US stocks were higher on Wednesday as Federal Reserve Chair Jerome Powell reiterated the Fed will likely cut interest rates this year amid inflation’s “bumpy” path downward.
The S&P 500 (^GSPC) rose about 0.3%, while the Dow Jones Industrial Average (^DJI) popped about 0.1%. The tech-heavy Nasdaq Composite (^IXIC) led the gains, rising more than 0.4% after the major gauges closed Tuesday in a sea of red.
In a speech at Stanford University on Wednesday, Powell doubled down on his belief that inflation was on a “bumpy” path down to 2%, but that central bank officials expect to lower rates at “some point” this year.
Stocks had drifted away from their strong start to the year as robust economic data undermined hopes for three Fed rate cuts. Investors have scaled back their bets to the point where they expect a smaller, later easing than policymakers have projected.
Stocks reversed losses on Wednesday morning, though, after a reading on prices paid in the services sector hit its lowest level since March 2020, indicating potential future declines in inflation. This data stood in contrast to a similar reading from the manufacturing sector on Monday, which showed inflation pressures were on the rise last month.
Earlier in the day, Atlanta Fed President Raphael Bostic told CNBC he expects the Fed to make its first interest rate cut in the fourth quarter.
In corporate news, Disney (NYSE: DIS) successfully fended off activist investor Nelson Peltz in his quest to secure board seats at the company, officially ending a highly contested proxy battle that has plagued the entertainment giant and its CEO Bob Iger for months. After winning a shareholder vote to keep its board intact, Disney stock dipped more than 2%.
Elsewhere in single-stock moves, Intel (INTC) shares fell around 7% after the chip company posted sharper operating losses at its foundry business.
