U.S. stocks dipped for a second day as investors locked in profits and weighed Fed Chair Powell’s cautious tone on stretched valuations. Analysts expect two more rate cuts this year amid signs of a cooling labor market.
00:00U.S. stocks close lower for a second trade session on Wednesday as investors book profits with indexes near record levels after Federal Reserve Chair Jerome Powell flag potentially stretch stock prices and ahead of a reading on inflation later in the week.
00:16Investors are trying to gauge the trajectory of rate cuts from the central bank as it attempts to buttress an economy that has shown signs of a flagging labour market without stocking inflation.
00:30The Fed chair emphasised the tightrope the central bank must walk in upcoming policy decisions.
00:35The S&P 500 lost 0.28% to end at 6,637.97 points, while the Nasdaq Composite lost 0.34% to 22,497.86.
00:49And the Dow Jones Industrial Average fell 171.5 points or 0.37% to 46,121.28.
00:59Broad market stock investors are seeing slight declines on the day, largely fueled by profit-taking and some concerns about global politics, but not enough to move things of any real appreciable measure.
01:15In general, the market is still relatively calm, as noticed by relatively low VIX, and the fact that no matter what seems to happen week on week, month on month, equity still seem to want to go up.
01:29I think the Fed will have two more cuts this year, as they well predict.
01:34At this point, when things are uncertain, when dispersion is high, sticking to narrative becomes far more critical for the chair.
01:41Jay Powell is looking to execute a perfect landing.
01:44We talk about hard, soft, or otherwise, but let's just say a landing of some sort is ideally as perfect as he can.
01:49And the best way to do that is to leave either the board entirely or certainly the chairmanship mid-next year with inflation on a good path and the Fed with some credibility restored.
02:01Being able to execute the plan that he says the Fed is taking is critical to maintaining that credibility.
02:07And I think that's where he's going to push above all to get to.
02:09I think that's where he's going to push above all the way.
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