By Yasin Ebrahim
Investing.com – The S&P 500 eased from fresh record highs Wednesday as an Apple-led rally in tech was offset by weakness in energy and financials as bond yields slipped on dovish remarks from Federal Reserve Chairman Powell.
The S&P 500 rose 0.1%, though eased from its intraday record of 4,392.60 The Dow Jones Industrial Average gained 0.1%, or 7 points, the Nasdaq was down 0.1%.
Powell cooled expectations for a sooner rather than later taper of Fed bond purchases. There is still long a way to achieve "substantial further progress" on maximum unemployment, according to Powell's prepared remarks to the House Financial Services Committee.
The remarks arrived on signs that price pressures continue to build as producer inflation surprised to the upside.
Producer Price Indexrose 1.0% on the month, above economists expectations of 0.5%.
The inflation numbers “have been higher than expected and hoped for, but they're actually still consistent with what we've been talking about,” Powell said in his semi-annual testimony before the House Financial Services Committee. “[I]t's just the perfect storm of high demand and low supply, and it should pass.”
The somewhat dovish remarks kept U.S. bond yields languishing at their lows of the day, adding to concerns that banks will struggle to generate meaningful returns on their loan products in low-rate environment.
Wells Fargo (NYSE:WFC) and Citigroup (NYSE:C) reported quarterly results that beat on the top and bottom lines, while Bank of America (NYSE:BAC) missed out the bottom line, sending its share price down more than 3%.
Energy also kept the broader market gains in check as oil prices fell sharply as OPEC and its allies continue to struggle to reach a consensus on production levels.
UAE Energy Minister Suhail Al Mazrouei said Wednesday that an agreement had not been reached yet with Opec+ on an extension of an oil supply deal.
The news overshadowed positive data for energy prices showing that weekly U.S. crude supplies fell by 7.9 barrels last week.
Tech, however, supported the broader market, led by rally in Apple (NASDAQ:AAPL) to record highs on a Bloomberg reports that the tech giant is ramping its iPhone production by 20% amid expectations for a jump in demand.
The brighter outlook for iPhone demand sparked a bid in the suppliers tied to iPhone supply chain including Taiwan Semiconductor Manufacturing (NYSE:TSM), Jabil Circuit (NYSE:JBL) and Micron Technology (NASDAQ:MU).
Other large cap tech stocks including Amazon.com (NASDAQ:AMZN), Facebook (NASDAQ:FB), Google-parent Alphabet (NASDAQ:GOOGL), and Microsoft (NASDAQ:MSFT were also in the green.
In political news, Treasury Secretary Janet reportedly has no plans to revive regular dialogue with China, preferring to stick with the suspensions imposed by former U.S. President Donald Trump.