In anticipation of Federal Reserve Chairman Jerome Powell’s address in Washington on the future of interest rates, the Dow Jones Industrial Average dropped on Tuesday.
The 30-stock index dropped 101 points, or 0.3%, in value. The Nasdaq Composite Index rose 0.2% while the S&P 500 fell by 0.1%.
Investors are still focused on Powell’s speech slated for Tuesday afternoon at the Economic Club of Washington. Traders anticipate that Powell will use his speech to explain where rates are going and for how long, as well as to elaborate on statements that were perceived as dovish following last week’s quarter-point increase in the fed funds rate.
Investors are Powell-comment-reliant, according to Sam Stovall, chief investment strategist at CFRA Research, “just as the Fed is dependent on data.” “I believe that people will pay closely to his speech to the Economic Club of Washington today to see if he offers anything fresh.”
Following the Fed’s decision last week, markets read Powell’s press conference as a sign that the institution believes it is successfully driving down inflation, which sparked an uptick in stocks.
On CNBC early on Tuesday, Minneapolis Fed President Neel Kashkari disputed that view, arguing that the central bank has not reduced inflation to the point where it can “declare triumph.”
“We need to get to work. We are aware that increasing interest rates can control inflation, Kashkari said on CNBC’s “Squawk Box.” “We need to quickly hike rates to put an upper limit on inflation, then we should wait for monetary policy to take effect throughout the economy.”
Tuesday’s earnings season was intense, with reports from businesses like Chipotle due after the bell. Approximately 69% of S&P 500 businesses have reported profits so far this season, beating forecasts in approximately half of those cases, according to data from FactSet.
Due to profits that exceeded Wall Street estimates, Hertz and DuPont saw gains of 7% and 5%, respectively. King Caribbean
increased more than 4% after reporting a lower-than-anticipated loss per share, according to projections from analysts surveyed by Refinitiv. After releasing their profits post-market on Monday, Pinterest and Chegg declined.