Market Averages Turn Lower After Powell Reiterates Need for Rate Hikes

Barry Adams
21 Jun, 2023
New York City

Stocks on Wall Street remained under pressure for the second day this week after Fed Chairman Powell sounded an alarm on inflation. 

In his prepared remarks for his testimony to be delivered to the House Financial Services Committee, Powell said that the latest rate pause is likely to be followed by rate hikes as inflation remains too high for the central bank's comfort.

"Nonetheless, inflation pressures continue to run high, and the process of getting inflation back down to 2 percent has a long way to go," Chairman Powell noted in his prepared remark for lawmakers. 

"Despite elevated inflation, longer-term inflation expectations appear to remain well anchored, as reflected in a broad range of surveys of households, businesses, and forecasters, as well as measures from financial markets," highlighted Powell while reviewing the current economic situation. 

Nearly all FOMC participants expect that "it will be appropriate to raise interest rates somewhat further by the end of the year."

Crude oil drifted lower to a 15-month low as demand growth following the ending of China's "zero Covid" remains uncertain and weaker-than-expected. 

 

U.S. Indexes & Yields 

The S&P 500 index futures decreased 0.4% to 4,373.83 and the Nasdaq Composite futures declined 0.4% to 13,619.85. 

The yield on 2-year Treasury notes increased to 4.72%, 10-year Treasury notes edged up to 3.75% and 30-year Treasury bonds edged up to 3.84%. 

Crude oil decreased $0.02 to $71.54 a barrel and natural gas prices decreased 1 cent to $2.45 a thermal unit. 

 

U.S. Stock Movers

FedEx Corp declined 3% to $224.01 after the parcel delivery company grounded additional planes because of lack of demand. 

FedEx reported weaker-than-expected quarterly revenue but adjusted earnings were ahead of market expectations. 

Rivian Automotive Inc increased 1.6% to $15.70 after the company announced that its customers will be able to charge vehicles made by the company using Tesla electric charging stations next year. 

Winnebago Industries, Inc declined 8.1% to $59.01 after the maker of RVs reported sales declined 38% in its latest quarter because of heavier discounting and macroeconomic headwinds. 

Cryptocurrencies linked stocks advanced after Bitcoin continued to scale higher. 

Coinbase Global increased 2.5% to $58.41, MicroStrategy advanced 3.3% to $323.31 and Riot Platforms Inc surged 4.4% to $11.79.