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Stocks fall, yields up; Powell says inflation fight not over


By Caroline Valetkevitch

NEW YORK (Reuters) -Global stock indexes mostly fell and Treasury yields rose on Wednesday as Federal Reserve Chair Jerome Powell said the fight to lower inflation still has a “long way” to go.

Oil prices also rose on Powell’s hawkish message in testimony prepared for delivery to the House Financial Services Committee.

But markets were volatile as Powell made further comments.

After lifting rates by 5 percentage points since March 2022, the Fed this month took a breather to assess the effects of its actions. Investors broadly expect increases to resume at the Fed’s July meeting.

The Fed is “walking a tight rope between trying to tell people they are going to fight inflation as their No. 1 priority and yet not pushing the market so far as to create problems in the banking system and just a general feeling that things are in bad shape,” said Rick Meckler, partner of Cherry Lane Investments in New Vernon, New Jersey.

The Nasdaq led declines on Wall Street, and the S&P 500 technology was the worst-performing sector.

The Dow Jones Industrial Average rose 23.39 points, or 0.07%, to 34,077.26, the S&P 500 lost 14.92 points, or 0.34%, at 4,373.79 and the Nasdaq Composite dropped 152.93 points, or 1.12%, to 13,514.36.

The pan-European STOXX 600 index lost 0.47% and MSCI’s gauge of stocks across the globe shed 0.35%.

The U.S. dollar index initially rose following the release of Powell’s testimony, but was last down slightly.

The dollar index fell 0.156%, with the euro up 0.31% to $1.095.

Treasury yields rose on Powell’s hawkish tone. The yield on 10-year notes was up 4.8 basis points (bps) at 3.775%.

U.S. crude rose 2.06% to $72.66 per barrel and Brent was at $77.18, up 1.69% on the day.

(Additional reporting by Medha Singh, Lawrence White and Wayne ColeEditing by Jacqueline Wong, Lincoln Feast, Alex Richardson, David Goodman and Richard Chang)

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