U.S. stocks closed lower on Wednesday as Federal Reserve Chairman Jerome Powell’s congressional testimony reinforced the central bank’s objective to rein in inflation as he hinted at the likelihood of further interest rate hikes.
All three major U.S. stock indexes notched their third straight daily declines, with megacap tech- and tech-related shares weighing most.
“It seems the market is catching its breath after a huge start to the month,” said Ryan Detrick, chief market strategist at Carson Group in Omaha. “Historically June isn’t a very strong month for stocks, but this year could go down as one of the strongest Junes ever; so a small break in the run stocks have had is perfectly normal.”
Tesla Inc, along AI-related stocks such as Microsoft Corp and Nvidia Corp were the heaviest drags.
In his testimony before the U.S. House Financial Services Committee, Powell reiterated the fact that the central bank remains “strongly committed to bringing inflation back down to our 2% goal,” and said it would be “a pretty good guess” that future rate hikes are in the cards if the economy continues on its current path.