S&P 500 Climbs as Powell Gets Testimony Underway By Investing.com

By Yasin Ebrahim

Investing.com – The S&P 500 inched higher Tuesday, as Federal Reserve Chairman Jerome Powell kicked off his testimony before U.S. lawmakers that could provide further insight into whether policy could tighten sooner than expected.

The rose 0.57%, the gained 0.30%, or 101 points, and the 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,” 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 remaining below 1.5%.

Microsoft (NASDAQ:, Apple (NASDAQ:), Facebook (NASDAQ:) and Amazon.com (NASDAQ:) were higher, while Google-parent Alphabet (NASDAQ:) 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:) 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, briefly fell below the $30,000 for the first time in a year as the popular crypto continues to search for meaningful support following its slump from $60,000 earlier this year.