Stocks slipped lower on Wednesday, losing gains from earlier in the session as Wall Street looked for direction amid comments from Federal Reserve Chair Jerome Powell. The Dow Jones Industrial Average slipped nearly 50 points, while the S&P 500 and Nasdaq Composite both traded slightly lower.
On Tuesday, each of the three major averages rose over 2%, with the S&P 500 posting its best day since early June. Last week, the S&P 500 fell nearly 6%, the most since March 2020.
The Federal Reserve took center stage again on Wednesday as Fed Chair Powell beginning two days of testimony before Congress. In prepared remarks ahead of questioning from lawmakers, Powell said the Fed is "strongly committed" to bringing down red-hot inflation. Powell's testimony comes a week after the central bank raised benchmark interest rates by a more-than-typical 75 basis points to combat multi-decades high inflation.
Elsewhere, President Joe Biden called on Congress to issues a 3-month tax holiday on federal gasoline and diesel taxes to help relieve rising gas prices on consumers. Biden also called on states to suspend their own gas taxes or provide similar relief.
Here's how the market settled on Wednesday:
S&P 500 Index
Dow Jones Industrial Average
Nasdaq Composite Index
Powell tells Congress the Fed is committed to controlling inflation:
Powell told Congress on Wednesday that the central bank is determined to bring down red-hot inflation and has the "resolve" to make that happen.
"At the Fed, we understand the hardship high inflation is causing. We are strongly committed to bringing inflation back down, and we are moving expeditiously to do so" Powell told the Senate Banking Committee in remarks. "We have both the tools we need and the resolve it will take to restore price stability on behalf of American families and businesses."
Powell added that the Fed will work until it sees "compelling evidence that inflation is moving down," and anticipates that "ongoing rate increases will be appropriate" with the pace of those rate hikes will depend on incoming economic data and the "evolving outlook for the economy." He also said that achieving a "soft landing" for the economy without a recession is more difficult than previously anticipated.
"It is our goal. It is going to be very challenging. It has been made significantly more challenging by the events of the last few months, thinking here of the war and commodities prices and further problems with supply chains," Powell said. "The question of whether we're able to accomplish that is going to depend to some extent on factors that we don't control."
