Stock market surrenders some gains

Questions about hikes by Fed, inflation remain for investors

NEW YORK — Stocks fell Wednesday on Wall Street, giving back some of their recent gains as uncertainty about interest rates and inflation continues to reign.

Investors also reviewed another set of mixed earnings reports from big companies. The latest round of financial results and forecasts could help give Wall Street a clearer picture of how inflation is shaping consumer spending and business plans.

The S&P 500 fell 46.14 points, or 1.1 percent, to 4,117.86 and is on track for weekly losses after a few days of choppy trading.

The Dow Jones Industrial Average fell 207.68 points, or 0.6 percent, at 33,949.01. The Nasdaq composite fell 203.27 points, or 1.7 percent. to 11,910.52.

The pullback follows Tuesday’s gain of 1.3 percent for the S&P 500, which came after the first public comments by Federal Reserve Chair Jerome Powell since the central bank raised interest rates last week. Markets found some solace in Powell’s signaling that Friday’s strong jobs report wouldn’t by itself push the Fed to get more aggressive on interest rates.

But analysts said that Powell’s comments were just as tough on inflation as before. He said that while he has seen improvements in inflation, the road ahead is still long to get it under control. The Fed can help drive down inflation by raising interest rates and keeping them high, but that also raises the risk of a recession and hurts investment prices in the meantime.

The Fed has been saying that it plans to hike interest rates a couple more times and then hold them at a high level at least through the end of the year.

“We’ve got this kind of push and pull going on that’s generating a lot of volatility,” said Brad Mcmillan, chief investment officer for Commonwealth Financial Network.

John Williams, the president of the Federal Reserve Bank of New York, said he still thinks the Fed’s main interest rate hitting a target of 5 percent to 5.5 percent by the end of the year is “a very reasonable view,” even after Friday’s strong jobs report.

The yield on the 10-year Treasury, which helps set rates for mortgages and other important loans, slipped to 3.62 percent from 3.68 percent late Tuesday.

The two-year yield, which moves more on expectations for the Fed, dipped to 4.43 percent from 4.47 percent.