NEW YORK (AP) — Stocks wobbled in morning trading on Wall Street Tuesday as Federal Reserve Chair Jerome Powell testifies before the Senate Banking Committee.
The S&P 500 was up 0.2%. The Nasdaq composite was up 0.4%, and the Dow Jones Industrial Average slipped 112 points, or 0.3% as of 10:42 a.m. Eastern.
Consumer goods company Helen of Troy, which makes Osprey and OXO products, sank 30% after posting first-quarter results that fell far short of forecasts.
Chipmaker Intel rose another 3.5% following Monday’s 6.2% gain as bullish analysts suggest the company’s next processors will be in high demand for AI-related products.
Treasury yields rose slightly in the bond market. The yield on the 10-year Treasury note edged up to 4.31% from 4.28% late Monday.
Powell’s testimony this week comes ahead of the latest inflation updates on Thursday and Friday. The central bank is holding its benchmark interest rate at its highest level in more than two decades as it waits cautiously for more signals that inflation is still cooling.
Prices have eased sharply over the last two years as the Fed raised interest rates. It’s goal is to cool inflation back to its target of 2% without slowing economic growth too much.
Powell’s testimony on Tuesday will be followed up with testimony on Wednesday before the House Financial Services Committee.
Wall Street expects the latest government report on Thursday to show consumer prices eased to 3.1% in June from 3.3% in May. A report for inflation at the wholesale level, before costs are passed on to consumers, is expected Friday.
The Fed has remained cautious about making a move on interest rates until it is sure that inflation remains on a cooler path. Most measures of inflation show that it is easing, though at a much slower pace throughout 2024. The rate is hovering around 3% and continues exerting pressure on consumers, especially those with lower incomes.
A strong jobs market and consumer spending have been supporting economic growth, though the pace has slowed. Consumer spending has also been weakening as inflation prompts shifts in priorities for many to necessities over discretionary items. Borrowing costs are also higher because of elevated interest rates, adding more pressure on consumers.
Wall Street is hoping for rate cuts this year that could alleviate some pressure on both consumers and investors. Most experts are expecting one rate cut from the Fed this year, but not until September. The Fed holds its next policy meeting later this month.
Traders are also looking ahead to several earnings reports this week. Delta Air Lines will report its results on Thursday.
JPMorgan, Citigroup and Wells Fargo will report results on Friday. Those updates could provide more insight into consumer debt levels and whether banks are worried about payments and potential delinquencies.
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