Wall Street steadies itself a day after its steep tumble

• Published date: 09 March 2023
• Publication title: The Korea Times

Stocks steadied on Wall Street Wednesday and closed with a mixed finish, a day after worries about interest rates sent them to one of their worst tumbles of the year.

The SP 500 rose 5.64 points, or 0.1 percent, to 3,992.01. The Dow Jones Industrial Average fell 58.06, or 0.2 percent, to 32,798.40, while the Nasdaq composite added 45.67, or 0.4 percent, to 11,576.00.

They were coming off a sharp drop the prior day after the head of the Federal Reserve warned it could speed up its hikes to interest rates if pressure on inflation stays high. Such hikes can ease inflation by slowing the economy, but they also hit prices for stocks and other investments and raise the risk of a recession in the future.

The Fed's chair, Jerome Powell, said again Wednesday that pressure on inflation appears to be running higher than earlier expected. But he also stressed much more strenuously than he did on Tuesday that the Fed hasn't made a decision yet on the size of its future hikes.

He said policy makers want to see what reports say in the run-up to their next meeting later this month. That gave some solace to the market, which shuddered a day earlier on fears the Fed was set to increase the size of its rate hikes.

"We're not on a preset path, and we will be guided by the incoming data," Powell said.

One report he highlighted in particular came out as he spoke Wednesday morning. It showed that the number of job openings advertised across the country last month remained higher than expected. Such data has become excruciatingly scrutinized on Wall Street because it can give a clue about where wages are heading for workers.

Strong wage gains are good for workers struggling to keep up with high inflation, but the Fed worries too-high growth could cause a vicious cycle that pushes inflation higher.

While the higher-than-expected number of job openings could spook markets, the report also showed some signs of easing pressure, including fewer Americans quitting their jobs.

A separate report Wednesday suggested hiring is still stronger across U.S. private employers than expected. It could offer a sneak peek of what another one of the reports highlighted by Powell could say. The U.S. government's more comprehensive report on hiring is scheduled for Friday.

Last month, a jaw-dropping number for that report revved up worries on Wall Street that inflation may not be cooling as quickly and smoothly as hoped.

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