US stocks popped on Wednesday, with techs vaulting back from a steep sell-off as investors digested Federal Reserve Chair Jerome Powell’s stance that interest rate cuts are still likely this year.
The tech-heavy Nasdaq Composite (^IXIC) jumped nearly 0.6% after techs led a sharp slide in stocks more broadly on Tuesday. The S&P 500 (^GSPC) also added 0.5%, while the Dow Jones Industrial Average (^DJI) popped 0.2%, as both indexes came off losses of more than 1%.
Powell’s testimony to Congress later may provide a catalyst for stocks, which have logged two days of losses as a battering for “Magnificent Seven” stalwarts Apple (NASDAQ: AAPL) and Tesla (NASDAQ: TSLA) fueled bubble fears.
Investors will listen closely for any deviation by Powell from Fed policymakers’ much-repeated message that there’s no rush to cut interest rates. Powell told lawmakers that rate cuts are likely to be warranted “at some point” in 2024. Investors will look for more clarity on this issue as Powell fields questions from lawmakers over the next two days.
“If the economy evolves broadly as expected, it will likely be appropriate to begin dialing back policy restraint at some point this year,” Powell said to the House Financial Services Committee.
In individual stocks, New York Community Bank (NYCB) stock whipsawed to close up more than 7%. The stock initially tanked following a report that NYCB was on the hunt for investors willing to buy stock in the company. But shares rebounded after the bank announced a new CEO and a $1 billion infusion from a group that includes former Treasury Secretary Steven Mnuchin.
