U.S. stock index were little changed near records on Wednesday after Federal Reserve Chairman Jerome Powell said the central bank is not close to altering its easy monetary policies.
The Dow Jones Industrial Average dipped around 10 points. The S&P 500 traded roughly 0.1% higher after hitting a high earlier in the session. The Nasdaq Composite traded near the flatline, while Apple shares hit an all-time.
“The markets have gotten very accustomed to ‘low rates for longer,”” Diane Swonk, chief economist at Grant Thornton, said. “The reality is the Fed has to deal with whatever comes in.”
Powell said in his semiannual testimony before Congress Wednesday that the central bank can wait before it starts to ease its bond purchases despite surging inflation readings. Powell said he still expects inflation to moderate.
“At our June meeting, the Committee discussed the economy’s progress toward our goals since we adopted our asset purchase guidance last December. While reaching the standard of ‘substantial further progress’ is still a ways off, participants expect that progress will continue,” Powell said.
The central bank chief is speaking before the House Committee on Financial Services. He is scheduled to testify before the Senate on Thursday.
The yield on the, continuing its decline in recent months. Yields fell even as a reading on showed higher than expected inflation. This follows the biggest jump in the consumer price index since 2008,
Apple shares jumped around 2% after the companyof its next-generation iPhones by 20%. and raised its price target on the stock to imply 20% potential upside.
Second-quarter earnings reports from big banks and other major companies continued on Wednesday. As investors focus on Fed headlines and inflation readings, earnings so far this week have not led to major stock moves despite better-than-expected results.
All 12 of the S&P 500 companies that have posted quarterly fiscal results this week have beat earnings-per-share estimates, but the group is averaging a 0.56% decline after reporting.
Bank of America shares fell aftersecond-quarter revenue of $21.6 billion, just under the $21.8 billion estimate from Refinitiv. Low interest rates knocked net interest income by 6%, the bank said.
Meanwhile, American Airlines shares jumped after theand a narrower loss than its previous estimate for the second quarter. The company is set to report quarterly fiscal results on July 22.
The S&P 500 is up more than 16% in 2021 and more than 37% in the past 12 months, signaling good news might be priced into shares. S&P 500 profit growth is expected to total 64% year-over-year for the quarter, according to analyst estimates collected by FactSet.
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