Nasdaq closes at a record as Fed's Powell reiterates that rising inflation is transitory
- US stocks climbed Tuesday as investors digested messaging from the Federal Reserve.
- Fed chairman Jerome Powell reiterated that inflation will be transitory in a congressional testimony.
- Bitcoin slid below $30,000 for the first time since January.
US stocks ticked higher after the Federal Reserve chair reiterated his outlook that inflationary pressures will be transitory. In a testimony to the House Select Subcommittee Tuesday, Jerome Powell suggested that he had no fears that prices will come down, but it's hard to say when bottlenecks are going to disappear. He also said that strong job creation should arrive in the fall.
Almost every sector in the S&P 500 ended in the green, while Microsoft hit a $2 trillion market cap for the first time ever. It's the second-largest public company by market capitalization behind Apple ($2.3 trillion). Gains in tech stocks propelled the Nasdaq to a record closing high.
Here's where US indexes stood at the 4 p.m. ET close on Tuesday:
- S&P 500: 4,246.47, up 0.51%
- Dow Jones industrial average: 33,945.71, up 0.2% (68.74 points)
- Nasdaq composite: 14,253.27, 0.79%
The cryptocurrency space continued to tumble. Bitcoin hit its lowest point since January before picking back up $32,000. t's now facing a make-or-break moment at the key technical support level of $30,000. Ether dropped 14% on Tuesday to a 24-hour low of $1,732.85, Ripple's XRP dropped nearly 25%, and dogecoin has fallen 47% in the last seven days.
Meanwhile, investors' view towards cryptocurrencies remains extremely polarized, according to a survey conducted by JPMorgan. The survey found that 51% of the investors believe cryptocurrencies are here to stay, while 49% of survey respondents believe cryptocurrencies are either "rat poison" (33%) or a temporary fad (16%).
A return to 1970s-style inflation is unlikely given deeper deflationary impulses, saidBridgewater co-CIO Bob Prince in a recent interview. The head of the world's biggest hedge fund expects future months will bring some "moderate" inflation, rather than the double-digit price hikes that pummeled America in the 1970s.
West Texas Intermediate crude fell 0.79% to $73.08 per barrel. Brent crude, oil's international benchmark, jumped above $75 a barrel for the first time in two years this morning. It now sits at $74.90.
Gold slipped 0.17% to $1,779.80 per ounce.
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