US stocks muted as Powell moves to temper inflation fears

The blue-chip S&P 500 edged up 0.08 per cent, while the Dow Jones added 0.01 per cent

US stocks were broadly flat on Wednesday morning after Fed Chair Jay Powell suggested that inflation could run hot in the coming months.

The blue-chip S&P 500 edged up 0.08 per cent, while the Dow Jones added 0.01 per cent.

The tech-heavy Nasdaq gained 0.02 per cent during the morning session.

Read more: Powell: US inflation likely to run hot in coming months

Chairman of the Federal Reserve Jay Powell moved to dampen investor concerns that recent inflation data could prompt the central bank to tighten monetary policy in prepared remarks published today.

Inflation “will likely remain elevated in coming months”, but will “moderate” he said.

Data released yesterday showed US consumer prices rose at their fastest annual clip since August 2008, while figures published today showed producer prices increased at their highest level in over a decade.

Yields on 10-year Treasuries slipped on the comments, but recovered slightly to 1.37 per cent.

Stronger pound drags FTSE 100 down

London’s FTSE 100 ended Wednesday in the red, driven by a stronger pound weighing on multinationals, which represent a large proportion of the index.

The capital’s premier index lost 0.47 per cent today.

The pound weakened against the dollar after inflation data published in the morning came in higher than estimates, reaching 2.5 per cent annually in June.

Read more: UK inflation hits 2.5 per cent in June

The domestically-focused FTSE 250 also notched losses, down 0.77 per cent, while AIM shares dipped 0.55 per cent.

The pound strengthened 0.32 per cent against the greenback to buy $1.38.

Winners and losers

The day’s best performer was house builder Barratt Developments, rising 2.04 per cent after it upped its profit forecasts in a morning announcement.

Commodity trader Glencore was the day’s second best performer, adding 1.75 per cent. Bank NatWest came third, up 1.64 per cent.

Fund manager Hargreaves Lansdown was the day’s worst performer, sliding 3.52 per cent.

Online supermarket Ocado came second, losing 2.99 per cent, and safety equipment provider Halma was the third worst performer, down 2.04 per cent.

Around the world

Asian shares notched losses on Wednesday, weighed down by concerns over a resurgence in Covid cases driven by the Delta variant.

Japan’s Nikkei dropped 0.38 per cent and Hong Kong’s Hang Seng slipped 0.63 per cent.

European were down too on Wednesday, with the Stoxx 600 edging down 0.08 per cent.

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