The Dow Jones Industrial Average pared back early losses and traded flat at noon Wednesday. Fed Chair Jerome Powell affirmed that interest rates will continue to increase in his testimony in Congress. Powell observed that "inflation pressures continue to run high, and the process of getting inflation back down to 2% has a long way to go."
The Fed chair said in remarks prepared for his address before a House Financial Services Committee meeting that "nearly all FOMC participants expect that it will be appropriate to raise interest rates somewhat further by the end of the year."
The rate pause last week was a "prudent" step, he said, to allow the committee to assess the effects of its tightening. The Fed chair will address the Senate Banking Committee on Thursday.
Last week, the Fed paused tightening and let interest rates stay unchanged while indicating that two more rate hikes may be needed to curb inflation. A hike following the July meeting would take the rate to 5.25%.
The S&P 500 fell 0.4% while the Nasdaq lagged, falling 1.3% at noon ET.
The small-cap Russell 2000 slipped 0.5% and Innovator IBD 50 ETF fell 1.3%.
Volume on the NYSE fell but rose on the Nasdaq compared with the same time on Tuesday.
Crude oil prices rose over 1% to trade at $72.19 a barrel.
The yield on the benchmark 10-year Treasury note rose 4 basis points to 3.77%.
Dow Jones Stocks In Focus
Apple continued to tread along a rising 10-day moving average, according to IBD MarketSmith. Shares pulled back slightly in light volume at the hour. Walgreens is trying to reclaim its 50-day line ahead of earnings next week.
Shares of Adobe rose at the opening bell but reversed lower at noon. Earlier, BMO Capital Markets analyst Keith Bachman raised his price target to 570 with an upgraded outperform rating due to a boost from AI technologies.
Exact Sciences fell despite positive results from its study to evaluate its next generation Cologuard treatment for colon cancer. The original Cologuard was approved in 2014.
Homebuilders And Medical Stocks On Watch
Outside Dow Jones, Meritage Homes is in a buy zone after clearing a buy point of 130.68 on Tuesday. It was also Tuesday's Stock of the Day. KB Home is on deck to report earnings Wednesday while Olive Garden restaurants parent Darden and Accenture report on Thursday. KBH and DRI rose while ACN is testing its 10-day line.
On the IBD 50, growth stock TransMedics is above its 50-day line in a cup base with a buy point of 90.15. Lantheus Holdings retook its 50-day line on Tuesday. The medical products stock pared some gains Wednesday. Generac, on the IBD Leaderboard, is in a cup base with a 141.54 entry.
Futures: Nasdaq Leads Pullback; Chip Giants Diverge
Outside Dow Jones: Tesla, Amazon
Elsewhere, Tesla fell after Barclays analyst Dan Levy downgraded the stock to hold from buy but raised his price target to 260 from 220.
Spotify fell as well though Wolfe Research analysts gave it a price target of 190 with an outperform rating.
Amazon slipped slightly after Jefferies raised its price target to 150 from 135. Shares are tracking above the 10-day line.
Dow Jones stock Nike got a price target cut to 135 from 140 from Telsey Advisory Group. Analysts maintained an outperform rating for the stock. Shares rose slightly at midday Wednesday.
Oppenheimer analysts raised their price target for Uber to 65 from 55. UBER stock pared early gains, however. It is on the IBD Leaderboard and IBD 50.
Shares of FedEx fell below the 50-day line after the shipping company gave a disappointing profit outlook for 2024. Weak demand is expected to offset a $4 billion cost-cutting effort. United Parcel Service fell in sympathy.
PayPal fell Wednesday midday after Tuesday's significant gain as investment firm KKR agreed to buy $44 billion in loans on PayPal's balance sheet. The stock cleared its 50-day line Tuesday and is testing it Wednesday.
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