Stocks mostly slide, yields ease after Powell’s inflation comments

Stocks mostly slide, yields ease after Powell's inflation comments
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  • S&P 500 slightly down early
  • Powell: The Fed is “running” on cutting inflation
  • US dollar higher

NEW YORK, June 29 (Reuters) – Shares in global indexes were mostly down on Wednesday and Treasury yields eased as investors weighed comments from Federal Reserve Chair Jerome Powell who said it stands the risk that Fed rate hikes will slow down the economy too much, but the bigger risk is continued inflation.

Following Powell’s comments at a European Central Bank conference, the US dollar index was higher and the MSCI global stock index was lower. Continue reading

“The clock is ticking how long you will stay in a low-inflation regime. … The risk is that because of the multitude of shocks, you start moving into a regime of higher inflation, and our job is to literally prevent that from happening, and we will prevent that from happening,” Powell said.

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Investors have feared that an aggressive move by the Fed to curb inflation could plunge the economy into recession.

Stan Shipley, a fixed income strategist at Evercore ISI, said markets will remain choppy as investors and traders read economic data what they want to see.

“We’re getting slower economic data, some sectors seem to be in recession, other sectors seem to be in pretty good shape,” Shipley said.

The 10-year Treasury note yield fell 4.9 basis points to 3.158%, while the 2-year yield rose 0.2 basis points to 3.126%.

The Dow Jones Industrial Average (.DJI) rose 96.69 points, or 0.31%, to 31,043.68, the S&P 500 (.SPX) lost 1.61 points, or 0.04%, to 3,819.94 and the Nasdaq Composite (.IXIC) fell 13.17 points, or 0.12%, to 11,168.37.

The pan-European STOXX 600 index (.STOXX) lost 0.69% and MSCI’s benchmark for stocks around the world (.MIWD00000PUS) 0.52% lost.

In forex, the dollar index rose 0.373% while the euro fell 0.39% to $1.0477.

Inflation fears are fueled further by oil prices, which extended their rise to a fourth day. Tight supply concerns offset concerns about a weaker global economy. Continue reading

The group of OPEC+ crude oil exporters started a two-day meeting on Wednesday, but major policy changes are unlikely as UAE Energy Minister Suhail al-Mazrouei is already suggesting his country is pumping near capacity. Continue reading

US crude was recently up 0.89% to $112.76 a barrel and Brent was at $119.19, up 1.03% on the day.

Spot gold fell 0.2% to $1,815.79 an ounce.

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Reporting by Caroline Valetkevitch; additional reporting from Sujata Rao in London and Herbert Lash in New York; Edited by Nick Macfie, Will Dunham and Alex Richardson

Our standards: The Thomson Reuters Trust Principles.

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