NEW YORK: Wall Street’s main indexes fell on Tuesday with investors wary of big bets ahead of remarks by Federal Reserve Chairman Jerome Powell before US Congress, while Tesla climbed after Rivian agreed to adopt its charging standard.
Powell is expected to deliver the semi-annual monetary policy testimony before the US House Financial Services Committee on Wednesday and before the Senate Banking Committee on Thursday.
“Investors are taking a pause and are waiting to see if he(Powell) continues with hawkish comments like he did at the prior Federal Reserve meeting,” said Chris Zaccarelli, chief investment officer for Independent Advisor Alliance.
Barring consumer discretionary, all the other S&P sub-sectors were in the red, with rate-sensitive sectors like real estate and financials down 1.3% and 0.8% respectively.
The S&P 500 and the Nasdaq closed at their highest weekly levels in over a year on Friday. However, the indexes have started on jittery footing this week as recent remarks on the need for tighter monetary policy by Fed officials continued to vex investors.
US single-family homebuilding surged in May to its highest in more than a year and permits issued for future construction also climbed, adding to angst about monetary tightening.
Traders now see a 73% chance of Fed hiking its key benchmark rates by 25 basis points in July, according to CMEGroup’s Fedwatch Tool.
Bucking the trend, Tesla Inc added 2.2% after Reuters reported that Rivian Automotive has agreed to adopt Tesla’s charging standard, adding momentum to the EV giant’s bid to set the industry standard.
At 12:19 p.m. ET, the Dow Jones Industrial Average was down 285.22 points, or 0.83%, at 34,013.90, the S&P 500 was down 27.98 points, or 0.63%, at 4,381.61, and the Nasdaq Composite was down 66.55 points, or 0.49%, at 13,623.02.
Energy and materials were among the most hit sectors tracking weak prices of commodities after China made a smaller-than-expected cut to its benchmark lending rates.
Among other movers, PayPal Holdings rose 2.6% after KKR & Co agreed to purchase up to 40 billion euros ($43.71 billion) worth of the payments firm’s “buy now, pay later” loans in Europe.