US stocks edge higher after renewed remarks on rate cuts

As Fed Chair Jerome Powell reaffirmed that the Fed will probably lower interest rates this year due to inflation’s “bumpy” downward trajectory, US markets saw minimal movement on Wednesday.

While the Dow Jones Industrial Average decreased by around the same amount, the S&P 500 increased by roughly 0.1%. The major indices reversed early-week performances that left stocks in a sea of red, and the tech-heavy Nasdaq Composite increased by more than 0.2%.

Powell reiterated his view that inflation is on a “bumpy” path that would eventually drop to 2% in a speech on Wednesday at Stanford University. However, he also stated that central bank officials anticipate lowering rates at “some point” this year.

As expectations for three Fed rate cuts were dashed by strong economic data, stocks had strayed from their stellar start to the year. Because of their reduced wagers, investors now anticipate a smaller, later easing than what authorities have predicted.

However, on Wednesday morning, stocks recovered some of their losses as a report on prices paid in the services sector fell to its lowest point since March 2020, suggesting that inflation may continue to decline in the future. This information contrasted with a comparable manufacturing sector report that was released on Monday and indicated rising inflation pressures over the previous month.