NEW YORK: The benchmark S&P 500 and the blue-chip Dow turned positive on Wednesday as investors parsed US Federal Reserve Chair Kevin Warsh’s comments that inflation risks had eased. Warsh reiterated that the central bank was committed to bringing inflation down to its 2percent goal, but said price risks had come down in recent weeks.
The remarks brought some relief for investors who have been worried about rate hikes by the Fed, especially as the latest data shows that the US labor market remains stable, potentially giving the central bank more leeway to focus on price pressures.
Oil prices fell, with Brent crude down 2.1percent, alleviating inflation concerns. Traders still expect at least one hike from the US central bank this year, according to data compiled by LSEG. Warsh again said he would not give forward guidance on the interest-rate trajectory.
Separately, data from the Institute for Supply Management also showed US manufacturing activity had slowed in June but was still solid. “A broadening recovery across manufacturing but not employment supports a cautious stance (from the Fed) as price pressures evolve,” said Richard de Chazal, macro analyst at William Blair.
At 11:51 a.m. ET, the Dow Jones Industrial Average rose 283.37 points, or 0.54percent, to 52,602.57, the S&P 500 gained 12.21 points, or 0.16percent, to 7,511.57, and the Nasdaq Composite fell 81.22 points, or 0.31percent, to 26,132.67. In the second quarter of 2026, the S&P 500 and the Nasdaq Composite registered their best quarterly performance since 2020, while the Dow marked its best showing since 2022.
Unease surrounding US-Iran tensions has cast a shadow over Middle East peace talks, setting a cautious tone for the second half of the year. Tehran said it would not meet with top US envoys who flew to the region following an outbreak of hostilities.
Although a source with direct knowledge of the talks as well as an Iranian official said the US and Iran held technical talks in Doha, contrasting rhetoric suggested a breakthrough may prove to be elusive. Repeated false dawns have made the conflict difficult to track, leading some investors to focus instead on the economy’s underlying pillars. Investors will now look for clues on the health of the labor market on Thursday, when the nonfarm payrolls report for June is due to be released. Communication services led the benchmark with gains of 2.5percent, while the information technology index fell 1.3percent. Semiconductors fell 5.3percent, while software shares gained 3.8percent. Meta Platforms’ shares jumped 9.8percent after a report said the Facebook parent is building a cloud business to sell excess AI computing.
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