US stocks retreat for a third day on Powell’s testimony

Fed Chair Jerome Powell clarified the Fed’s stance by saying that the process of getting inflation back down to 2% has a long way to go.

The S&P 500 was lower Wednesday as investors took a breather from last week’s market rally, and weighed Federal Reserve Chair Jerome Powell’s latest comments on inflation.

The broad market index fell 0.13%. The Dow Jones Industrial Average was flat, while the Nasdaq Composite slid 0.65%, respectively. Some major tech stocks that enjoyed an extraordinary run because of enthusiasm around artificial intelligence pulled back.

Amazon shares dropped about 1% after the Federal Trade Commission on Wednesday sued the online retailer. The agency said Amazon fooled millions of shoppers into signing up for Prime, and then hindered their attempts to cancel.

Nvidia, which is up nearly 200% this year, slid 2%. Shares of Google-parent Alphabet and Netflix are each down by more than 2%.

Elsewhere, FedEx shares fell more than 2% after the shipping giant posted weaker-than-expected revenue for its most recent quarter. Winnebago shares slid 2% after the motorhome maker missed third-quarter revenue estimates.

Powell said Wednesday that more rate hikes are likely ahead as the central bank tries to combat inflation. Those comments come after the conclusion of last week’s meeting when the central bank held off from raising rates after 10 straight consecutive hikes. However, officials indicated there could be two more quarter-percentage point moves on the horizon this year.

“Nearly all FOMC participants expect that it will be appropriate to raise interest rates somewhat further by the end of the year,” Powell said in prepared remarks for the House Financial Services Committee.

Investors are coming off a second straight trading day of losses. On Tuesday, the Dow fell 245.25 points, or 0.72%. The S&P 500 slid 0.47%, and the Nasdaq Composite lost 0.16%. Stocks are taking a breather from the exuberance of the recent rally. Last week, the S&P 500 hit its highest level since April 2022 and posted its fifth consecutive positive week.