Stocks were mixed on Wednesday after two stronger-than-expected jobs reports stoke fears for higher-for-longer interest rates following comments from Federal Reserve Chair Jerome Powell. The Dow Jones Industrial Average fell nearly 60 points, recovering from session declines of over 200 points, while the S&P 500 Index and Nasdaq Composite gained 0.14% and 0.4%, respectively.
Here's how the market settled on Wednesday:
S&P 500 Index
Dow Jones Industrial Average
Nasdaq Composite Index
In the spotlight on Wednesday, two new job prints further fueled investor fears over the Fed's next moves. ADP's monthly jobs report showed private payrolls rose by 242,000 in January, above consensus estimates of 200,000. The firm also reported pay growth for workers remaining in their position decelerated by 7.2% for the month, or the slowest pace for gains within the last year.
"There is a tradeoff in the labor market right now," said Nela Richardson, chief economist at ADP, in the press release. "We're seeing robust hiring, which is good for the economy and workers, but pay growth is still quite elevated. The modest slowdown in pay increases, on its own, is unlikely to drive down inflation rapidly in the near-term."
Job openings in January fell to 10.82 million, the Bureau of Labor Statistics reported on Wednesday, down from the previous month's upwardly revised reading of 11.2 million openings. Beneath the headline, construction, leisure, hospitality, and finance sectors showed major declines in open positions.
Stocks were coming off a negative session on Tuesday after comments from Powell before the Senate Banking Committee that the central bank's terminal rate will likely be higher than previously anticipated in response to persistently high inflation. Tuesday's selloff saw losses in every sector, with financials and real estate posting the biggest declines.
Powell's testimony before Congress continued on Wednesday, with Powell emphasizing before the House Financial Services Committee that "no decision" has been made on the size of the next interest-rate increase ahead of the central bank's March policy meeting
"When say we will look at totality of data that will include these next reports. We will carefully analyze. Haven't made a decision on March meeting. Larger point is that we are not a preset path," said Powell during his second day of testimony.
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Looking ahead, all eyes will be on February jobs report due out Friday for more clues on the health of the U.S. economy and the Fed's next moves. Economists expect 215,000 new additions for the month, well below January's reading of 517,000 new private payroll positions.