John Deo

S&P 500 Gains Slightly as Fed Signals No Urgency for Rate Cuts

  • click to rate
    Posted by John Deo Feb 12 - Filed in General - #financialmodelingprep  - 26 views

    The S&P 500 managed a modest gain on Tuesday, but broader market momentum remained muted following Federal Reserve Chairman Jerome Powell’s testimony, where he reiterated that the Fed isn’t in a hurry to cut interest rates.

    At 4:00 p.m. ET (21:00 GMT):

    • Dow Jones Industrial Average: +123 points (+0.3%)
    • S&P 500 Index: +0.1%
    • NASDAQ Composite: -0.4%

    Powell Reiterates No Urgency for Rate Cuts

    Speaking before the Senate Banking Committee, Powell stated that there is no immediate need to adjust monetary policy given that:

    1. Interest rates are already less restrictive than before.
    2. The economy remains strong, with robust growth and labor market resilience.

    "With our policy stance now significantly less restrictive than it had been and the economy remaining strong, we do not need to adjust our policy stance," Powell said.

    The statement aligns with previous Fed remarks, including those from January’s FOMC meeting, where the central bank opted to hold rates steady.

    Bond Yields Rise as Rate Cut Bets Diminish

    Following Powell’s testimony:

    • U.S. Treasury yields climbed, reflecting waning expectations for a rate cut in March.
    • The Fed Rate Monitor Tool (Investing.com) now suggests the Fed is likely to keep rates unchanged at its upcoming meeting.

    Upcoming Inflation Report & Powell’s Next Testimony

    Markets remain cautious ahead of:

    • Powell’s second round of testimony on Wednesday, where he is expected to face questions on President Donald Trump’s trade tariffs and their inflationary impact.
    • Upcoming Consumer Price Index (CPI) data, which is anticipated to show:
      • Cooling headline inflation, but
      • Persistent core inflation, which could delay rate cuts.

    Market Monitoring & Investment Insights

    For deeper market analysis, investors can leverage:

    Conclusion

    While the S&P 500 managed a small gain, tech-heavy NASDAQ lagged, reflecting investor caution as interest rate cut bets weakened. The market now looks ahead to inflation data and Powell’s continued testimony, which could set the tone for the Fed’s next move.