S&P 500 pares some gains after Powell warns inflation still too high
Investing.com — The S&P 500 pared some gains Friday as rising Treasury yields kept a lid on gains in tech after Federal Reserve chairman Jerome Powell signaled there was still more work to do to curb inflation.
The S&P 500 rose 0.4% higher, the Dow Jones Industrial Average gained 0.6%, 208 points, Nasdaq was up 0.4%.
In his Jackson Hole speech Friday, Powell said “restrictive” monetary policy is called for to achieve the Fed’s 2% inflation target.
Bringing inflation back to target is expected to “require a period of below trend economic growth as well as some softening and labor market conditions,” the Fed chief added.
Treasury yields surged in anticipation of a higher-for-longer rate regime, with the 2-year Treasury yield briefly rising close to the cycle highs of 5.12%.
Tech came under pressure from rising Treasury yields, which makes growth sectors like tech with higher valuations less attractive, with Google (NASDAQ:GOOGL) and Meta (NASDAQ:META) driving downside momentum.
Marvell Technology Inc (NASDAQ:MRVL) fell 7%, weighing on chip stocks despite reporting quarterly results that topped Wall Street estimates as investors weighed the chipmaker’s foray into AI-centric products against a downbeat outlook on memory demand.
“We see Marvell's cautious commentary on storage (e.g., a slower than expected recovery) as paralleling our conversations regarding continued soft CSP spend on standard servers and the resulting headwinds for NAND/SSD and HDD demand,” Wedbush said in a note.
NVIDIA Corporation (NASDAQ:NVDA), meanwhile, was also a drag on broader tech as investors appear to take some profit on the chipmaker, which has racked up a gain of more than 220% this year, following its recent quarterly results that surprised to
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