Speaking to the US Congress on Tuesday, Powell reiterated his view that the acceleration in inflation in the country is likely to be temporary, noting that the US Central Bank will continue to support the economy. The U.S. economy is showing steady improvement, according to his speech at the House of Representatives Coronavirus Subcommittee.
US employment growth will pick up in the coming months and inflationary pressures will ease as the US economy continues to recover from the effects of the COVID-19 pandemic, Powell said. The lending programs adopted by the Federal Reserve at the height of the crisis have freed up more than $ 2 trillion in funding that helped cut job losses in companies, nonprofits and local governments, he said.
Powell's comments, released Monday night, eased financial markets' fears about the Fed's imminent withdrawal of stimulus measures due to uncontrolled inflation in the United States, said Edward Moya, senior market analyst at Oanda.
Meanwhile, New York Federal Reserve Bank (FRB) chief John Williams said on Monday that he is not ready for the Fed to ditch the support it provides to the economy amid uncertainty over the pace of recovery from the pandemic.
John Williams said the economy is recovering at a fast pace and the medium-term outlook looks very good. However, the data and conditions have not improved enough for the FOMC to abandon a monetary policy that actively supports the economic recovery.
US existing home sales declined 0.9% in May to 5.8 million homes on an annualized basis, the National Association of Realtors said in a report on Tuesday. Thus, the decline was recorded for the fourth month in a row. As a result, the indicator dropped to an eleven-month low - from June 2020. Meanwhile, compared to May last year, resales jumped by 44.6%, which is primarily due to the low comparison base due to the outbreak of the COVID-19 pandemic at this time last year.
The Dow Jones Industrial Average rose by 68.61 points (0.2%) to close the market and amounted to 33945.58 points. A day earlier, the indicator showed the maximum rise in percentage terms since the beginning of March.
Standard & Poor's 500 rose by 21.65 points (0.51%) - to 4246.44 points.
The Nasdaq Composite added 111.79 points (0.79%) to 14253.27 points, which is a new record for the close.
The leaders of growth in trading on Tuesday were the shares of large technology companies. Netflix Inc. rose 2.4%, Amazon.com Inc. - by 1.5%, Apple Inc. rose 1.3%, Microsoft Corp. - by 1.1%, Facebook Inc. - on 2%.
Alphabet Inc., the parent company of Google, gained 0.4%, despite the fact that the European Commission launched a formal antitrust investigation against the American Google, in which it intends to assess the facts of abuse by the company of its leading position in the online advertising market.
Stock quotes of the American GameStop Corp. jumped by 10%. The owner of a chain of video games and consumer electronics stores raised about $ 1.126 billion by placing 5 million shares at market price. The proceeds from the sale are planned to be used for general corporate needs, as well as investments in growth initiatives and strengthening the company's balance sheet.
Market value of Blackstone Group Inc. increased by 0.1%. The American investment fund buys for $ 6 billion Home Partners of America, which specializes in the provision of single-family homes for rent.
Sanderson Farms Inc. added 10.3% in price. The American poultry producer is considering selling the business amid growing demand for chicken products, The Wall Street Journal reported, citing knowledgeable sources.
Capitalization of Exxon Mobil Corp. increased by 1.9%. According to Bloomberg, citing sources, the company will reduce the number of employees in its American offices by 5-10% per year over the next 3-5 years, using a performance assessment system to identify low-productivity employees.
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