After recovering from an early move to the downside, stocks fluctuated over the course of the trading session on Wednesday. The major averages bounced back and forth across the unchanged line before closing modestly lower.<\/p>\n
The major averages finished the session well off their early lows but still in negative territory. The Dow dipped 47.12 points or 0.2 percent to 30,483.13, the Nasdaq slipped 16.22 points or 0.2 percent to 11,053.08 and the S&P 500 edged down 4.90 points or 0.1 percent to 3,759.89.<\/p>\n
The choppy trading on Wall Street came as traders reacted to Federal Reserve Chair Jerome Powell’s testimony before the Senate Banking Committee.<\/p>\n
In prepared remarks, Powell indicated the Fed plans to continue moving expeditiously to combat inflation but argued the U.S. economy<\/span> is strong enough to handle tighter monetary policy.<\/p>\n However, Powell later acknowledged that achieving a “soft landing” will be “very challenging” due in part to factors outside of the Fed’s control and noted a recession is “certainly a possibility.”<\/p>\n “It’s not our intended outcome at all, but it’s certainly a possibility, and frankly the events of the last few months around the world have made it more difficult for us to achieve what we want, which is 2% inflation and still a strong labor market,” Powell said.<\/p>\n Powell said the pace of future interest rate hikes will be dependent on incoming data and the evolving outlook for the economy and suggested the Fed will need to see “compelling evidence” that inflation is slowing before it begins to scale back its monetary policy tightening plans.<\/p>\n “We will make our decisions meeting by meeting, and we will continue to communicate our thinking as clearly as possible,” Powell said. “Our overarching focus is using our tools to bring inflation back down to our 2 percent goal and to keep longer-term inflation expectations well anchored.”<\/p>\n The Fed Chief said the central bank will still strive to “avoid adding uncertainty in what is already an extraordinarily challenging and uncertain time.”<\/p>\n “Fading stock market bounces will still remain the go-to trade on Wall Street until the economic data dramatically weakens and the Fed pivots so that they may ease up their tightening of policy strategy,” said Edward Moya, senior market analyst at OANDA.<\/p>\n He added, “The Fed is starting to become a little more pessimistic as they are finally acknowledging it will be ‘very challenging’ to achieve a soft landing, but nowhere near enough for traders to expect a pivot over tightening anytime soon.”<\/p>\n Sector News<\/p>\n Energy stocks showed a substantial move to the downside on the day, moving sharply lower along with the price of crude oil. Crude for August delivery tumbled $3.33 to $106.19 a barrel amid concerns about the outlook for demand.<\/p>\n Reflecting the weakness in the energy sector, the Philadelphia Oil Service Index plummeted by 5.2 percent and the NYSE Arca Oil Index plunged by 4.5 percent.<\/p>\n Significant weakness also emerged among steel stocks, as reflected by the 3.9 percent nosedive by the NYSE Arca Steel Index. The index ended the session at its lowest closing level in over six months.<\/p>\n Tobacco, gold and computer hardware stocks also saw notable weakness, while considerable strength was visible among biotechnology, healthcare and pharmaceutical stocks. <\/p>\n Other Markets<\/p>\n