U.S. stocks were mixed Tuesday and the bond yield rally paused as lawmakers drew out more details from Federal Reserve Chairman
Jerome Powell
on how aggressively the central bank will combat inflation and interest rates.
Stocks had initially fallen as senators peppered Mr. Powell with questions as part of his reconfirmation hearing for a second term as Fed chair, but some indexes later recovered. The S&P 500 was recently up 0.2% after five straight daily declines. The Dow Jones Industrial Average lost 0.1, its fifth consecutive down day. The Nasdaq Composite rose 0.8%
Stocks have been volatile as the prospect of imminent and faster-than-expected interest-rate rises has convulsed financial markets this month. Wall Street’s attention appeared to fixate on Mr. Powell’s testimony for clues on the Fed’s plan to confront fast-moving inflation. So far, Mr. Powell has reiterated the central bank’s intent to move as aggressively as needed to cool inflation, adding that “it’s a long road to normal” for monetary policy.
“There is more of a risk now that rate rises are going to coincide with falling growth, and that is obviously a bad combination,” said
Altaf Kassam,
head of investment strategy for State Street Global Advisors in Europe.
On Tuesday, nearly every corner of the stock market was down early in the session. By late morning, six of the S&P 500’s 11 sectors were up. Energy, up 1.5%, led the advancers as oil prices moved higher.
Stocks making big individual moves included
which added 8% after posting earnings late Monday that beat analysts’ expectations. Shares of
added nearly 3%, recouping some of the more-than-5% drop Monday when The Wall Street Journal reported that the electric-truck maker’s chief operating officer had departed.
fell over 6%, despite the grocery chain reporting higher quarterly sales.
Shares of
added 0.7%, helping to alleviate some of the pressure on the Nasdaq Composite. Some meme stocks also were slightly higher, including
which added 2.5%.
A rally in government bond yields halted, a day after the 10-year Treasury yield settled at a 52-week high. The yield on the benchmark bond edged down to 1.761% Tuesday from 1.779% Monday.
Investors are gearing up for earnings season this week.
Photo:
Courtney Crow/Associated Press
Investors also are gearing up for the start of earnings season this week. The reports will be particularly important for technology firms which will need to post strong growth to justify their valuations, said Mr. Kassam.
Results more broadly will need to be robust to support U.S. stocks, which are increasingly looking less attractive than their European counterparts, he added. “For the U.S. to keep its top-of-the-world stance it needs across the board earnings to come in strong.”
Reports later in the week will be dominated by financial firms, with
and
set to report Friday.
Overseas, the Stoxx Europe 600 rose 0.8%, led by gains for its tech sector.
fell 1.5% and
declined nearly 5% after the Journal reported that Cerberus Capital Management was selling more than 20 million shares of each company.
In Asia, stock markets were mostly lower. Japan’s Nikkei 225 fell 0.9%, while Hong Kong’s Hang Seng Index was flat. In mainland China, the Shanghai Composite Index dropped 0.7%.
Write to Will Horner at william.horner@wsj.com and Michael Wursthorn at michael.wursthorn@wsj.com
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