Stocks Flat as Powell Stresses No Rush for Rate Cuts

Stocks remained steady Tuesday as Federal Reserve Chairman Jerome Powell signaled that rate cuts aren’t imminent, while investors monitored inflation data and President Donald Trump’s latest tariff moves.

The S&P 500 added less than 0.1%, while the Nasdaq Composite dropped 0.3%. The Dow Jones Industrial Average hovered near the flatline.

Powell Signals Caution on Rate Cuts

During his testimony before the Senate Banking Committee, Powell stated that the Fed is in no hurry to adjust interest rates, citing a still-strong economy and a solid labor market.

“With our policy stance now significantly less restrictive than it had been and the economy remaining strong, we do not need to be in a hurry to adjust our policy stance,” Powell said.

He also noted that inflation remains above the Fed’s 2% target, reinforcing expectations that interest rate cuts could be delayed.

Tariff Concerns and Market Reactions

Powell’s remarks come amid heightened trade tensions as Trump signed new tariffs on all steel and aluminum imports on Monday.

• The European Union has threatened retaliatory tariffs if the U.S. expands its levies on European products.
• Investors are watching for more clarity on trade policy and its potential impact on inflation.

Key Market Movers

Despite overall market hesitation, Apple (AAPL) surged more than 2.5% after reports surfaced that the company is partnering with Alibaba to develop AI features for iPhone users in China.

Upcoming Inflation Data

Investors are now focused on upcoming inflation reports:

• Consumer Price Index (CPI) data is due Wednesday.
• Producer Price Index (PPI) will be released on Thursday.

Analysts Weigh In

“The market is treading water, listening to Powell and waiting to see what tomorrow’s CPI will bring,” said Sam Stovall, chief investment strategist at CFRA Research.

He added that investors are prioritizing earnings growth, with questions lingering about whether recent economic momentum is sustainable or was artificially boosted by businesses rushing orders ahead of expected tariffs.