U.S. Stocks Mostly Lower As Powell Warns Of Higher Than Expected Rates

(RTTNews) - After pulling back off early highs and ending the previous session narrowly mixed, stocks have moved mostly lower during trading on Tuesday. The major averages have all moved to the downside after ending Monday's trading on opposite sides of the unchanged line.

Currently, the major averages are all firmly in negative territory. The Dow is down 267.92 points or 0.8 percent at 33,163.52, the Nasdaq is down 85.70 points or 0.7 percent at 11,590.04 and the S&P 500 is down 37.16 points or 0.9 percent at 4,011.26.

The weakness on Wall Street reflects a negative reaction to Federal Reserve Chair Jerome Powell's highly anticipated semiannual monetary policy testimony before the Senate Banking Committee.

Citing stubbornly elevated inflation and stronger than expected economic data, Powell told lawmakers the "ultimate level of interest rates is likely to be higher than previously anticipated."

Powell also said the Fed would be prepared to reaccelerate the pace of rate hikes if the totality of incoming data were to indicate that faster tightening is warranted.

Additionally, the Fed chief reiterated the central bank will likely need to maintain a restrictive stance of monetary policy for "some time" in order to restore price stability.

"The historical record cautions strongly against prematurely loosening policy," Powell said. "We will stay the course until the job is done."

The Fed's next monetary policy meeting is scheduled for March 21-22, with CME Group's FedWatch Tool currently indicating a 51.6 percent chance of another 25 basis point rate increase and a 48.4 percent chance of 50 basis point rate hike.

Gold stocks have moved sharply lower in morning trading, dragging the NYSE Arca Gold Bugs Index down by 3.2 percent.

The sell-off by gold stocks comes amid a steep drop by the price of the precious metal, with gold for April delivery tumbling $28.70 to $1,825.90 an ounce.

Substantial weakness has also emerged among banking stocks, as reflected by the 2.4 percent nosedive by the KBW Bank Index.

Energy stocks are also seeing considerable weakness amid a decrease by the price of crude oil, moving notably lower along tobacco, chemical and telecom stocks.

In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance during trading on Tuesday. Japan's Nikkei 225 Index rose by 0.3 percent, while China's Shanghai Composite Index slumped by 1.1 percent.

The major European markets have also turned mixed on the day. While the U.K.'s FTSE 100 Index is up by 0.1 percent, the German DAX Index and the French CAC 40 Index are both down by 0.3 percent.

In the bond market, treasuries have shown a lack of direction after see initial strength. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is down by less than a basis point at 3.975 percent.