S&P 500 slips as Powell insists rate hikes aren’t over; Tech gains stifle losses

Investing.com — The S&P 500 slipped Wednesday, as investors weighed a climb in big tech and remarks from Federal Reserve chairman Jerome Powell insisting that the rate hikes remain in play after a pause last month.

The fell 0.2%, the fell 0.4%, or 126 points, and the rose 0.1%.

Big Tech Climbs as Treasury Yields Dip Despite Hawkish Powell

Google (NASDAQ:) led the climb in the big tech, rising more than 1% after Treasury yields dipped from the highs of the day even as Powell said there was more “restriction” ahead and hinted at the possibility of back-to -back rate hikes.

Pointing to a strong labor market that continues to fuel consumer spending, which makes up about two-thirds of economic growth, Powell said that monetary policy isn’t restrictive enough and said he wouldn’t rule out the possibility of hiking rates at consecutive meetings.

The remarks pushed bets on the July rate hike to about 82%, up from 74% a day earlier, according to Investing.com’s .

The , which is sensitive to Fed policy changes, and the initially jumped to session highs following the remarks but soon dropped to the lows of the day.

Chips Dip as Nvidia Slides on New Potential U.S. AI Chip Export Ban

Semiconductor stocks, however, helped keep gains in check for tech, paced by a decline in NVIDIA Corporation (NASDAQ:) on worries about the impact of fresh U.S. curbs on AI chip exports to China.

The Biden Administration is reportedly mulling new restrictions on exports of artificial intelligence chips to China, the Wall Street Journal reported Wednesday.

Nvidia Chief Financial Officer Colette Kress downplayed the impact of potential further U.S. action on chip exports, saying the chipmaker expected no “immediate material impact.”

The dip in chips comes just ahead of Micron Technology Inc’s (NASDAQ:) quarterly results that are expected to be “relatively in-line” with Wall Street estimates, according to Wedbush, as cost cuts helped offset price hikes that likely weighed on demand during the quarter.

Energy Powers Ahead as Oil Rides Positive Weekly U.S. Crude Data

Energy stocks were the biggest gainers on the day, rising more than 1%, underpinned by a jump in prices after data showed the U.S. weekly fell more than expected, easing concerns about the impact of slowing global growth on demand.

Pioneer Natural Resources Co (NYSE:), Williams Companies Inc (NYSE:) and ConocoPhillips (NYSE:) were among top moving energy stocks on the day.

Tesla, Cruise Stocks Help Consumer Stocks Shine

Tesla (NASDAQ:) jumped more than 2% on optimism that the EV maker’s price cut in the country bolstered demand and pushed sales to record levels in the April to June quarter.

Tesla could sell 155,000 cars in China from April to June, up 13% from its record first quarter, according to estimates by China Merchants Bank International Securities analyst Shi Ji.

Cruise stocks were in rally mode as Carnival Corporation (NYSE:) continued its ascent a day after reporting a and an upbeat outlook as the cruise company continued its recovery from the pandemic.

Royal Caribbean Cruises Ltd (NYSE:) and Norwegian Cruise Line (NYSE:) were also sharply higher.

Elsewhere on the earnings front, General Mills (NYSE:) fell more than 5% after the maker of cereal, pet food and Pillsbury dough reported quarterly results that on the top line.