9:38 am ET, March 8, 2023
Stocks open higher ahead of Powell’s additional testimony
From CNN’s Nicole Goodkind
(Spencer Platt/Getty Images)
U.S. stocks rose slightly on Wednesday as investors scrambled for direction after Federal Reserve Chairman Jerome Powell’s comments on inflation rates and the state of the economy sparked a market selloff.
Powell undercut markets on Tuesday and sent the 2-year Treasury yield to a 15-year high as he opened the door to bigger rate hikes during testimony to the Senate Banking Committee.
Richmond Fed President Thomas Parkin added to the concerns Wednesday morning. High inflation means the Federal Reserve needs to do more work, he said at an event in South Carolina.
Chairman Powell is expected to testify before the House Financial Services Committee at 10 a.m. ET on Wednesday, sparking a new wave of market volatility.
Meanwhile, the bond market is flashing a warning sign that usually heralds an incoming recession: The two-year U.S. Treasury yield moved higher than the 10-year mark in more than 40 years. This is a signal that investors are more nervous about the immediate future than the long term.
Rising tensions between the US and China have worried investors. China announced a major government overhaul aimed at boosting its technological self-reliance as its technology war with the United States escalates.
The ADP employment report, meanwhile, highlighted a still-steady US labor market – with 242,000 jobs added in February. That was 200,000 and more than double the revised 119,000 jobs in January.
Investors await the U.S. jobs numbers for January at 10 a.m. ET and government payrolls numbers on Friday.
In corporate news, shares of Occidental Petroleum rose 3.3% after Warren Buffett’s Berkshire Hathaway filed this week to buy more shares of the energy company. Meanwhile, Stitch Fix shares fell nearly 10% after the apparel company missed estimates on fourth-quarter earnings.
The Dow It was up 36 points, or 0.1%, on Wednesday morning.
The S&P 500 increased by 0.1%.
The Nasdaq Composite was 0.2% higher.