Wall Street rebounds to end about flat after Jerome Powell assurances

wall street rebounds to end about flat after jerome powell assurances

NEW YORK: US stocks bounced back after sharp early losses, to end Tuesday’s session largely stable following Federal Reserve Chair Jerome Powell pledging to keep interest rates low until inflation rises consistently.

The benchmark Dow Jones Industrial Average dropped nearly 350 points in early trading, but recovered to close with a scant gain of less than 16 points at 31,537.35, while the broad-based S&P 500 edged up 0.1 percent to finish at 3,881.37.

But the tech-rich Nasdaq Composite Index fell another 0.5 percent to 13,465.2.

Markets have become jittery about the prospects that the pandemic recovery — fueled by the $1.9 trillion economic stimulus package making its way through Congress — will ignite inflation leading to rising lending rates.

Investors have pushed yields on 10-year Treasury notes higher — a key red flag for rising prices and interest rates.

Art Hogan of National Securities said it was the speed of the increase in yields that surprised markets.

“It feels like there was a tipping point at which that became a concern for growth stocks. And the market reacted to that,” he told AFP.

But he said rising yields are a signal the economy is poised to rebound, and “faster economic growth is likely to drive better earnings…

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