Stocks Advance On Powell’s Comments; Oil Prices And Treasury Yields Climb

The stock market gained strength by early afternoon Wednesday after Fed Chairman Jerome Powell indicated that he supports a quarter-point interest-rate increase this month. Russia steepened its attack on Ukraine, and oil prices soared again to over $108 a barrel.

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The Nasdaq composite gained 1.7%, while the S&P 500 was up 2.1%. Small caps led as the Russell 2000 jumped 2.5%.

The Dow Jones Industrial Average rose 2%.

Volume fell on the NYSE and Nasdaq compared with the same time on Tuesday.

In testimony released before his 10 a.m. ET hearing in Congress, Powell said a rate increase at the March 15-16 Fed meeting is “appropriate.” But he added that the economic impacts of Russia’s invasion of Ukraine make the rate outlook murky.

“We will need to be nimble in responding to incoming data and the evolving outlook,” Powell said. Stock market futures gave up some gains after the prepared testimony was released before the market open.

Stock Market Gains Despite Rise In Oil, Treasury Yields

The yield on the 10-year Treasury note climbed 11 basis points to 1.83%. The benchmark yield had slid earlier this week as Russia pressed its invasion of Ukraine and nations placed more sanctions on Russia.

In economic news, the ADP employment report showed a rise of 475,000 jobs in February. That’s well above economists’ forecasts for a 320,000 increase, according to Econoday. In another positive surprise, the January estimate went from a loss of 301,000 jobs to a gain of 509,000.

The price of U.S. crude oil jumped 5% to $108.5 a barrel, the highest in 11 years. The OPEC+ group of major oil producers agreed to extend its existing goal of adding 400,000 barrels per day each month through April. OPEC+, which includes Russia, is under pressure to boost its target to help ease oil prices. But group members are struggling to produce enough oil even to meet current targets.

Fighting continued in Ukraine, where Russian forces shelled major cities but Ukrainians continued to offer stiff resistance.

Ford Gains On Company News

Ford (F) shares rose 7% after the automaker announced plans to create “separate but complementary” businesses around its fossil-fuel and electric vehicles, firmly shutting down talk of a potential EV or ICE spinoff as the auto giant executes a hoped-for turnaround.

Ford stock rebounded above the 200-day moving average but remains well below the 50-day line.

Dow component Salesforce.com (CRM) reversed lower, dropping  1% after January-quarter earnings and revenue beat analyst estimates. The enterprise software company’s sales guidance was above expectations but its profit forecast missed views.

Nordstrom (JWN) soared 38% after the department store chain beat January-quarter profit expectations late Tuesday. The results extended a string of bullish results for major retailers.

Ross Stores (ROST) rallied nearly 8% after it also beat expectations. Both Ross and Nordstrom gave strong outlooks. Discount chain Dollar Tree (DLTR) reported mixed results early Wednesday, as shares skidded 0.8%.

Innovator IBD 50 ETF (FFTY) rallied more than 2%.

Steel marker Nucor (NUE) jumped another 5%, exceeding its buy zone off a double-bottom base with a buy point of 126.77.

The stock is a half-position member of IBD Leaderboard.

Follow Michael Molinski on Twitter @IMmolinski

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