Tuesday's Market Open: Warnings From Fed Chairman Jerome Powell Weigh On Market

Updated 12:15 p.m.:

U.S markets were slightly higher shortly after noon Tuesday. The Dow Jones Industrial Average added 0.18% to 25,640 while the Nasdaq was up 1.28% to 10,000 and the S&P 500 climbed 0.85% to 3,079.

In Europe, the London FTSE closed off 0.9% and the French CAC dropped 0.19% while the German DAX gained 0.64%. Stoxx Europe 600 was up 0.13%.

The dollar traded lower against the euro, yen and British pound with the index off 0.17%.

Both crude and Brent oil futures were low; gold and silver were b oth higher.

Original story:

U.S. markets opened mixed Tuesday amid warnings from Federal Reserve Chairman Jerome Powell that the economic future is uncertain despite recent data indicating improvement as states began reopening their economies last month following the coronavirus shutdowns.

The Dow Jones Industrial Average was flat shortly after the open at 25,592, the Nasdaq was up 0.12% to 9,887 and the S&P 500 gained 0.05% to 3,054.

Powell was scheduled to testify before the House Financial Services Committee. In prepared remarks, Powell said with 20 million Americans out of work, the future will depend on “the policy actions taken at all levels of government to provide relief and to support the recovery for as long as needed.”

Powell has urged Congress against ending coronavirus relief measures, many of which are set to expire.

“The CARES Act and other legislation provide direct help to people, businesses, and communities,” he said in reference to the $2 trillion relief measure adopted at the end of March. “This direct support can make a critical difference not just in helping families and businesses in a time of need, but also in limiting long-lasting damage to our economy.”

Powell also cautioned: “The path forward for the economy is extraordinarily uncertain and will depend in large part on our success in containing the virus. A full recovery is unlikely until people are confident that it is safe to reengage in a broad range of activities.”

Dr. Anthony Fauci, the nation’s top infectious disease expert, was scheduled to testify Tuesday before the Senate Health and Education Committee.

The remarks come as states that attempted to reopen rapidly are rethinking their actions, with Arizona and Texas closing bars, New Jersey halting plans to allow indoor dining and Florida imposing a mask order.

Also weighing on the market is China’s imposition of a security law on Hong Kong, effectively ending the city’s autonomy. The administration escalated its decision to end the former British colony’s special status as a result of the measure, limiting technology exports.

Foreign markets were mixed to close out the first half of the year.

In Asia, Hong Kong’s Hang Seng index closed up 0.52% while Japan’s Nikkei 225 was up 1.33% and China’s Shanghai Composite gained 0.78%. Australia’s S&P/ASX added 1.43%.

In early afternoon trading in Europe, London’s FTSE 100 was off 1.2%, the German DAX fell 0.07% and the French CAC 40 dipped 0.69%. The Stoxx Europe 600 was off 0.39%.

On currency markets, the euro was off 0.18% against the dollar, while the yen was up 0.4% and the British pound was up 0.12%. The U.S. dollar index was up 0.05%.

Crude oil was off 1.59% to $39.07 a barrel while Brent crude was down 1.53% to $41.21.

Gold futures lost 0.06% to $1,780 an ounce. Silver gained 0.23% to $18.105.