Stocks were flat on Wednesday as Wall Street awaits an afternoon speech on the economy from Federal Reserve Chair Jerome Powell.
S&P 500 was essentially little changed, with the benchmark looking to snap a 3-day losing streak. The Dow Jones Industrial Average gained 11 points, also trading near the flatline. Nasdaq 100 futures climbed 0.1%.
Traders were hit with two reports Wednesday morning that caused volatility in stock futures. On one hand, a labor report signaled the job market could be cooling, raising hopes the Federal Reserve would slow its aggressive rate-hiking campaign. On the other hand, an updated reading of third-quarter gross domestic product was released and it showed the economy was stronger last period than first realized.
Payroll processing firm ADP said Wednesday that private companies added just 127,000 positions for the month, well below the 190,000 consensus estimate from economists polled by Dow Jones.
But the Bureau of Economic Analysis also said Wednesday that third-quarter GDP increased at a 2.9% annual rate, according to its second estimate. That was revised higher from the 2.6% first estimate.
Powell will give a speech at the Brookings Institution this afternoon that may give further insight into the central bank’s thinking on future interest rate increases. The Fed is slated to meet later this month and is largely expected to deliver a smaller 0.5 percentage point rate hike after four consecutive 0.75 percentage point increases to tame high inflation. Any signal of a pivot on future rate hikes would likely send markets higher.
“This is a Fed-made recession, so eventually when he does pivot, the market should move higher pretty quickly,” said Steve Grasso, CEO of Grasso Global, on CNBC’s “Fast Money” Tuesday.
Wall Street is coming off a mixed session. The Nasdaq Composite shed 0.59% and the S&P 500 lost 0.16%, marking the third straight negative day for each. The Dow Jones Industrial Average notched a marginal gain, closing 3.07 points, or 0.01%, higher.
Stocks have been weighed down by China’s zero-Covid policy and have failed to fully recover from losses even as the country announced steps toward reopening, such as an uptick in vaccination rates for the elderly.
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