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The S&P 500 fell 0.2%, the Dow Jones Industrial Average fell 0.4%, or 126 points, and the Nasdaq rose 0.1%.
Google (NASDAQ:GOOGL) led the climb in the big tech, rising more than 1% after Treasury yields dipped from the highs of the day even as Powell said there was more “restriction” ahead and hinted at the possibility of back-to -back rate hikes.
Pointing to a strong labor market that continues to fuel consumer spending, which makes up about two-thirds of economic growth, Powell said that monetary policy isn’t restrictive enough and said he wouldn’t rule out the possibility of hiking rates at consecutive meetings.
The remarks pushed bets on the July rate hike to about 82%, up from 74% a day earlier, according to Investing.com’s Fed Rate Monitor Tool.
The United States 2-Year Treasury yield, which is sensitive to Fed policy changes, and the 10-year Treasury yield initially jumped to session highs following the remarks but soon dropped to the lows of the day.
Semiconductor stocks, however, helped keep gains in check for tech, paced by a decline in NVIDIA Corporation (NASDAQ:NVDA) on worries about the impact of fresh U.S. curbs on AI chip exports to China.
The Biden Administration is reportedly mulling new restrictions on exports of artificial intelligence chips to China, the Wall Street Journal reported Wednesday.
Nvidia Chief Financial Officer Colette Kress downplayed the impact of potential further U.S. action on chip exports, saying the chipmaker expected no “immediate material impact.”
The dip in chips comes just ahead of Micron Technology Inc’s (NASDAQ:MU) quarterly results that are expected to be “relatively in-line” with Wall Street estimates, according to Wedbush, as cost cuts helped offset price hikes that likely weighed on demand during the quarter.
Energy stocks were the biggest gainers on the day, rising more than 1%, underpinned by a jump in oil prices after data showed the U.S. weekly crude stockpiles fell more than expected, easing concerns about the impact of slowing global growth on demand.
Pioneer Natural Resources Co (NYSE:PXD), Williams Companies Inc (NYSE:WMB) and ConocoPhillips (NYSE:COP) were among top moving energy stocks on the day.
Tesla (NASDAQ:TSLA) jumped more than 2% on optimism that the EV maker’s price cut in the country bolstered demand and pushed sales to record levels in the April to June quarter.
Tesla could sell 155,000 cars in China from April to June, up 13% from its record first quarter, according to estimates by China Merchants Bank International Securities analyst Shi Ji.
Cruise stocks were in rally mode as Carnival Corporation (NYSE:CCL) continued its ascent a day after reporting a narrower than expected loss and an upbeat outlook as the cruise company continued its recovery from the pandemic.
Royal Caribbean Cruises Ltd (NYSE:RCL) and Norwegian Cruise Line (NYSE:NCLH) were also sharply higher.
Elsewhere on the earnings front, General Mills (NYSE:GIS) fell more than 5% after the maker of cereal, pet food and Pillsbury dough reported quarterly results that missed on the top line.
