(Bloomberg) -- Stocks erased gains amid a selloff in giant technology companies and Federal Reserve Chairman Jerome Powell’s remarks over an uncertain economic rebound without further stimulus.
The S&P 500 initially jumped as the Fed signaled it would hold rates near zero through at least 2023. The rally quickly fizzled out after Powell said he’s not sure if the faster-than-expected recovery will continue. A tumble in tech behemoths such as Apple and Facebook also dragged down the gauge. The Treasury yield curve steepened as the U.S. central bank stopped short of offering new specifics on its approach to the monthly bond purchases that have buttressed markets. Some traders might have been expecting signals regarding plans to target longer maturities.
Read: Fed Signals Rates Will Stay Near Zero for at Least Three Years
Fed officials have stressed in recent weeks that the U.S. recovery is highly dependent on the nation’s ability to better control the coronavirus, and that further fiscal stimulus is likely needed to support jobs and incomes. “The recovery has progressed more quickly than generally expected,” Powell said, while cautioning that “the path ahead remains highly uncertain.”
“The fact that he’s highlighting the negative potential economic consequences of a lack of Congressional action on fiscal stimulus definitely served to unnerve investors,” said Alec Young, chief investment officer at Tactical Alpha LLC, referring to Powell.
The White House strongly signaled Wednesday that it is willing to increase its offer in talks with Democrats, and that Senate Republicans should go along in order to seal a stimulus deal in the next week to 10 days.
Here are some key events coming up:
Bank of Japan, Bank Indonesia and Bank of England policy decisions come Thursday.Friday sees quadruple witching -- the quarterly expiration of futures and options on indexes and stocks -- in U.S. markets
These are some of the main moves in markets:
The S&P 500 fell 0.5% as of 4 p.m. New York time.The Stoxx Europe 600 Index climbed 0.6%.The MSCI Asia Pacific Index increased 0.6%.
The Bloomberg Dollar Spot Index declined 0.1%.The euro was little changed at $1.1817.The Japanese yen was little changed at 104.96 per dollar.
The yield on 10-year Treasuries gained two basis points to 0.70%.Germany’s 10-year yield fell one basis point to -0.48%.Britain’s 10-year yield decreased one basis point to 0.211%.
The Bloomberg Commodity Index gained 0.7%.West Texas Intermediate crude increased 5% to $40.18 a barrel.Gold was little changed at $1,959.20 an ounce.
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