9:38 a.m. ET, March 8, 2023
Stocks open higher ahead of more testimony from Powell
From CNN’s Nicole Goodkind
New York Stock Exchange on March 7.
(Spencer Platt/Getty Images)
U.S. stocks opened slightly higher on Wednesday as investors scrambled for direction after comments Tuesday by Federal Reserve Chairman Jerome Powell about inflation rates and the state of the economy sparked a market selloff.
Powell sent markets lower and 2-year Treasury yields to 15-year highs on Tuesday as he opened the door to bigger rate hikes during testimony before the Senate Banking Committee.
Richmond Fed President Thomas Barkin added to the concern Wednesday morning. High inflation means the Federal Reserve still has more work to do, he said at an event in South Carolina.
Chairman Powell is expected to testify Wednesday at 10 ET before the House Financial Services Committee, potentially triggering a new wave of market volatility.
The bond market, meanwhile, is flashing a warning sign that generally predicts a coming recession: The yield on the two-year US Treasury moved higher than the 10-year by the most in more than 40 years. It is a signal that investors are more nervous about the immediate future than the longer term.
US-China tensions also continue to rage, worrying investors. China announced a major government overhaul aimed at boosting its technological confidence as a tech war with the United States intensifies.
The ADP employment report, meanwhile, highlighted a still resilient US labor market – 242,000 jobs were added in February. That’s much higher than estimates of 200,000 and more than double January’s revised 119,000 jobs added.
Investors await US jobs figures for January at 10 ET and public payroll numbers on Friday.
In corporate news, shares of Occidental Petroleum rose 3.3% after filings showed Warren Buffett’s Berkshire Hathaway bought more shares in the energy company this week. Shares of Stitch Fix, meanwhile, fell nearly 10% after the apparel company missed estimates for fourth-quarter earnings.
The Dow rose 36 points, or 0.1%, on Wednesday morning.
The S&P 500 grew by 0.1 per cent.
The Nasdaq Composite was 0.2% higher.
