hike after four consecutive 0.75 percentage point hikes to tame high inflation. Any signal of a reversal of future rate hikes would likely send markets higher.
“This is a recession created by the Fed, so eventually when it turns around, the market should move higher pretty quickly,” Steve Grasso, CEO of Grasso Global, said on CNBC’s “Fast Money” in Tuesday.
Wall Street is coming out of a mixed session. The Nasdaq Composite fell 0.59% and the S&P 500 fell 0.16%, marking the third straight day of decline for each. The Dow Jones Industrial Average posted marginal gains, closing 3.07 points, or 0.01%, higher.
Stocks have been weighed down by China’s zero-Covid policy and have failed to fully recover from losses even as the country announced steps toward reopening, such as increasing vaccination rates for the elderly.
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