U.S. equity markets were mixed on Tuesday, as Jerome Powell's speech to the Senate failed to convince investors who were expecting more from the Fed boss.

In late morning trading, the Dow Jones was down 0.2% at 39.261.7 points, while the Nasdaq advanced by 0.3% to 18,453.3 points, after hitting a new record high of 18,511.8 points.

Share prices rose as the Chairman of the Federal Reserve gave a speech to members of parliament, which traders seemed to find hard to decipher.

While he stressed that the labor market was tending to slow down, Jerome Powell also pointed out that the unemployment rate, at 4.1%, was at a particularly low level.

As for inflation, he noted that it was moving closer to the Fed's 2% target, but also felt that further encouraging data would be needed to reinforce the institution's confidence in the favorable evolution of prices.

These comments seemed to intrigue investors, who had been expecting the Fed boss to provide more precise indications as to the evolution of monetary policy in the light of the worse-than-expected indicators of late.

The markets are therefore disappointed that his comments did not alter their expectations, with the probability of a rate cut in September still estimated at around 72% according to FedWatch.

Following the Fed Chairman's speech, which was deemed disappointing, the yield on 10-year Treasuries rose above 4.31%, while the dollar rallied against the euro, falling back to around 1.0810.

On the stock front, the trend continued to be supported by the rise of the "Magnificent Seven", as investors sought to position themselves on these market powerhouses ahead of their forthcoming results.

Nvidia shares climbed a further 3%, Tesla gained 2% and Alphabet advanced 0.7%.

Investors have high expectations of the profits and forecasts to be published by the few technology giants that continue to dominate market gains", sums up César Perez Ruiz, Head of Investments at Pictet Wealth Management.

Copyright (c) 2024 CercleFinance.com. All rights reserved.