Stocks inched higher on Tuesday, despite hawkish comments from Fed Chairman Jerome Powell, sending Treasury bond yields to a record high for 2024. Powell’s remarks on combatting inflation and the potential for a higher-for-longer interest rate policy caused uncertainty in the markets.
The US stock market was mixed as investors digested Powell’s comments, which indicated little progress in reaching the 2% inflation goal. The central bank chief’s remarks led to a spike in long-dated Treasury yields, signaling a shift towards a more hawkish monetary policy stance.
Despite the uncertainty, strong corporate earnings helped prop up stocks throughout the day. Companies like Morgan Stanley and UnitedHealth saw significant gains, boosting the overall market sentiment.
While the Fed fund futures now point to a potential rate cut in September instead of June, investors are closely watching for further developments in monetary policy. The higher-for-longer narrative remains intact, according to experts, as Powell’s comments underscored the challenges in combatting inflation.
In commodities, bonds, and crypto markets, West Texas Intermediate crude oil and gold saw modest gains, while the 10-year Treasury yield climbed to 4.663%. Bitcoin, however, experienced a slight drop in value.
Overall, the markets continue to navigate the uncertainty surrounding inflation and interest rates, with investors closely monitoring the latest developments from the Federal Reserve.
