NEW YORK: Wall Street stocks traded slightly higher on Monday (March 6) ahead of key jobs data and congressional testimony by Federal Reserve Chairman Jerome Powell.
The Dow Jones Industrial Average rose 40.47 points (0.12%) to 33,431.44. The S&P 500 rose 2.78 points (0.07%) to 4,048.42. The Nasdaq Composite fell 13.27 points (0.11%) to 11,675.74.
Earlier in the session, the index appeared to have made a significant gain as the Nasdaq rose more than 1% and closed lower. The biggest boost came from iPhone maker Apple after Goldman Sachs began reporting with a ‘buy’ rating.
But stocks rallied as yields on 10-year and 2-year Treasuries rebounded from initial declines after data showed a weaker-than-expected decline in new orders for U.S. goods in January. I gave up on my previous ascent.
Rising bond yields tend to weigh on equity valuations, especially growth and technology stocks, as higher interest rates reduce the value of future cash flows.
The move will see Fed Chairman Powell testify before Congress over two days on Tuesday and Wednesday, where he will be pressed on the central bank’s efforts to combat inflation.
This provides a hint of what policymakers are thinking about the price pressures that influence market movements.
LBBW’s Karl Haeling said: “I really think they’re just dichotomy prior to Mr. Powell’s testimony.
But much of the key data that informs the Fed will come out after the hearings, including the government jobs report on Friday in February.
Edward Moya of trading platform Oanda said: “This week we will be listening to Federal Reserve Chairman Jerome Powell’s testimony before Congress to see if January’s employment numbers were anomalous. It’s going to be a moment of separation,” he said.
“The stock probably won’t be able to make any meaningful gains until Powell hears from us,” he added in the memo.
Sean Cruz, trading strategist at TD Ameritrade in Chicago, said a possible Fed rate hike is a major concern, with Monday’s data already dampening investor enthusiasm.
“The market retreat is because there is still a lot of work to be done on inflation,” Cruz said. “We are not seeing the type of slowdown in demand that we have to see. The whole point of the Federal Reserve rate hike is to slow the economy.” – AFP, Reuters