Benchmark US indices closed higher on Wednesday, July 14, after Fed chief Jerome Powell reiterated at a Congressional hearing that inflation is transitory and the economic recovery is on the right path.
The S&P 500 was up 0.12% to 4,374.30. The Dow Jones rose 0.13% to 34,933.23. The NASDAQ Composite fell 0.22% to 14,644.95, and the small-cap Russell 2000 was down 1.63% to 2,202.36.
Mr Powell said that inflation will remain high for most of the year but would eventually come down. His comments lifted the spirit of the investors as they saw a silver lining in the clouds after the comments. The Fed chief reiterated that inflation would return to the central bank's 2% range.
He stressed that the current pace of the US economic recovery had not met the Fed's expectations yet. Once that improves, the bank may consider tapering its monetary stimulus support.
Utility and real estate stocks were the top movers on the S&P 500. Five of the 11 major segments of the blue-chip index remained in positive territory. The energy stocks were the bottom movers.
In other major development, Senate Democrats unveiled a US$3.5 trillion spending plan to improve healthcare and fight poverty. Senate leader Chuck Schumer said that the latest amount would be in addition to the provisions under the US$579 billion infrastructure plan announced earlier.
Democrats are expected to advance the bill through the reconciliation process.
In corporate news, Bank of America Corp, Citigroup Inc., and Wells Fargo released their second-quarter earnings reports on Wednesday. Their robust second-quarter results beat analyst's expectations. However, shares of Bank of America Corporation (BAC) were down 3.41%, Citigroup Inc. (C) dropped 1.12%, but Wells Fargo & Company (WFC) rose 3.59%.
Investment management firm BlackRock Inc. (BLK) said that its revenues climbed 32% to US$4.8 billion, and net income rose 14% to US$1.38 billion. However, the stock ticked down 2.86% after its CEO Larry Fink rejected Mr Powell's assertion and said inflation would exceed 2% annually in the next five years. He also said that government policies would increase inflationary pressures.
Social media giant Facebook Inc. said it would spend more than US$1 billion by 2022 to support content creators to compete with other social platforms like TikTok and YouTube. In addition, it said the content creators would be paid through its bonus program for milestone achievers. Despite the positive news, Facebook, Inc. (FB) shares were down 0.98% from the previous close.
Apple Inc. (AAPL) increased by 2.50%, Microsoft Corp (MSFT) rose 0.72%, and ASML Holdings N.V (ASML) gained 1.84%. NVIDIA Corp (NVDA) fell 1.46%, and Oracle Corp (ORCL) advanced 1.67%. Overall, the technology sector saw gains in Wednesday's session.
In the utility sector, NextEra Energy, Inc. (NEE) rose 1.52%, Duke Energy Corp (DUK) increased by 1.25%, and The Southern Company (SO) rose 1.04%. Dominion Energy, Inc. (D) and Exelon Corporation (EXC) advanced 1.12% and 1.00%, respectively.
Exxon Mobil Corporation dropped 1.95%, Chevron Corp (CVX) fell 1.58%, and PetroChina Company Limited (PTR) plunged 3.15%. BP plc (BP) and ConocoPhillips ticked down 1.08% and 2.54%.
In the cryptocurrency world, Coinbase Global, Inc. (COIN) declined 4.19%, while Bitcoin (BTC) and Ethereum (ETH) gained 0.31% and 1.20%, respectively.
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Top performers on S&P 500 included Wells Fargo & Co (3.98%), Perrigo Company PLC (3.11%), American Airlines Group Inc (3.00%), Newell Brands Inc (2.42%). On NASDAQ, top performers were SGOCO Group Ltd (37.64%), Datasea Inc (35.84%), Bon Natural Life Ltd (33.60%), Virpax Pharmaceuticals Inc (30.62%). On Dow Jones, Apple Inc (2.41%), Coca-Cola Co (2.25%), Honeywell International Inc (1.65%), 3M Co (1.62%) were the leaders.
Top laggards on S&P 500 included Occidental Petroleum Corp (-7.48%), Enphase Energy Inc (-7.21%), Diamondback Energy Inc (-6.06%), Devon Energy Corp (-5.76%). On NASDAQ, Allena Pharmaceuticals Inc (-35.04%), Allied Healthcare Products Inc (-31.13%), Antelope Enterprise Holdings Ltd (-25.75%), Auddia Inc (-23.75%). On Dow Jones, Chevron Corp (-1.89%), Caterpillar Inc (-1.65%), Boeing Co (-1.64%), Walgreens Boots Alliance Inc (-0.93%) were the laggards.
Top volume movers were Apple Inc (22.70M), Bank of America Corp (19.66M), Wells Fargo & Co (11.95M), American Airlines Group Inc (10.39M), General Electric Co (8.13M), Microsoft Corp (7.87M), Citigroup Inc (7.39M), Intel Corp (7.10M), Exela Technologies Inc (31.29M), SGOCO Group Ltd (21.31M), Datasea Inc (12.86M), Sundial Growers Inc (9.99M), US Energy Corp (8.89M), Verb Technology Company Inc (8.64M).
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Futures & Commodities
Gold futures were up 1.03% to US$1,828.60 per ounce. Silver increased 0.75% to US$26.335 per ounce, while copper fell 0.92% to US$4.2672.
Brent oil decreased 0.01% to US$74.59 per barrel and WTI crude was down 3.07% to US$72.94.
The 30-year Treasury bond yields was down 3.11% to 1.974, while the 10-year bond yields decreased 4.65% to 1.349.
US Dollar Futures Index decreased 0.42% to US$92.365.