Stocks trade higher on all indexes as Fed chair says recession fears are real

The stock market rebounded from its recent weakness in a holiday-shortened week of trading, with all major indexes trading higher.

Federal Reserve Chairman Jerome Powell completed his biannual two-day economic testimony to Congress on Wednesday and Thursday. Powell told Congress the Fed’s commitment to lower inflation was “unconditional” and acknowledged that a U.S. economic recession was “certainly a possibility.”

On Wednesday, U.S. President Joe Biden called on Congress to enact a three-month federal gasoline tax holiday to help lower gasoline prices nationwide. Gasoline prices in the United States hover around $5 per gallon, and drivers currently pay about 18 cents per gallon in federal gasoline taxes and 26 cents in state gasoline taxes.

On Tuesday, leading packaged food company Kellogg approved a plan to split its operations into three separate companies by splitting its North American cereal and plant-based foods businesses. Following the split, Kellogg investors will own shares of three independent public companies: Global Snacking Co., North American Cereal Co. and Plant Co.

On Friday, the House Financial Services Committee released a new report on the GameStop trading frenzy and other so-called meme actions that created unprecedented market volatility in early 2021. In the report, committee chair Maxine Waters condemned the “gamification” of the stock market and criticized popular trading app Robinhood for “troublesome trading practices, inadequate risk management and a culture that prioritized rapid growth over stability.” .

Rite tricks

Shares of drugstore chain Rite Aid gained more than 40% last week after the company reported a weaker-than-expected first-quarter loss and raised its full-year revenue forecast.

In the week ahead, investors will receive more quarterly earnings reports from Nike on Monday, Bed, Bath & Beyond on Wednesday, and Walgreens and Micron on Thursday.

Despite the S&P 500’s year-to-date weakness, 56.9% of all current analyst ratings on S&P 500 stocks are buy ratings and 37.7% are hold ratings, according to FactSet. .

Economic figures

Following Powell’s congressional testimony, Wall Street will receive key economic updates on Wednesday when European Central Bank President Christine Lagarde and Powell take part in a policy panel at the ECB’s Central Banking Forum.

Benzinga is a financial information and data company headquartered in Detroit.

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