U.S. stock indexes were mostly lower Wednesday afternoon, following a slump on Tuesday after comments by Federal Reserve chairman Jerome Powell suggesting more interest rate rises may be necessary than investors were expecting. How are stock indexes trading
S&P 500
SPX,
-0.22%
dropped 5 points, or 0.1%, at 3,981 points
Dow Jones Industrial Average
DJIA,
-0.48%
fell 145 points, or 0.4%, to around 32,710
The Nasdaq Composite
COMP,
+0.00%
rose 15 points, or 0.1%, to 11,546
On Tuesday, the Dow Jones Industrial Average fell 575 points, or 1.72%, to 32,856, the S&P 500 declined 62 points, or 1.53%, to 3,986, and the Nasdaq Composite dropped 145 points, or 1.25%, to 11,530.
What’s driving markets Investors tuned in to the second day of Fed Chair Powell’s semiannual monetary policy testimony to Congress in which Powell said the central bank has not made any decision on the size of a potential interest rate hike later this month despite strong labor market data and a rise in inflation in January. Powell, in a testimony to the House Financial Services panel, said the central bank has yet to decide how large an interest rate hike to impose at its next meeting in two weeks. “We have not made any decision about the March meeting. We’re not going to do that until we see the additional data,” Powell said, while emphasizing that the Fed is not on a “pre-set path.” “We will be guided by the incoming data and the evolving outlook,” he said. On Tuesday, Powell told the Senate Banking Committee that the central bank was prepared to increase the pace of interest rate hikes if data indicated it was warranted to damp inflation. “The market has interpreted what he[Powell] said as being an indication that we may see higher rate hikes at the next meeting than we previously have expected, and that the terminal rate will be higher than what markets had priced in a month or so ago,” Richard Flax, chief investment officer at Moneyfarm, said before Powell’s testimony Wednesday. “You’ve seen the narrowing of the gap between market expectations and perhaps the Fed dot plot at the last release,” said Flax in a call. Powell’s comments on Tuesday hammered government bonds, driving short-term 2-year yields
TMUBMUSD02Y,
5.065%
to the highest level since 2007, as the market increased …