LIVE MARKETS-US stocks steady a little while Powell talks

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U.S. STOCKS STEADY A LITTLE WHILE POWELL TALKS

Stocks started Wednesday with a sell-off after data showing high consumer prices, but Wall Street's mood seemed to improve by early afternoon with the Nasdaq .IXIC managing a small gain, while the S&P 500 .SPX and the Dow .DJI pared losses.

Investors said that Federal Reserve Chair Jerome Powell, in his appearance before the House Financial Services Committee, may have helped to reassure the market even though it was his second public appearance in as many days, and he repeated Tuesday's prepared statement on Wednesday.

"He calms the market. He's the voice of reason in a government with an executive branch that's acting differently to previous administrations," said Tim Ghriskey, senior portfolio strategist at Ingalls & Snyder in New York.

"There's nothing new that he's saying, but that gives the market confidence. Powell is the big boy in the room. He's acting like it in the midst of all this White House upheaval."

For example, Ghriskey pointed to Powell's comments on bank capital levels and also cited his assurance that Elon Musk's associates, charged with promoting government efficiency, have not approached the Fed for access to its systems.

And he also mentioned Powell's continued commitment to not resign if requested to by President Trump.

The easing of losses was already well underway by the time Powell cautioned against reading too much into the largest acceleration in the Consumer Price Index in more than a year.

While acknowledging that CPI was substantially above forecasts, Powell reminded us of the Fed's dedication to PCE (personal consumption expenditures), which will also be informed by the Producer Price Index reading which is due Thursday.

And, Robert Pavlik, senior portfolio manager at Dakota Wealth in Fairfield, Connecticut, said that investors may already have been questioning the reaction to CPI themselves, citing already-known concerns about housing and food prices.

"A little bit of reality sinks in and people start to think, really am I that surprised CPI is high?" said Pavlik.

As for Powell, it likely helped that he didn't say anything to spur more negativity, according to Pavlik who likened the Fed chair's comments to "a little bit of comforting from the parent that things will be ok."

(Sinéad Carew)

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