Wall Street pauses as Powell testimony looms

Wall Street's main indexes were little changed on Tuesday, as investors awaited Federal Reserve Chair Jerome Powell's remarks for clues on how the central bank is balancing inflation risk with its promise to ensure a full jobs market recovery.

In a bright spot, Amazon.com Inc gained 0.8%, among the top boosts to S&P 500 and the Nasdaq, as it entered the second day of its multibillion-dollar online sales event, Prime Day.

In his prepared remarks released late Monday afternoon, Powell said inflation has "increased notably in recent months" but regarded the recent jump as likely to fade. The Fed chief is due to speak before Congress at 2 p.m. ET (1800 GMT).

"The Fed, and particularly Powell, are going to continue to talk to the transitory nature of inflation," said Tony Minopoli, chief investment officer at Knights of Columbus Asset Advisors in Connecticut.

"We are at this inflection point where employment is getting better and we move from a stimulus-driven economic situation to a more traditional, consumer-led growth."

Eight of the 11 major S&P sectors fell in early trading, with energy, financials and industrials leading the declines after a sharp rally in the previous session.

Technology and consumer discretionary sectors, which house some of the tech-heavyweights including Apple Inc, Amazon.com and Facebook Inc, edged higher.

Still, energy, financials and other economically sensitive stocks have far outpaced the benchmark S&P 500 and the blue-chip Dow indexes year-to-date.

"We are approaching at least the peak of the V-shaped economic recovery and that's a more challenging time as we have to think of what that means for growth and corporate earnings and incremental policy support," said David Riley, chief investment strategist, BlueBay Asset Management.

At 09:57 am the Dow Jones Industrial Average fell 98.27 points, or 0.29%, to 33,778.70, the S&P 500 lost 2.96 points, or 0.07%, to 4,221.83 and the Nasdaq Composite gained 9.27 points, or 0.07%, to 14,150.75.

Crypto stocks including miners Riot Blockchain, Marathon Patent Group, Ebang International and MicroStrategy Inc fell between 6% and 9% as China's crackdown on bitcoin mining expanded to the province of Sichuan.

Sanderson Farms jumped 10% to a record high as J.P. Morgan raised its price target on the stock after a source told Reuters that the chicken producer was exploring a sale.

Moderna Inc rose 2.9% after the European Union decided to take up an option under a supply contract with the drugmaker that allows the bloc to order 150 million additional COVID-19 vaccines.

Splunk Inc gained 10.8% after the data analytics software maker said private equity firm Silver Lake invested $1 billion in company's convertible senior notes.

Declining issues outnumbered advancers by a 2.2-to-1 ratio on the NYSE and by a 2.4-to-1 ratio on the Nasdaq.

The S&P 500 posted 11 new 52-week highs and no new lows, while the Nasdaq recorded 47 new highs and 25 new lows.