The U.S Stock Market Holds Steady as Traders Look for Signals From Fed's Powell

The record-setting climb in U.S. equities paused on Tuesday as investors looked ahead to comments from Federal Reserve Chair Jerome Powell and awaited key inflation data later in the week.

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By mid-morning in New York, the S&P 500 hovered near unchanged levels, holding just shy of all-time highs. The Nasdaq 100, led by its tech heavyweights, was also flat. With few economic updates on the calendar this week, the market’s focus is firmly on Friday’s release of the Fed’s preferred inflation gauge the core personal consumption expenditures (PCE) index.

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“Investors continue to lean toward optimism, even as market skeptics struggle to gain ground against stretched valuations and labor market uncertainty,” noted Mark Hackett, chief of investment research at Nationwide. “The real story isn’t just the gains six out of the last seven weeks and the 28th record close this year but the remarkable calm. We haven’t seen a single daily swing over 1% in more than a month.”

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Powell is scheduled to deliver his first public remarks since last week’s rate cut, and traders are looking for any hints about the Fed’s policy direction heading into year-end. With earnings season on the horizon, equities could soon face a significant test after their strong summer rally.

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Adding to the debate, Fed Governor Michelle Bowman cautioned in a Tuesday address that policymakers risk falling behind if they don’t move swiftly enough. She emphasized the need for decisive action to bring rates lower as the labor market shows signs of weakening.

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Bowman even suggested that the Federal Open Market Committee (FOMC) might have to cut more aggressively in the months ahead. Additional Fed voices set to speak later in the day include Atlanta Fed President Raphael Bostic and Chicago Fed President Austan Goolsbee.

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The latest leg of the market’s run has been fueled by last week’s rate decision, which sent stocks to three consecutive record closes. Momentum slowed slightly on Monday, though the Nasdaq managed to notch another record finish, thanks in part to the announcement of a partnership between Nvidia Corp. and OpenAI that reignited enthusiasm in the tech sector.

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Outside of equities, gold has staged an extraordinary rally of its own, climbing to record highs. Reports from Bloomberg suggest the People’s Bank of China is exploring a role as custodian of foreign sovereign gold reserves a move that could expand China’s influence in the global bullion market.

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“We’re witnessing what can best be described as an ‘everything rally,’” Hackett observed. “Equities across the risk spectrum, bonds, gold, and even cryptocurrencies are all participating. The technical backdrop for markets is supportive, and incoming economic data has consistently surprised to the upside. On top of that, investors are still anticipating more support from both fiscal and monetary policy.”

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Individual stocks also grabbed attention Tuesday. Kenvue Inc. rebounded sharply from all-time lows after President Donald Trump’s recent comments discouraging Tylenol use during pregnancy drew strong pushback from medical experts, bringing the company into the spotlight.

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Boeing Co. also advanced after securing a new aircraft order from Uzbekistan Airways. Adding further optimism, the U.S. Ambassador to China suggested that a major aircraft purchase from Beijing potentially involving Boeing could soon be finalized, offering hope of renewed business from the world’s second-largest economy.

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