U.S. stocks were lower on Wednesday as investors took a breather from last week’s market rally, and weighed Federal Reserve Chair Jerome Powell’s latest comments on inflation.
The Dow Jones Industrial Average slid 113 points, or 0.3%. The S&P 500 and Nasdaq Composite dipped 0.4% each.
FedEx shares fell 2.4% after the shipping giant posted weaker-than-expected revenue for its most recent quarter. Winnebago shares slid more than 5% after the motorhome maker missed third-quarter revenue estimates.
Investors are coming off a second straight trading day of losses. On Tuesday, the Dow fell 245.25 points, or 0.72%. The S&P 500 slid 0.47%, and the Nasdaq Composite lost 0.16%.
Quincy Krosby, chief global strategist for LPL Financial, said stocks are overbought and in need of a catalyst after its recent gains. Last week, the S&P 500 hit its highest level since April 2022 and posted its fifth consecutive positive week.
“With the S&P 500 and Nasdaq marching higher and breaking through key resistance levels, and underpinned by stronger volume and broader participation, markets reached short-term overbought levels on Friday,” she said by email.
Powell said Wednesday that more rate hikes are likely ahead as the central bank tries to combat inflation. Those comments come after the conclusion of last week’s meeting when the central bank held off from raising rates after 10 straight consecutive hikes. However, officials indicated there could be two more quarter-percentage point moves on the horizon this year.
“Nearly all FOMC participants expect that it will be appropriate to raise interest rates somewhat further by the end of the year,” Powell said Wednesday in prepared remarks for the House Financial Services Committee.
As far as quarterly results, KB Home will report after the close.