Stock market today: Dow ends lower as Powell’s hawkish testimony keeps tech on ice

By Yasin Ebrahim

Investing.com — The Dow closed lower Wednesday as investors continued to hit pause on tech after Federal Reserve Chairman Jerome Powell talked up the need to resume rate hikes later this year.

The fell 0.3%, or 102 points, the fell 1.2%, and the fell 0.5%.

Powell Makes Hawkish Play

The Fed’s projections, released last week, calling for a further two rate hikes this year are a “pretty good guess” for the path of monetary policy should inflation continue to trend above the Fed’s 2% target, Powell said in testimony before the House Financial Services Committee on Wednesday.

Powell is set to deliver his second day of testimony before the Senate Banking Committee on Thursday.

The hawkish comments contrasted with that of other fed members including Chicago Fed President Austan Goolsbee and Atlantic Federal Reserve President Raphael Bostic, both of whom towed a more cautious line on the need to rapidly return to rate hikes.

Bostic warned of that pressing on with additional rate hikes could “needlessly drain too much momentum from the economy.” While Goolsbee said he was still undecided on whether to resume hikes next month.

Tech Rally on Pause, Tesla Gets Downgrade

As sentiment on stocks wavered, big tech felt the brunt of the pressure with Google (NASDAQ:) and Microsoft (NASDAQ:) leading to the downside.

In a complaint to the Federal Trade Commission, or FTC, Google accused Microsoft of anti-competitive practice in the cloud-computing market, alleging that the latter uses unfair licensing terms to lock customers into its Azure cloud business.

But while the Fed chief is unlikely to offer fresh clues on future monetary policy, many expect him as well as other Fed officials due to speak this week to point to still high inflation and reiterate the need to resume hiking rates.

Amazon.com (NASDAQ:) was embroiled in legal trouble after the FTC sued the e-commerce giant for allegedly tricking customers into signing up for its Prime services without their consent.

Tesla Inc (NASDAQ:) fell more than 5% after Barclays downgraded the stock to Hold from Buy, on worries that the EV maker could be set to make further price cuts, hurting its margin and earnings.

Energy Rebounds, FedEx Fails to Impress

Energy, meanwhile, shook off the recent malaise and was one of the best performing sectors on the day as oil prices rebounded.

Baker Hughes Co (NASDAQ:), APA Corporation (NASDAQ:), and were among the biggest gainers in the sector.

On the earnings front, FedEx Corporation (NYSE:) fell nearly 3% after delivering fourth-quarter revenue that fell short of Wall Street estimates and somewhat underwhelming guidance.

Back in Demand Amid Spot ETF Fever

Crypto-related stocks including Coinbase Global Inc (NASDAQ:), MicroStrategy Incorporated (NASDAQ:) and Riot Platforms (NASDAQ:) were in rally mode after bitcoin briefly surged to over $30,000, a more than one-year high on growing hopes on the prospect of a spot bitcoin exchange-traded fund, or ETF.

Wisdom Tree is among a host of firms that includes BlackRock (NYSE:) and Invesco that have made new filings for a spot bitcoin ETF, which is expected to renew demand from institutional investors.