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U.S. stocks are falling on prospect of more interest rate hikes

Published 22/06/2023, 15:08
© Reuters.
- -- U.S. stocks were falling as Federal Reserve Chair Jerome Powell headed back to Capitol Hill for his second day of testimony.

At 9:53 ET (13:52 GMT), the Dow Jones Industrial Average was down 32 points or 0.1%, while the S&P 500 was down 0.1% and the NASDAQ Composite was flat.

On Wednesday, Powell told lawmakers in the House that the Fed wasn’t done raising interest rates to cool inflation. He is appearing as part of his semi-annual testimony to Congress about the economy.

Powell’s remarks suggested that more rate increases are "a pretty good guess" of what the Fed has planned assuming the economy continues on its current path. Futures traders see a 74% probability of rates rising a quarter of a percentage point at the Fed’s July meeting.

Guided by data

The Fed’s next move will be guided by data, Powell said. Recent inflation data has shown signs that the economy is cooling, while the labor market is holding steady. Initial jobless claims on Thursday were 264,000, the same as the prior week and slightly above expectations.

Shares of Boeing (NYSE:BA) parts supplier Spirit Aerosystems Holdings Inc (NYSE:SPR) fell 10.6% after it said it would suspend production at a plant in Kansas, where workers announced a strike starting this weekend. Boeing shares fell 2.4%.

Darden Restaurants Inc (NYSE:DRI) shares fell 2.3% after the parent of Olive Garden gave annual revenue guidance that was above estimates.

Oil was falling. Crude Oil WTI Futures were down 3% to $70.22 a barrel, while Brent Oil Futures were down 3% to $74.81 a barrel. Gold Futures were down 0.6% to $1,934.

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