Stock market today: Wall Street slips again ahead of Powell testimony

NEW YORK –

Wall Street is retreating a bit more as a five-week rally loses momentum.

The S&P 500 was 0.4% lower in early trading Wednesday. It’s on pace for a third straight pullback after rallying last week to its highest level in more than a year.

The Dow fell 152 points, or 0.5%, and the Nasdaq composite was off 0.3%. The main event for the day is likely to be testimony on Capitol Hill from Federal Reserve Chair Jerome Powell.

The Fed has been a key focus for markets as it tries to get the worst inflation in generations under control.

THIS IS A BREAKING NEWS UPDATE. AP’s earlier story follows below.

U.S. markets are largely unmoved early Wednesday ahead of Federal Reserve Chair Jerome Powell’s appearance before Congress, where he’s expected to field questions about the central bank’s inflation-fighting interest rate policies.

Futures for the Dow Jones Industrial Average and S&P 500 each ticked down about 0.1% before the opening bell Wednesday. Oil prices are flat.

Markets are concerned the Fed will return to raising rates next month and may have to keep them higher for longer, which would pressure the economy and potentially bring on a recession.

Powell will testify before a committee in the House on Wednesday and another in the Senate on Thursday. Last week, the Fed opted to leave its benchmark lending rate alone, the first time in more than a year that it didn’t announce an increase. But it also warned it could raise rates twice more this year.

“Investors are turning cautious ahead of another hefty dose of Fedspeak amidst a relatively light data docket,” Stephen Innes of SPI Asset Management said in a commentary.

He added that “with central banks in the mood to dish out inflation pain these days, investors may need to see some positive inflation data convergence to narrow the wide disparity between the Federal Reserve and the market’s forward inflation expectations before breaking fresh higher ground on U.S. stocks.”

Markets have been buoyed by speculation that inflation is easing enough for the Fed to stop raising interest rates soon. A frenzy around artificial intelligence has also vaulted a select group of tech stocks to huge gains.

FedEx slipped more than 2% before the bell Wednesday after the package delivery giant beat fourth-quarter profit targets but issued guidance for fiscal 2024 that came in lower than Wall Street was hoping for. UPS followed it down, losing about 1%.

Elsewhere, the Bank of England will meet on interest-rate policy Thursday. Central banks around the world are heading in diverging directions as they battle inflation amid worries about a pressured global economy.

At midday in Europe, Germany’s DAX, the CAC 40 in Paris and Britain’s FTSE 100 were all down about 0.2%.

Wednesday in Asia, Tokyo’s Nikkei 225 advanced 0.3% to 33,575.14, while the Hang Seng in Hong Kong sank 2% to 19,218.35. The Shanghai Composite index gave up 1.3% to 3,197.90 and the Kospi in Seoul slipped 0.9% to 2,582.63.

In Australia, the S&P/ASX 200 shed 0.6% to 7,314.90. Bangkok’s SET lost 1.1%, while India’s Sensex was up 0.3%.

In other trading Wednesday, oil prices were off Tuesday’s close by a few pennies. U.S. benchmark crude oil was $71.21 per barrel in electronic trading on the New York Mercantile Exchange. It gave up 74 cents to $71.19 per barrel on Tuesday.

Brent crude, the international standard, was $75.88 per barrel.

The dollar rose to 141.76 Japanese yen from 141.43 yen. The euro was trading at $1.0924, up slightly from $1.0922.

On Tuesday, the U.S. stock market took a step back after rising on hopes the economy can avoid a recession. The S&P 500 fell 0.5%, while the Dow lost 0.7% and the Nasdaq composite gave back 0.2%.

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Kurtenbach reported from Bangkok; Ott reported from Silver Spring, Md.