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Wall Street flat as Fed makes inflation vow

2022-06-23 HKT 04:56
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  • A choppy session ended with modest losses for the main Wall Street indexes. File image: Shutterstock
    A choppy session ended with modest losses for the main Wall Street indexes. File image: Shutterstock
Wall Street's main indexes ended with slim losses on Wednesday after choppy trading as energy shares weighed and investors digested Federal Reserve Chair Jerome Powell's comments on the central bank's aim to bring down inflation.

After opening lower, major US indexes had erased losses following Powell's testimony before a Senate committee, but then they faded into the close.

Powell said the Fed is "strongly committed" to bringing down inflation that is running at a 40-year high while policymakers are not trying to cause a recession in the process.

Investors are trying to assess how far stocks could fall as they weigh risks to the economy with the Fed hiking rates to tamp down surging inflation. The S&P 500 earlier this month fell over 20 percent from its January all-time high, confirming the common definition of a bear market, with the benchmark index last week logging its biggest weekly percentage drop since March 2020.

“Markets continue to be volatile,” said King Lip, chief strategist at Baker Avenue Asset Management in San Francisco. "Certainly we are not out of the woods yet... The concerns are still there.”

The Dow Jones Industrial Average fell 0.15 percent, to 30,483, the S&P 500 lost 0.13 percent, to 3,760 and the Nasdaq Composite dropped 0.15 percent, to 11,053.

The energy sector, which has been a strong performer this year, fell 4.2 percent as oil prices slid. Declines in Exxon Mobil , Chevron and Conocophillips were the biggest individual drags on the S&P 500.

In company news, Moderna shares rose 4.7 percent after the company said an updated version of its Covid-19 vaccine generated a strong immune response against fast-spreading Omicron subvariants. (Reuters)