U.S. equities post mixed weekly results amid Powell testimony, economic data

New York [US], March 28: U.S. equities posted mixed results in the volatile week as investors sifted through Federal Reserve Chairman Jerome Powell's remarks and a slew of economic data.
For the week ending Friday, the Dow and the S&P 500 increased 1.4 percent and 1.6 percent, respectively, while the Nasdaq fell 0.6 percent.
The S&P U.S. Listed China 50 index, which is designed to track the performance of the 50 largest Chinese companies listed on U.S. exchanges by total market cap, logged a weekly loss of 11.2 percent.
"Profit taking, position squaring, and sector rotation continued," Kevin Matras, executive vice president at Zacks Investment Research, said in a note.
The recent passage of the 1.9-trillion-U.S.-dollar American Rescue Plan and the trillions of dollars in stimulus that came before it have revived inflation fears.
Early inflationary signs are appearing. The yield on the benchmark 10-year U.S. treasury, a crude proxy for inflation expectations, retreated from its recent highs, but still remained elevated, hovering at around 1.67 percent on Friday.
Fed chair Powell testified before lawmakers this week, and one of the main topics of interest was inflation. He said that the central bank expects inflation to move up over this year, but the upward pressure on prices will be neither particularly large, nor persistent.
"We do expect that inflation will move up over the course of this year, first because of what we call base effects, the very low readings of last year in March and April," Powell said on Tuesday at a hearing before the House Financial Services Committee.
"Possibly after that, we'll see situation in which, as the economy reopens and vaccination continues, there could be a surge in spending and there could be some bottlenecks in the economy," Powell said. "We might see some upward pressure on prices."
The Fed chief noted that "our best view is that these effects on inflation will be neither particularly large, nor persistent."
He also added that the Fed, for now, remains strongly committed to the accommodative policy given that the economic recovery still has plenty of runway.
Meanwhile, Powell said that the U.S. economic recovery "has progressed more quickly than generally expected and looks to be strengthening," but cautioned that the comeback is far from complete.
Inflation fears partly eased on Friday after a latest report showed tame price pressures.
U.S. personal consumption expenditures (PCE) price index, a key measure of inflation, rose 0.2 percent in February, the Bureau of Economic Analysis reported on Friday. The core PCE price index, which strips out volatile food and energy prices, increased 0.1 percent month over month, roughly in line with analysts' estimates.
On other economic fronts, U.S. initial jobless claims, a rough way to measure layoffs, came in at 684,000 in the week ending March 20, a decrease of 97,000 from the previous week's revised level, the Department of Labor reported on Thursday. The reading was lower than an estimate of 735,000 from economists surveyed by Dow Jones.
The Consumer Sentiment Index of the University of Michigan was 84.9 in the March 2021 survey, up from 76.8 in February.
Source: Xinhua